[Federal Register Volume 77, Number 166 (Monday, August 27, 2012)]
[Rules and Regulations]
[Pages 51686-51693]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-20974]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 999

[Doc. No. AMS-FV-09-0064; FV09-999-1 FR]


Specialty Crops; Import Regulations; New Pistachio Import 
Requirements

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule establishes a minimum quality regulation for lots of 
pistachios imported into the United States. The regulation specifies 
maximum aflatoxin tolerance levels as well as mandatory aflatoxin 
testing and certification requirements. These import quality 
requirements are the same as or comparable to those in effect for the 
domestically produced commodity. Under this regulation, aflatoxin 
levels in imported pistachios may not exceed 15 parts per billion 
(ppb), as certified by aflatoxin inspection certificates issued by an 
accredited laboratory. This action is intended to assure consumers that 
all pistachios offered for sale in the United States meet the same 
aflatoxin standards, thus promoting high quality product in the market 
place and fostering consumer satisfaction.

DATES: Effective Date: September 26, 2012.

FOR FURTHER INFORMATION CONTACT: Laurel May or Kathleen Finn, Marketing 
Order and Agreement Division, Fruit and Vegetable Programs, AMS, USDA, 
1400 Independence Avenue SW., STOP 0237, Washington, DC 20250-0237; 
Telephone: (202) 720-2491, Fax: (202) 720-8938, or Email: 
[email protected] or [email protected].
    Small businesses may request information on complying with this 
regulation by contacting Laurel May at the above mentioned address.

SUPPLEMENTARY INFORMATION: This final rule is issued under section 8e 
of the Agricultural Marketing Agreement Act of 1937, as amended (7 
U.S.C. 601-674), hereinafter referred to as the ``Act,'' which provides 
that whenever the grade, size, quality, or maturity of certain 
specified commodities, including pistachios, are regulated under a 
Federal marketing order, imports of these commodities into the United 
States are prohibited unless they meet the same or comparable grade, 
size, quality, and maturity requirements as those in effect for the 
domestically produced commodities. To ensure that these requirements 
are met, the Act also authorizes the Department of Agriculture (USDA) 
to perform inspections and related functions such as commodity 
sampling, and to issue inspection certificates for such imported 
commodities.
    USDA is issuing this rule in conformance with Executive Order 
12866.
    There are no administrative procedures that must be exhausted prior 
to any judicial challenge to the provisions of import regulations 
issued under section 8e of the Act.
    This final rule adds a new Sec.  999.600 under 7 CFR part 999--
Specialty Crops; Import Regulations, and establishes quality 
requirements for maximum aflatoxin tolerance levels and mandatory 
testing and certification requirements for pistachios offered for 
importation into the United States. These quality requirements for 
imported pistachios are the same as or comparable to those established 
for pistachios grown in California, Arizona, and New Mexico under 
Marketing Agreement and Order No. 983 (7 CFR part 983) (order), both as 
amended.
    This final rule also revises Sec.  999.500, which specifies 
safeguard procedures for the importation of walnuts and dates that are 
exempt from Sec.  8e regulations. This section is revised to include 
safeguard procedures for the importation of pistachios intended for 
exempted purposes.
    The order prohibits the shipping of pistachios for domestic human 
consumption that do not meet the quality requirements for aflatoxin 
levels in the nuts. Such quality requirements specify that aflatoxin 
levels may not exceed the maximum tolerance of 15 ppb. Pistachios that 
fail to meet these requirements must be reworked and retested, or 
disposed of as specified in the order. This regulation was designed to 
ensure that only high quality pistachios containing low levels of 
aflatoxin are shipped, thus promoting high quality product in the 
market place and fostering consumer satisfaction.
    The order, which was established for California pistachios in 2004, 
was recently amended to include the states of Arizona and New Mexico. 
Pistachios grown in California, Arizona, and New Mexico represent over 
99 percent of the U.S. domestic production, and 98 percent of the 
domestic consumption. Thus, almost all domestically produced pistachios 
are regulated under Marketing Order No. 983. There is no other Federal 
marketing order in effect for pistachios produced in the United States.
    According to USDA's Foreign Agricultural Service (FAS), Iran is 
typically the world's largest pistachio producer, followed by the U.S. 
and Turkey, although Syria's production has increased in recent years. 
During the three most recent crop years (September through August) for 
which complete data is available, 2007-08 through 2009-10, the 
production averages in millions of pounds (inshell basis) for Iran, the 
U.S., Turkey, and Syria were approximately 386, 350, 120, and 141, 
respectively.
    Historically, the bulk of U.S. pistachio imports have come from 
Turkey and Iran, although Iranian imports have been prohibited since 
July 2010. The remainder comes from other countries, including Italy, 
China, Switzerland, France, Australia, Hong Kong, and Israel. Imported 
pistachios may be inshell or shelled. According to FAS, the U.S. 
imported an average of approximately 1.7 million pounds of pistachios 
(inshell basis) annually

[[Page 51687]]

during the three crop years from 2007-08 through 2009-10. Average U.S. 
consumption of pistachios during that same period was approximately 100 
million pounds (inshell basis) annually. Imports, therefore, represent 
approximately two percent of U.S. pistachio consumption.

Requirements

Definitions

    The new regulation includes definitions of terms used in the import 
regulation. Such terms are the same as or comparable to those defined 
in the marketing order for domestic pistachios as established at 69 FR 
17844 (April 5, 2004) and amended at 74 FR 56532 (November 2, 2009).
    Under the new regulation, ``pistachio'' means the nut of the 
pistachio tree, Pistachia vera, whether inshell or shelled. 
``Importer'' is defined as a person who imports pistachios into the 
United States. ``Aflatoxin'' is defined as a mycotoxin that can be 
found in nuts, dried fruits, and grains. ``Aflatoxin inspection 
certificate'' means a certificate issued by a USDA or USDA-accredited 
laboratory. ``USDA laboratory'' and ``USDA-accredited laboratory'' are 
defined as laboratories authorized to test imported pistachios for 
aflatoxin content. ``Inspector'' means any inspector authorized by USDA 
to draw and prepare pistachio samples for testing. ``Lot'' means any 
quantity of pistachios submitted for testing. Other terms useful in the 
administration of the import regulation are also defined.

Maximum Aflatoxin Tolerance

    The presence or absence of aflatoxin is considered a quality 
characteristic in pistachios \1\ because concerns about aflatoxin 
contamination can impact consumers' perception of the quality of 
pistachios, and therefore negatively impact demand. According to 
research provided by the industry, poor quality pistachios impact 
demand and the potential growth of demand for pistachios.\2\ Moreover, 
any market disturbances related to aflatoxin in pistachios, regardless 
of the origin of those pistachios, could have a detrimental effect on 
the pistachio industry.\3\
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    \1\ Gibbons, Jeff; 2002. Testimony in Pistachios Grown in 
California; Hearing on Proposed Marketing Agreement and Order No. 
983. Pages 326-359.
    \2\ Sumner, Daniel A; 2002. Testimony in Pistachios Grown in 
California; Hearing on Proposed Marketing Agreement and Order No. 
983. 2002. Pages 698-735 and 747-820.
    \3\ Reinecke, Karen; 2002. Testimony in Pistachios Grown in 
California; Hearing on Proposed Marketing Agreement and Order No. 
983. Pages 152-183.
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    The new regulation establishes a maximum aflatoxin tolerance level 
of 15 ppb for lots of pistachios imported into the U.S. for human 
consumption. As required under section 8e of the Act, this is the same 
level currently prescribed for domestic pistachios regulated under the 
order. Establishing a 15 ppb limit for aflatoxin in all pistachios 
marketed for human consumption in the United States is expected to 
bolster overall consumer confidence in pistachio quality and strengthen 
the demand for pistachios. Comparatively, the international Codex 
Alimentarius Commission's (Codex) maximum aflatoxin tolerance for 
pistachios is 10 ppb. The domestic pistachio industry believes that 15 
ppb is appropriate to ensure the quality of pistachios sold in U.S. 
markets.\4\ Research also supports the 15 ppb tolerance.\5\ 
Additionally, a 15 ppb tolerance for aflatoxin in domestic and imported 
pistachios is consistent with existing regulations for all domestic and 
imported peanuts marketed in the United States, for which USDA has 
established a 15 ppb aflatoxin tolerance.\6\
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    \4\ Gibbons, Jeff; 2002. Testimony in Pistachios Grown in 
California; Hearing on Proposed Marketing Agreement and Order No. 
983. 2002. Pages 326-359.
    \5\ Eaton, David L.; Jennifer E. Hobden; and Bruce J. Kelman. 
2002. Aflatoxin in Pistachios: Establishing a Regulatory Action 
Level in Support of a Proposed Federal Marketing Order. 11 pages.
    \6\ 7 CFR part 996--Minimum Quality and Handling Standards for 
Domestic and Imported Peanuts Marketed in the United States.
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Aflatoxin Sampling and Testing Procedures

    The new regulation provides for aflatoxin sampling procedures based 
on lot size. Such sampling procedures are the same as or comparable to 
those established for domestic shipments, and mirror the sampling 
procedures prescribed for pistachio shipments to the European Union. At 
the discretion of the importer, pistachio lots arriving at a U.S. port 
of entry will be warehoused near the port or shipped inland to a 
pistachio handling facility to await aflatoxin sampling and testing. 
Importers will be responsible for any transportation or storage fees 
incurred. Depending on the size of the lot, a specified number of 
incremental samples will be pulled and combined to form a lot sample. 
The lot sample will then be divided into smaller test samples, 
depending upon the size of the lot to be tested. The required weight of 
lot samples and test samples differs between inshell pistachios and 
shelled kernels because of the additional weight of the shells for 
inshell pistachios. The drawing and dividing of all samples must be 
conducted by or under the supervision of a Federal or Federal-State 
inspector.
    Following the drawing and dividing of samples, each sample must be 
properly identified and submitted to a USDA or USDA-accredited 
laboratory for analysis. Test samples will be prepared and analyzed 
using High Pressure Liquid Chromatography (HPLC) or the immunoaffinity 
column with direct flourometry method as approved by the Association of 
Official Analytical Chemists (AOAC). The aflatoxin level will be 
calculated on a kernel weight basis.
    For lots of up to 4,400 lbs, one test sample will be analyzed. If 
the sample has an aflatoxin level at or below 15 ppb, the lot may be 
certified as negative for aflatoxin on the aflatoxin inspection 
certificate, which will be completed by the laboratory. If the 
aflatoxin level is greater than 15 ppb, the lot fails, and the 
laboratory will fill out a failed lot notification report for 
submission to the importer, the U.S. Customs and Border Protection 
(Customs), and USDA.
    For lots of more than 4,400 lbs, two test samples will be prepared. 
If the first sample has an aflatoxin level at or below 10 ppb, the lot 
may be certified as negative for aflatoxin on the aflatoxin inspection 
certificate. Analysis of the other test sample would be unnecessary. If 
the aflatoxin level of the first test sample is above 20 ppb, the lot 
fails, and the laboratory will fill out a failed lot notification 
report for submission to the importer, Customs, and USDA. If the 
aflatoxin level of the first test sample is higher than 10 ppb and at 
or below 20 ppb, the importer may elect to test the second sample or 
rework the lot and resubmit it for testing. If the importer chooses to 
proceed with testing the second sample, the results from testing both 
samples will be averaged. If the average results are at or below 15 
ppb, the lot may be certified negative for aflatoxin. If the average 
results are higher than 15 ppb, the lot fails and the accredited lab 
will submit a failed lot notification report to the importer, Customs, 
and USDA. If the importer chooses to rework the lot after the first 
sample is analyzed, the lot will again be subject to sampling and 
testing as if it were a new lot. If an aflatoxin inspection certificate 
is issued certifying that a lot is negative for aflatoxin at any stage 
of the sequential testing (meaning that the lot's aflatoxin content is 
below the maximum threshold), the certification will state that the lot 
meets the Sec.  8e import aflatoxin requirements. The certification 
will expire after 12 months.

[[Page 51688]]

    Upon notification of any failed lot, the importer will work with 
Customs to determine the appropriate disposition of the pistachios. 
Pistachios that fail to meet the aflatoxin requirements will be 
required to be sold for non-human consumption, exported to another 
destination with a higher aflatoxin tolerance, or disposed of under the 
supervision of Customs, and the Federal or Federal-State Inspection 
Programs could be called upon to verify disposals. Any costs associated 
with certifying a disposal will be paid by the importer.

Rework Procedures

    Although reworking and retesting of a failed lot is not required, 
importers may opt to take those steps, which would provide them with an 
opportunity to secure a return for their imported product while 
maintaining the integrity of the aflatoxin requirements. The 
alternative would be to dispose of the lot through proper channels as 
described above. The rework procedures described below are the same as 
or comparable to those required for domestic pistachios under the 
order.
    Inshell pistachios. Rework procedures for inshell pistachios 
failing to meet aflatoxin requirements require importers to remove 100 
percent of the failing lot from its bulk or retail packaging. These 
pistachios are required to pass through the sorting stages of the 
handling process in order to remove those nuts having the 
characteristics most susceptible to harboring aflatoxin. After 
reworking the lot, the importer will report the weight of the total 
accepted and rejected product to Customs and USDA on a rework and 
failed lot disposition report, and the acceptable portion of the 
reworked lot will be resampled and tested for aflatoxin. In the case of 
a reworked lot, the lot sample size and the test sample size will be 
doubled from that specified in the initial testing. If, after having 
been reworked, the lot fails aflatoxin testing for a second time, the 
lot may be shelled and the kernels reworked, sampled, and tested in the 
manner required for an original lot of pistachio kernels. If the 
importer decides not to pursue further reworking of the failed lot, 
those pistachios are prohibited from entering the stream of commerce 
for domestic human consumption. The lot must be exported, sold for 
domestic non-human consumption purposes, or disposed of as described 
above. The importer must report the lot's final disposition to Customs 
and USDA on a rework and failed lot disposition report.
    Shelled pistachios. Rework procedures for pistachio kernels failing 
to test negative for aflatoxin will also require a reprocessing of 100 
percent of the volume of the failing lot. As with inshell pistachios, 
after reworking, the total weight of the accepted product and the total 
weight of the rejected product will be reported by the importer to 
Customs and USDA on the rework and failed lot disposition report. The 
reworked lot of kernels must be resampled and retested for aflatoxin 
content as previously described.

Comingling

    Importers may comingle certified lots with other certified lots of 
pistachios. However, to maintain the integrity of certified lots, the 
comingling of certified and uncertified lots of pistachios will cause 
the loss of certification for the comingled lots.

Exemptions

    Section 983.70 of the marketing order provides that domestic 
handlers may handle pistachios free of the regulatory and assessment 
provisions of the order if such pistachios are handled in quantities 
not exceeding 5,000 dried pounds during any production year. The 
purpose of this provision is to provide an exemption from the 
requirements of the order for small quantities of pistachios such as 
those that are grown for home or personal use. Further, this exemption 
is applied on a production year basis. Accordingly, under the import 
regulation, a comparable 5,000-pound annual exemption applies to 
importers of pistachios for human consumption. Also, substandard 
pistachios imported for use in non-human consumption outlets are not 
subject to the proposed aflatoxin regulations.

Compliance

    Any importer who violates any provision of the import regulation 
may be subject to a forfeiture in the amount prescribed in section 
608a(5) of the Act (7 U.S.C. 601-674), or, upon conviction, penalties 
in the amounts prescribed in section 608c(14) of the Act, or to both 
forfeiture and penalty. False representation to any agency of the 
United States on any matter within its jurisdiction, knowing it to be 
false, is a violation of 18 U.S.C. 1001, which provides for a fine or 
imprisonment or both.

Safeguards

    Safeguard procedures in the form of importer and receiver reporting 
requirements will be used to ensure that substandard pistachios 
imported for purposes other than human consumption are used only in 
authorized outlets exempt from the aflatoxin regulations. The safeguard 
procedures are comparable to those currently specified for the 
importation of other exempted commodities. Under the new regulation, 
importers and receivers of pistachios for other than human consumption 
purposes are required to complete and submit to USDA an Importer's 
Exempt Commodity Form (Form FV-6), the generic form used by importers 
and receivers of other exempted commodities. The information provided 
on Form FV-6 will be used by USDA to track pistachios marketed for 
exempted uses.
    This rule establishes maximum aflatoxin tolerance levels and 
mandatory testing and certification requirements for lots of pistachios 
offered for importation into the United States. The import quality 
requirements will be implemented in accordance with section 8e of the 
Act. These provisions are intended to ensure that pistachios imported 
into the United States for the purposes of domestic human consumption 
are of a quality comparable to those pistachios regulated under 
Marketing Order No. 983 and contain no more than 15 ppb of aflatoxin.

Final Regulatory Flexibility Analysis

    Pursuant to the requirements set forth in the Regulatory 
Flexibility Act (RFA) (5 U.S.C. 601-612), the Agricultural Marketing 
Service (AMS) has considered the economic impact of this final rule on 
small entities. Accordingly, AMS has prepared this final regulatory 
flexibility analysis.
    The purpose of the RFA is to fit regulatory actions to the scale of 
business subject to such actions in order that small businesses will 
not be unduly or disproportionately burdened. Marketing orders issued 
pursuant to the Act, and rules issued thereunder, are unique in that 
they are brought about through group action of essentially small 
entities acting on their own behalf. Import regulations issued under 
the Act are based on those established under Federal marketing orders.
    Small agricultural service firms, which include importers and 
receivers, have been defined by the Small Business Administration (SBA) 
(13 CFR 121.201) as those having annual receipts of less than 
$7,000,000.
    AMS estimates that there are approximately 64 importers and 
receivers who handled shipments of pistachios into the United States 
between 2007 and 2009. About 10 of the 64 firms are also substantially 
engaged in the marketing of U.S. grown pistachios, and are large firms 
according

[[Page 51689]]

to the SBA definition. Most of the remaining 54 firms import a number 
of different food products, and most are also likely to be large firms 
under the SBA definition, even though they generally import only small 
quantities of pistachios. There are also seven USDA-accredited 
laboratories in California that perform aflatoxin testing for 
pistachios. AMS estimates that four of the seven laboratories would be 
considered small firms according to the SBA definition.
    Turkey and Iran have historically been the source of most 
pistachios imported into the U.S. Turkish pistachios are imported 
predominantly in the shell, while Iranian pistachios are typically 
imported shelled. Imported pistachios also come from Italy, China, 
Switzerland, France, Australia, Hong Kong, and Italy. Most pistachios 
imported from other nations are also shelled. This import regulation 
establishes protocols for aflatoxin analysis for both inshell and 
shelled pistachios.
    Section 8e of the Act provides that when certain domestically 
produced commodities, including pistachios, are regulated under a 
Federal marketing order, imports of that commodity must meet the same 
or comparable grade, quality, size, and maturity requirements.
    This rule establishes minimum quality requirements for lots of 
imported pistachios by specifying a maximum aflatoxin tolerance level 
as well as aflatoxin testing and certification requirements. Importers 
are responsible for arranging for the required transportation, storage, 
sampling, testing, and certification of such pistachios prior to 
importation. Sampling is conducted by the Federal or Federal-State 
inspection services, and aflatoxin testing and certification is 
performed by USDA or USDA-accredited laboratories.
    These import aflatoxin testing and certification requirements are 
the same as or comparable to those implemented under the order 
regulating the handling of pistachios grown in California, Arizona, and 
New Mexico. Pistachios failing to meet the aflatoxin requirements on 
initial analysis may be reworked and retested, exported to another 
destination with a higher aflatoxin tolerance, or disposed of in 
authorized outlets under the supervision of Customs, with assistance 
from the inspection service if necessary, to verify proper disposal of 
substandard nuts. Procedures for these activities are also described. 
Lots of imported pistachios that fail aflatoxin testing may be diverted 
to certain non-human consumption outlets and are subject to the 
safeguard provisions of Sec.  999.500. Some reporting and recordkeeping 
requirements also are included in the pistachio import regulation. 
These requirements also are the same as or comparable to those 
implemented under the order.
    The cost of testing pistachios for aflatoxin varies, depending on 
such factors as the location of the port of entry and the size of the 
lot to be tested. For purposes of estimating an average per-pound 
testing expense for imported pistachios, this analysis assumes an 
average lot equal to one container load weighing 16,000 pounds of 
inshell pistachios arriving at the Port of San Francisco and being 
tested for aflatoxin by an accredited laboratory in Fresno, California.
    In the following example computation of testing costs, there are 
four elements: (1) A fee (at an hourly rate) charged by the inspection 
service to draw and prepare the sample, (2) overnight shipping, (3) a 
fee charged by the laboratory to determine the level of aflatoxin, and 
(4) the ``unit value'' of the quantity of pistachios drawn for the 
sample. The unit value used in this example computation is the average 
for the last 3 complete marketing years for which import data are 
available, 2007/08-2009/10. The unit value for the 3-year period ($1.68 
per pound) is computed by dividing the average 3-year import value 
($2,900,000) by the average import quantity (1,725,000 pounds). Data 
are from FAS.
    The inspection service fee of $74 per hour is multiplied by the 
estimated time of 2 hours to draw a sample, for a cost of $148. The 
overnight shipping cost and laboratory fee are estimated at $200 and 
$100, respectively.
    The next step in the example computation is value of pistachios 
drawn for the sample. Under the new section 996.600, in section d) 
Sampling, the weight of a lot sample is 16 kilograms (equivalent to 
35.3 pounds) for a lot weighing between 11,001 and 22,000 pounds. 
Multiplying 35.3 pounds times the unit value of imported pistachios 
($1.68) yields a value of the tested sample of approximately $59. 
Assuming that aflatoxin certification of the 16,000-pound lot requires 
the testing of only one sample, the sum of the four cost elements would 
be $507, or approximately 3.2 cents per pound (approximately two 
percent of the unit value of imported pistachios).
    It is likely that a pistachio lot arriving at the Port of San 
Francisco would be transported to an inland handling facility to await 
sampling and testing and would incur no additional storage costs. 
However, if the lot is stored at a Customs warehouse near the port, 
storage fees ranging between $100 and $500 per day could be incurred 
while the samples are analyzed. Analysis and certification is estimated 
to require between two to five days. Assuming a three day turnaround 
for a lot incurring $200 per day storage fees, approximately $600, or 
3.75 cents per pound of pistachios could be added to the testing 
expense described above.
    Regarding the impact of this rule on affected entities, this final 
rule establishes an import regulation for pistachios as provided in 
section 8e of the Act. The import regulation requires importers to 
arrange for the testing and certification of all imports of pistachios 
for human consumption prior to importation. There are some increased 
costs to importers associated with the testing and certification of 
imported product. However, it is expected that consumer satisfaction, 
and therefore demand, will be increased by regulating imports and 
domestic product uniformly. The additional costs are expected to be 
offset by the benefits of supplying the U.S. marketplace with only high 
quality pistachios. As mentioned above, these import requirements are 
the same as or comparable to those established for U.S. domestic 
pistachio shipments. The domestic industry recently adopted aflatoxin 
sampling and testing procedures that align with the Codex Alimentarius 
Commission's (Codex) sampling plan (75 FR 43045; July 23, 2010). The 
Codex sampling plan is used by the European Commission as its 
regulation for the importation of tree nuts into the European Union. 
Thus, these import requirements are comparable to those widely 
recognized by international pistachio markets.
    Industry information suggests that when aflatoxin levels in 
imported lots of pistachios exceed the FDA maximum tolerance of 20 ppb, 
the levels are generally significantly higher than 20 ppb. Very few 
lots test between 15 ppb and 20 ppb. It is anticipated that most 
imported lots will test below the proposed 15 ppb tolerance. Thus, 
establishing a maximum aflatoxin tolerance of 15 ppb for imported 
pistachios is not expected to have a significant impact on trade.
    This import regulation requires importers to report any pistachio 
lots that fail aflatoxin testing and any lots that are reworked or 
disposed on two new forms. It is estimated that the total reporting 
burden associated with these two forms is 11.6 hours for the industry 
as a whole. The new reporting forms require the minimum amount of 
information necessary to effectively

[[Page 51690]]

carry out the requirements and intent of the Act and to administer 
section 8e compliance activities. These reports are the same as or 
comparable to the reports and procedures currently required by other 
domestic marketing orders and import regulations.
    The alternative to this action is to continue to allow pistachios 
to be imported without having to meet aflatoxin requirements that are 
the same as or comparable to those established for domestic pistachios. 
However, the import regulation is necessary to ensure that imported and 
domestic pistachios for human consumption in the United States are of 
uniformly high quality. Further, the Act requires that import 
regulations be issued whenever marketing order regulations are 
established for pistachios. Therefore, this alternative is not 
appropriate.
    In compliance with OMB regulations (5 CFR part 1320) which 
implement the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 35), 
forms FV-249 Imported Pistachios--Failed Lot Notification Report and 
FV-251 Imported Pistachios--Rework and Failed Lot Disposition Report, 
were approved by OMB and assigned OMB Number 0581-0278 on November 23, 
2011. Following the publication of this final rule, AMS will submit a 
request to OMB to merge these two forms with the forms currently 
approved under OMB No. 0581-0215, Pistachios Grown in California, 
Arizona, and New Mexico.
    AMS is committed to complying with the E-Government Act, to promote 
the use of the Internet and other information technologies to provide 
increased opportunities for citizen access to Government information 
and services, and for other purposes.
    Additionally, except for the applicable domestic regulations, USDA 
has not identified any relevant Federal rules that duplicate, overlap, 
or conflict with this rule. Reports and forms required under the 
pistachio import regulation will be reviewed periodically to reduce 
information requirements and duplication by industry and public sector 
agencies.
    A proposed rule regarding this action was published in the Federal 
Register on October 21, 2011 (76 FR 65411). Copies of the rule were 
mailed or sent via facsimile to all known pistachio importers and to 
the embassies of countries from whom pistachios are currently imported 
in significant volumes. The rule was made available through the 
Internet by USDA and the Office of the Federal Register. A 60-day 
comment period ending December 20, 2011, was provided to allow 
interested persons to respond to the proposal.
    Four comments were received during the comment period in response 
to the proposal. All four commenters were supportive of the proposed 
regulation. One commenter, representing the domestic pistachio 
industry, noted that the proposed provisions for reworking and 
retesting imported lots that test positive for aflatoxin provided a 
safeguard against testing anomalies so that shipments are not unfairly 
rejected while ensuring a flow of high quality pistachios into the 
stream of commerce. Two private citizen commenters urged USDA to 
facilitate the timely and uniform sampling and testing of imported lots 
upon entry to optimize product freshness and marketability. Import 
regulations are applied uniformly at all U.S. ports of entry, and 
Federal and Federal-state inspection protocols are consistent 
throughout the U.S. Similarly, all laboratories authorized to 
participate in aflatoxin testing for imported pistachios have been 
approved by USDA and conform to uniform analytical standards and 
practices. The sampling and testing of imported lots will be handled 
with the same timeliness and integrity applied to domestic lots.
    The proposed regulation named a commercially available testing kit 
as one option for aflatoxin analysis in imported pistachios. One 
commenter suggested that any AOAC-approved method, rather than a 
particular product, be specified in the regulation to encourage the 
ongoing development of improved technology and ensure its availability 
to the industry. USDA does not intend to endorse the use of specific 
commercial products. However, as mentioned above, to ensure analytical 
testing uniformity and integrity, USDA has currently approved only two 
methods for aflatoxin testing in domestic and imported pistachios. Both 
are included in the import regulation. Accordingly, Sec.  999.600(e)(1) 
of the import regulation has been modified by replacing the name of the 
specific testing kit with a generic description of the approved method. 
USDA would consider further modifications to the regulation as new 
analytical methods are tested and approved.
    A small business guide on complying with fruit, vegetable, and 
specialty crop marketing agreements and orders may be viewed at: 
www.ams.usda.gov/MarketingOrdersSmallBusinessGuide. Any questions about 
the compliance guide should be sent to Laurel May at the previously 
mentioned address in the FOR FURTHER INFORMATION CONTACT section.
    In accordance with section 8e of the Act, the United States Trade 
Representative has concurred with the issuance of this final rule.
    After consideration of all relevant matter presented, including the 
information provided by the industry and other available information, 
it is hereby found that this rule, as hereinafter set forth, will tend 
to effectuate the declared policy of the Act.

List of Subjects in 7 CFR Part 999

    Dates, Filberts, Food grades and standards, Imports, Nuts, Prunes, 
Raisins, Reporting and recordkeeping requirements, Walnuts.
    For the reasons set forth above, 7 CFR part 999 is amended as 
follows:

PART 999--SPECIALTY CROPS; IMPORT REGULATIONS

0
1. The authority citation for 7 CFR Part 999 continues to read as 
follows:

    Authority: 7 U.S.C. 601-674.

0
2. Amend Sec.  999.500 by revising the section heading and paragraphs 
(a) and (d) to read as follows:


Sec.  999.500  Safeguard procedures for walnuts, certain dates, and 
pistachios exempt from grade, size, quality, and maturity requirements.

    (a) Each person who imports or receives any of the commodities 
listed in paragraphs (a)(1) through (a)(3) of this section shall file 
an ``Importer's Exempt Commodity Form'' (FV-6) with the Marketing Order 
and Agreement Division, Fruit and Vegetable Programs, AMS, USDA, and 
shall provide a printed copy of the completed Form FV-6 to the U.S. 
Customs and Border Protection Regional Director or District Director, 
as applicable, at the port at which the customs entry is filed. A 
printed copy shall accompany the lot to the exempt outlet specified on 
the form. Any lot of any commodity offered for inspection or aflatoxin 
testing and, all or a portion thereof, subsequently imported as exempt 
under this provision shall also be reported on an ``Importer's Exempt 
Commodity Form.'' Such form, accompanied by a copy of the applicable 
inspection certificate, shall be provided to the Marketing Order and 
Agreement Division. The applicable commodities are:
    (1) Dates which are donated to needy persons, prisoners or Native 
Americans on reservations;
    (2) Walnuts which are: Green walnuts (so immature that they cannot 
be used for drying and sale as dried walnuts); walnuts used in non-
competitive outlets such as use by charitable institutions, relief 
agencies, governmental agencies for school lunch programs, and

[[Page 51691]]

diversion to animal feed or oil manufacture; or
    (3) Substandard pistachios which are for non-human consumption 
purposes.
* * * * *
    (d) All FV-6 forms and other correspondence regarding entry of 8e 
commodities must be submitted online, mailed or faxed to the Marketing 
Order and Agreement Division, Fruit and Vegetable Programs, AMS, USDA, 
1400 Independence Avenue SW., STOP 0237, Washington, DC 20250-0237; 
Telephone (202) 720-4607; or FAX (202) 720-5698. FV-6 forms submitted 
by FAX must be followed by a mailed, original copy of the FV-6.

0
3. Add a new Sec.  999.600 to read as follows:


Sec.  999.600  Regulation governing the importation of pistachios.

    (a) Definitions. As used in this part:
    (1) Aflatoxin is one of a group of mycotoxins produced by the molds 
Aspergillus flavus and Aspergillus parasiticus. Aflatoxins are 
naturally occurring compounds produced by molds, which can be spread in 
improperly processed and stored nuts, dried fruits, and grains.
    (2) Aflatoxin inspection certificate means a certificate issued by 
a USDA or USDA-accredited laboratory.
    (3) Certified lots of pistachios are those for which aflatoxin 
inspection certificates have been issued.
    (4) Customs means the U.S. Customs and Border Protection.
    (5) Importation of pistachios means the release of pistachios from 
the custody of U.S. Customs and Border Protection.
    (6) Importer means a person who engages in the importation of 
pistachios into the United States.
    (7) Inshell pistachios means pistachios that have shells that have 
not been removed.
    (8) Inspection Service means the Federal Inspection Service, Fruit 
and Vegetable Programs, Agricultural Marketing Service, USDA, or the 
Federal-State Inspection Programs.
    (9) Inspector means any inspector authorized by USDA to draw and 
prepare pistachio samples.
    (10) Lot means any quantity of pistachios that is submitted for 
testing purposes under this part.
    (11) Person means an individual, partnership, limited-liability 
corporation, corporation, trust, association, or any other business 
unit.
    (12) Pistachio means the nut of the pistachio tree, Pistachia vera, 
whether inshell or shelled.
    (13) Secretary means the Secretary of Agriculture of the United 
States or any officer or employee of the United States Department of 
Agriculture who is, or who may hereafter be, authorized to act in his/
her stead.
    (14) Shelled pistachios means pistachio kernels, or portions of 
kernels, after the pistachio shells have been removed.
    (15) Substandard pistachios means pistachios, inshell or shelled, 
that do not comply with the aflatoxin regulations of this section.
    (16) USDA means the United States Department of Agriculture, 
including any officer, employee, service, program, or branch of the 
Department of Agriculture, or any other person acting as the 
Secretary's agent or representative in connection with any provisions 
of this section.
    (17) USDA laboratory means laboratories of the Science and 
Technology Programs, Agricultural Marketing Service, USDA, that perform 
chemical analyses of pistachios for aflatoxin content.
    (18) USDA-accredited laboratory means a laboratory that has been 
approved or accredited by the U.S. Department of Agriculture to perform 
chemical analyses of pistachios for aflatoxin content.
    (b) Importation Requirements. The importation of any lot of 
pistachios for human consumption is prohibited unless it meets the 
requirements contained in this section, which are determined to be the 
same as or comparable to those imposed upon domestic pistachios handled 
pursuant to Order No. 983, as amended (part 983 of this chapter).
    (c) Maximum aflatoxin tolerance. No importer shall ship for 
domestic human consumption lots of pistachios that exceed an aflatoxin 
level of 15 ppb. Compliance with the aflatoxin requirements of this 
section shall be determined upon the basis of sampling by a USDA-
authorized inspector and testing by a USDA or USDA-accredited 
laboratory. All shipments must be covered by an aflatoxin inspection 
certificate issued by the laboratory. Testing and certification must be 
completed prior to the importation of pistachios.
    (d) Sampling.
    (1) Prior to, or upon, arrival of a pistachio lot at a port of 
entry, the importer shall provide a copy of the Customs entry 
documentation for the pistachio lot or lots to the Inspection Service 
office that will draw and prepare samples of the pistachio shipment. 
More than one lot may be listed on one entry document. The 
documentation shall include: The Customs entry number; the container 
number(s) or other identification of the lot(s); the weight of the 
pistachios in each lot being imported, the location where the lot will 
be made available for sampling; and a contact name or telephone number 
at the testing location. The Inspection Service shall sign, stamp, and 
return the entry document to the importer. The importer shall provide a 
copy of the relevant entry documentation and such other identifying 
information as may be requested for each pistachio lot to the inspector 
at the time samples are drawn and prepared.
    (2) All sampling for aflatoxin testing shall be performed by USDA-
authorized inspectors in accordance with USDA rules and regulations 
governing the inspection and certification of fresh fruits, vegetables, 
and other products (7 CFR part 51). The cost of each such sampling and 
related certification shall be borne by the applicant. Whenever 
pistachios are offered for sampling and testing, the applicant shall 
furnish any labor and pay any costs incurred for storing, moving, and 
opening containers as may be necessary for proper sampling and testing. 
The applicant should make advance arrangements with the Inspection 
Service to avoid delay in scheduling sampling. Importers may make 
arrangements for required sampling by contacting the Inspection Service 
office closest to where the pistachios will be made available for 
sampling. For questions regarding inspection services, a list of 
Federal or Federal-State Inspection Program offices, or for further 
assistance, importers may contact: Fresh Products Branch, Fruit and 
Vegetable Programs, AMS, USDA, 1400 Independence Avenue SW., Room 1536-
S, Washington, DC, 20250; Telephone: (202) 720-5870; Fax: (202) 720-
0393.
    (3) Lot samples shall be drawn from each lot of pistachios 
designated for aflatoxin testing, and individual test samples shall be 
prepared by, or under the supervision of, an inspector. Each sample 
shall be drawn and prepared in accordance with the sample size 
requirements outlined in Tables 1 and 2 below. The gross weight of the 
inshell lot and test samples for aflatoxin testing and the minimum 
number of incremental samples required are shown in Table 1. The gross 
weight of the kernel lot and test samples for aflatoxin testing and the 
minimum number of incremental samples required is shown in Table 2. If 
more than one test sample is necessary, the test samples shall be 
designated by the inspector as Test Sample 1 and Test Sample 
2. Each sample shall be placed in a suitable container, with 
the lot number clearly

[[Page 51692]]

identified, and the importer shall submit it, along with a copy of the 
customs entry documentation, to a USDA or USDA-accredited laboratory. 
The importer shall assume all costs for shipping samples to the 
laboratory.

                 Table 1--Inshell Pistachio Lot Sampling Increments for Aflatoxin Certification
----------------------------------------------------------------------------------------------------------------
                                                             Minimum number
                                                             of incremental    Total weight of   Weight of test
                    Lot weight  (lbs.)                       samples for the     lot sample          sample
                                                               lot sample        (kilograms)       (kilograms)
----------------------------------------------------------------------------------------------------------------
220 or less...............................................                10               2.0               2.0
221-440...................................................                15               3.0               3.0
441-1,100.................................................                20               4.0               4.0
1,101-2,200...............................................                30               6.0               6.0
2,201-4,400...............................................                40               8.0               8.0
4,401-11,000..............................................                60              12.0               6.0
11,001-22,000.............................................                80              16.0               8.0
22,001-150,000............................................               100              20.0              10.0
----------------------------------------------------------------------------------------------------------------


              Table 2--Shelled Pistachio Kernel Lot Sampling Increments for Aflatoxin Certification
----------------------------------------------------------------------------------------------------------------
                                                             Minimum number
                                                             of incremental    Total weight of   Weight of test
                    Lot weight  (lbs.)                       samples for the     lot sample          sample
                                                               lot sample        (kilograms)       (kilograms)
----------------------------------------------------------------------------------------------------------------
220 or less...............................................                10               1.0               1.0
221-440...................................................                15               1.5               1.5
441-1,100.................................................                20               2.0               2.0
1,101-2,200...............................................                30               3.0               3.0
2,201-4,400...............................................                40               4.0               4.0
4,401-11,000..............................................                60               6.0               3.0
11,001-22,000.............................................                80               8.0               4.0
22,001-150,000............................................               100              10.0               5.0
----------------------------------------------------------------------------------------------------------------

     (e) Aflatoxin testing. Importers may make arrangements for 
required chemical analysis for aflatoxin content at the nearest USDA or 
USDA-accredited laboratory. For further information concerning chemical 
analysis and a list of laboratories authorized to conduct such analysis 
contact: Science and Technology Programs, AMS, USDA, 1400 Independence 
Avenue SW., STOP 0270, Washington, DC 20250-0270; Telephone: (202) 720-
5231; Fax: (202) 720-6496.
    (1) Aflatoxin test samples shall be received and logged by a USDA 
or USDA-accredited laboratory, and each test sample shall be prepared 
and analyzed using High Pressure Liquid Chromatography (HPLC) or the 
AOAC-approved immunoaffinity column with direct fluorometry method. The 
aflatoxin level shall be calculated on a kernel weight basis.
    (2) Lots that require a single test sample will be certified as 
``negative'' on the aflatoxin inspection certificate if the sample has 
an aflatoxin level at or below 15 ppb. If the aflatoxin level is above 
15 ppb, the lot fails and the laboratory shall fill out an Imported 
Pistachios--Failed Lot Notification report (Form FV-249) as described 
in paragraph (h)(1) of this section.
    (3) Lots that require two test samples will be certified as 
``negative'' on the aflatoxin inspection certificate if Test Sample 
1 has an aflatoxin level at or below 10 ppb. If the aflatoxin 
level of Test Sample 1 is above 20 ppb, the lot fails and the 
laboratory shall fill out an Imported Pistachios--Failed Lot 
Notification report (Form FV-249). If the aflatoxin level of Test 
Sample 1 is above 10 ppb and at or below 20 ppb, the 
laboratory may, at the importer's discretion, analyze Test Sample 
2 and average the test results of Test Samples 1 and 
2. Alternately, the importer may elect to withdraw the lot 
from testing, rework the lot, and resubmit it for testing after 
reworking. If the importer directs the laboratory to proceed with the 
analysis of Test Sample 2, a lot will be certified as negative 
to aflatoxin and the laboratory shall issue an aflatoxin inspection 
certificate if the averaged result of Test Samples 1 and 
2 is at or below 15 ppb. If the average aflatoxin level of 
Test Samples 1 and 2 is above 15 ppb, the lot fails 
and the laboratory shall fill out an Imported Pistachios--Failed Lot 
Notification report (Form FV-249).
    (4) If an importer does not elect to use Test Sample 2 for 
certification purposes, the importer may request that the laboratory 
return the sample to the importer.
    (f) Certification. Each lot of pistachios sampled and tested in 
accordance with paragraphs (d) and (e) of this section shall be covered 
by an aflatoxin inspection certificate completed by the laboratory. The 
certification expires for the lot or remainder of the lot after 12 
months. Each such certificate shall set forth the following:
    (1) The date and place of sampling and testing.
    (2) The name of the applicant.
    (3) The Customs entry number pertaining to the lot or shipment 
covered by the certificate.
    (4) The quantity and identifying marks of the lot tested.
    (5) The aflatoxin level of the lot, stated on a kernel weight 
basis.
    (6) The statement, if applicable: ``Meets U.S. import requirements 
under section 8e of the AMA Act of 1937.''
    (7) If the lot fails to meet the import requirements, a statement 
to that effect and the reasons therefore.
    (g) Failed lots/rework procedure. Any lot or portion thereof that 
fails to meet the import requirements prior to or after reconditioning 
may be exported, sold for non-human consumption, or disposed of under 
the supervision of Customs and, if necessary for verification purposes, 
the Federal or Federal-State Inspection Programs, with

[[Page 51693]]

the costs of certifying the disposal of such lot paid by the importer.
    (1) Inshell rework procedure for aflatoxin. If inshell rework is 
selected as a remedy to meet the aflatoxin requirements of this part, 
then 100 percent of the product within that lot shall be removed from 
the bulk and/or retail packaging containers and reworked to remove the 
portion of the lot that caused the failure. Reworking shall consist of 
mechanical, electronic, or manual procedures normally used in the 
handling of pistachios. After the rework procedure has been completed, 
the total weight of the accepted product and the total weight of the 
rejected product shall be reported by the importer to Customs and USDA 
on an Imported Pistachios--Rework and Failed Lot Disposition report 
(Form FV-251) as described in paragraph (h)(2) of this section. The 
reworked lot shall be sampled and tested for aflatoxin as specified in 
paragraphs (d) and (e) of this section, except that the lot sample size 
and the test sample size shall be doubled. If, after the lot has been 
reworked and tested, it fails the aflatoxin test for a second time, the 
lot may be shelled and the kernels reworked, sampled, and tested in the 
manner specified for an original lot of kernels, or the failed lot may 
be exported, used for non-human consumption, or otherwise disposed of.
    (2) Kernel rework procedure for aflatoxin. If pistachio kernel 
rework is selected as a remedy to meet the aflatoxin requirements of 
this part, then 100 percent of the product within that lot shall be 
removed from the bulk and/or retail packaging containers and reworked 
to remove the portion of the lot that caused the failure. Reworking 
shall consist of mechanical, electronic, or manual procedures normally 
used in the handling of pistachios. After the rework procedure has been 
completed the total weight of the accepted product and the total weight 
of the rejected product shall be reported to Customs and USDA on an 
Imported Pistachios--Rework and Failed Lot Disposition report (Form FV-
251). The reworked lot shall be sampled and tested for aflatoxin as 
specified in paragraphs (d) and (e) of this section.
    (3) Failed lot reporting. If a lot fails to meet the aflatoxin 
requirements of this part, the testing laboratory shall complete an 
Imported Pistachios--Failed Lot Notification report (Form FV-249) as 
described in paragraph (h)(1) of this section, and shall submit it to 
Customs, the importer, and USDA within 10 working days of the test 
failure. This form must be completed and submitted each time a lot 
fails aflatoxin testing.
    (h) Reports and Recordkeeping.
    (1) Form FV-249 Imported Pistachios--Failed Lot Notification. Each 
USDA or USDA-accredited laboratory shall notify the importer; Customs; 
and the Marketing Order and Agreement Division, Fruit and Vegetable 
Programs, AMS, USDA; of all lots that fail to meet the maximum 
aflatoxin requirements by completing this form and submitting it within 
10 days of failed aflatoxin testing.
    (2) Form FV-251 Imported Pistachios--Rework and Failed Lot 
Disposition. Each importer who reworks a failing lot of pistachios 
shall complete this report and shall forward it to Customs and the 
Marketing Order and Agreement Division, Fruit and Vegetable Programs, 
AMS, USDA, no later than 10 days after the rework is completed. If 
rework is not selected as a remedy, the importer shall complete and 
submit this form within 10 days of alternate disposition of the lot.
    (i) Exemptions. Any importer may import pistachios free of the 
requirements of this section if such importer imports a quantity not 
exceeding a total of 5,000 dried pounds between September 1 and August 
31 of each year. Substandard pistachios imported for use in non-human 
consumption outlets shall be subject to the safeguard provisions 
contained in Sec.  999.500.
    (j) Reconditioning prior to importation. Nothing contained in this 
section shall be deemed to preclude reconditioning pistachios prior to 
importation, in order that such pistachios may be made eligible to meet 
the applicable aflatoxin regulations prescribed in paragraphs (c) 
through (f) of this section.
    (k) Comingling. Certified lots of pistachios may be comingled with 
other certified lots, but the comingling of certified lots and 
uncertified lots shall cause the loss of certification for the 
comingled lots.
    (l) Retesting. Whenever USDA has reason to believe that imported 
pistachios may have been damaged or deteriorated while in storage, USDA 
may reject the then effective inspection certificate and may require 
the owner of the pistachios to have them retested to establish whether 
or not such pistachios may be shipped for human consumption.
    (m) Compliance. Any person who violates any provision of this 
section shall be subject to a forfeiture in the amount prescribed in 
section 8a(5) of the Agricultural Marketing Agreement Act of 1937, as 
amended (7 U.S.C. 601-674), or, upon conviction, a penalty in the 
amount prescribed in section 8c(14) of the said Act, or to both such 
forfeiture and penalty. False representation to any agency of the 
United States on any matter within its jurisdiction, knowing it to be 
false, is a violation of 18 U.S.C. 1001, which provides for a fine or 
imprisonments or both.
    (n) Other import requirements. The provisions of this section do 
not supersede any restrictions or prohibitions on pistachios under the 
Federal Plant Quarantine Act of 1912, or any other applicable laws or 
regulations of city, county, State, or Federal Agencies including the 
Federal Food, Drug and Cosmetic Act.

    Dated: August 21, 2012.
David R. Shipman,
Administrator, Agricultural Marketing Service.
[FR Doc. 2012-20974 Filed 8-24-12; 8:45 am]
BILLING CODE 3410-02-P