[Federal Register Volume 81, Number 248 (Tuesday, December 27, 2016)]
[Rules and Regulations]
[Pages 94980-94986]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-31055]



[[Page 94980]]

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DEPARTMENT OF HOMELAND SECURITY

U.S. Customs and Border Protection

DEPARTMENT OF THE TREASURY

19 CFR Parts 12 and 127

[USCBP-2016-0056;CBP Dec. No. 16-28]
RIN 1515-AE13


Toxic Substance Control Act Chemical Substance Import 
Certification Process Revisions

AGENCY: U.S. Customs and Border Protection, Department of Homeland 
Security; Department of the Treasury.

ACTION: Final rule.

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SUMMARY: This document amends the U.S. Customs and Border Protection 
(CBP) regulations regarding the requirement to file a Toxic Substances 
Control Act (TSCA) certification when importing into the customs 
territory of the United States chemicals in bulk form or as part of 
mixtures and articles containing a chemical or mixture. This document 
amends the regulations to establish an electronic option for importers 
to file the required U.S. Environmental Protection Agency (EPA) TSCA 
certifications, consistent with the Security and Accountability for 
Every Port Act of 2006. This document further amends the regulations to 
clarify and add certain definitions, and to eliminate the paper-based 
blanket certification process.
    The document was prepared in consultation with EPA, the agency with 
primary responsibility for implementing TSCA.

DATES: Effective January 26, 2017.

FOR FURTHER INFORMATION CONTACT: For questions related to the filing of 
EPA forms with CBP, contact William Scopa, Partner Government Agencies 
Interagency Collaboration Division, Office of Trade, Customs and Border 
Protection, at [email protected]. For EPA policy questions, 
contact Harlan Weir, at [email protected].

SUPPLEMENTARY INFORMATION: 

A. Background

    Section 13 of the Toxic Substances Control Act (TSCA) (15 U.S.C. 
2612) governs the entry of those chemical substances and mixtures, and 
articles containing such chemical substances or mixtures into the 
customs territory of the United States and authorizes the Secretary of 
the Treasury, authority subsequently delegated to the U.S. Customs and 
Border Protection (CBP), to refuse entry of any chemical substance, 
mixture, or article that: (1) fails to comply with any rule in effect 
under TSCA; or (2) is offered for entry in violation of TSCA section 5 
or 6 (15 U.S.C. 2604 or 2605) or Subchapter IV (15 U.S.C. 2681 et 
seq.), or in violation of a rule or order under those provisions or in 
violation of an order issued in a civil action brought under TSCA 
section 5 or 7 (15 U.S.C. 2604 or 2606) or Subchapter IV (15 U.S.C. 
2681 et seq.). Section 13 also sets forth procedural requirements in 
connection with an entry refusal and authorizes CBP, after consultation 
with EPA, to issue rules for the administration of section 13.
    Section 13 of TSCA is implemented in the CBP regulations at 
Sec. Sec.  12.118-12.127 and 127.28 of title 19 of the Code of Federal 
Regulations (19 CFR 12.118-12.127, and 127.28). On August 29, 2016, 
U.S. Customs and Border Protection (CBP) published a Notice of Proposed 
Rulemaking (NPRM) in the Federal Register (81 FR 59157) proposing to 
amend the CBP regulations regarding the requirement to file a Toxic 
Substances Control Act (TSCA) certification when importing into the 
customs territory of the United States chemicals in bulk form or as 
part of mixtures and articles containing a chemical or mixture.

B. Proposed Amendments

    The proposed amendments were intended to clarify the description, 
scope, and definitions of the requirements for the importation of 
chemical substances, mixtures and articles containing a chemical 
substance or mixture, as well as the requirements associated with TSCA-
excluded chemicals.
    This document revises the proposed change in Sec.  12.119 regarding 
the scope of the regulation. To clarify the regulation based on the 
public comments, the term ``Chemicals not subject to TSCA'' in proposed 
Sec.  12.119(b) is changed in the final rule to ``TSCA-excluded 
chemicals''. In addition, because the proposed revision of the scope in 
Sec.  12.119(c) was confusing with respect to the application of the 
regulations to articles in Sec. Sec.  12.120 through 12.127, we are 
adding the phrase, ``if so required by the Administrator by specific 
rule under TSCA'' to Sec.  12.119(c), which mirrors the current 
language of the regulation prior to the proposed amendment.
    The final rule replaces the existing definition of the term 
``chemical substance in bulk form'' in Sec.  12.120(b) with a 
definition of ``TSCA chemical substance in bulk form'', and adds new 
definitions for the terms ``TSCA chemical substance as part of a 
mixture'' in Sec.  12.120(c) and ``TSCA-excluded chemicals'' in Sec.  
12.120(d). These definitions are revised and added to clarify that the 
certification obligations apply to both chemical substances and 
mixtures that are subject to TSCA, which require a positive 
certification, as well as those chemicals and mixtures that are not 
subject to TSCA, which require a negative certification (unless clearly 
identified as a TSCA-excluded chemical), and to ensure that terms used 
in the regulatory text are defined when necessary. ``Mixture'' is a 
statutory term in TSCA that does not apply to TSCA-excluded chemicals. 
TSCA-excluded chemicals require a negative certification whether 
imported as a single TSCA-excluded chemical mixed with other TSCA-
excluded chemicals. This document also adds a definition of the term 
``Administrator'' to mean the Administrator of the EPA, and ``covered 
commodity'' to include any merchandise that is an article, a TSCA 
chemical substance in bulk form, TSCA-excluded chemicals (as those 
terms are defined in Sec.  12.120(a), (b), or (d)), or that is a 
mixture as defined in TSCA and describe a commodity that is subject to 
actions under Sec.  12.122, et seq. and Sec.  127.28.
    In addition, in Sec. Sec.  12.122(a) and (b), 12.123(b), 12.124(a), 
12.125(b), and 127.28, this document revises references to ``chemical 
substances, mixtures, or articles'' to clarify that these regulations 
apply to TSCA chemical substances, mixtures, or articles as well as 
TSCA-excluded chemicals. In Sec.  12.124, this final rule changes the 
name of the agency from ``Customs Service'' to ``CBP''.

B. Certifications

    The final rule provides an electronic option for filing TSCA 
certifications, consistent with Executive Order (EO) 13659, 
Streamlining the Export/Import Process for America's Businesses, which 
seeks to reduce unnecessary procedural requirements relating to, among 
other things, importing into the United States, while continuing to 
protect our national security, public health and safety, the 
environment, and natural resources. See 79 FR 10657 (February 25, 
2014). The final rule is consistent with the Security and 
Accountability for Every Port Act of 2006 (``SAFE Port Act,'' 19 U.S.C. 
1411(d)) which mandates that all federal agencies that require 
documentation for clearing or licensing the importation of cargo 
participate in the International Trade Data System (ITDS) by using a 
CBP-authorized Electronic Data Interchange (EDI) system as a single 
portal for the collection and distribution

[[Page 94981]]

of standard electronic import and export data.
    In order to submit an electronic TSCA certification, importers or 
their agents are required by the final rule to submit their entry 
filings to ACE or any other CBP electronic data interchange (EDI) 
system authorized to accept entries. This document also requires in 
Sec.  12.121(a)(3) the submission of additional information relating to 
the certifying individual, including name, phone number, and email 
address for TSCA certifications submitted either in writing or 
electronically. The collection of contact information for the 
certifying individual will facilitate the resolution of issues related 
to particular shipments. This document also changes the reference to 
paragraph (a)(1) found in Sec.  12.121(c) to be a reference to 
paragraph (a).
    The final rule eliminates the blanket certification process. The 
discontinued paper-based blanket certification process had limited 
utility because each blanket certification was only valid at one port 
of entry for one year. In addition, the previous blanket certification 
process was more burdensome than the entry-specific certification 
process because it required filers to include a statement referring to 
the blanket certification and incorporate it by reference for each 
entry, as well as four data elements on the blanket certification 
itself, including product name, Harmonized Tariff Schedule of the 
United States (HTSUS) subheading number, and the name and address of 
the foreign supplier. Because the electronic TSCA certification process 
requires only a certification code, along with the name and contact 
information of the TSCA certifier, and because the paper-based blanket 
certification had limited application, we believe the elimination of 
the blanket certification process reduces the reporting burden for 
importers.

C. Notice of Exportation and Abandonment

    In addition, the final rule amends Sec. Sec.  12.125 and 12.126 to 
allow importers to provide electronic notice of exportation and 
abandonment as an alternative to the paper-based written notice process 
allowed under the existing regulations.
    The automation of these processes modernizes the way that CBP and 
EPA interact with importers of chemicals, and ensures effective 
application of regulatory controls. CBP estimates approximately 2.5 
million TSCA positive certifications and 230,000 TSCA negative 
certifications are received annually. The electronic collection of TSCA 
certifications for processing in ACE improves information access, data 
integration with CBP entry information, and the data quality of TSCA 
certifications. As a result, CBP expects improved communication among 
EPA, CBP, and importers.

D. Plain Language Revisions

    The final rule makes minor changes to Sec. Sec.  12.118-12.127 by 
removing the word ``shall'' and revising the sentence grammar to 
simplify the language. The use of ``shall'' is imprecise and outdated. 
Plain language guidance recommends replacing ``shall'' with the word 
``must,'' ``will,'' or another word that more appropriately conveys the 
intended meaning. This is part of the U.S. Government efforts to update 
regulatory text per plain language guidance.

E. Conclusion of Test to Allow Import Certification

    On February 10, 2016, CBP published a notice in the Federal 
Register (81 FR 7133) announcing that CBP was modifying the National 
Customs Automation Program (NCAP) test concerning electronic filings of 
data to ACE, known as the Partner Government Agency (PGA) Message Set 
test, to allow for the transmission of TSCA certification data. As of 
November 16, 2016, CBP has received 150,661 electronic TSCA 
certifications through ACE pursuant to the PGA Message Set Test. This 
volume of electronic submissions indicates that the PGA Message Set 
Test has been successful and reliable with regard to the electronic 
submission of TSCA certifications to ACE. Consequently, this document 
announces the conclusion of the PGA Message Set Test with regard to the 
submission of the TSCA certification. All other aspects of the PGA 
Message Set Test remain on-going until ended by announcement in a 
subsequent Federal Register notice.

Discussion of Comments

    Fourteen commenters responded to the solicitation of comments to 
the proposed rule. A description of the comments received, together 
with CBP's analysis, is set forth below.
    Comment: The trade generally argued against negative certification 
as applied to chemicals clearly labelled or identified as products that 
are excluded from TSCA regulation. The list of excluded products 
includes pesticides, food, food additives, drugs, cosmetics or devices, 
nuclear material, tobacco products, firearms and ammunition
    Multiple commenters argued that the scope of the negative 
certification in the proposed rule is too broad. One commenter noted 
that the EPA's own regulations on TSCA, found at 40 CFR 
707.20(b)(2)(ii), only require the submission of a negative 
certification where the imported chemical products are not otherwise 
clearly identified as a product not subject to TSCA. A different 
commenter stated that CBP should not require certification regarding 
chemicals that are excluded by the text of TSCA unless there was 
evidence of problems regarding the labels or other methods of 
regulating the TSCA-excluded chemicals.
    Commenters further indicated that because the proposed rule would 
affect products already regulated by other agencies, it would create 
duplicative processes and be incompatible with Executive Order (E.O.) 
13659, Streamlining the Export/Import Process for America's Businesses. 
Commenters requested that CBP work to harmonize the proposed rule with 
current and future EPA regulations, to include an exemption from the 
negative certification requirement where the imported products are 
already clearly labelled as a product that is expressly excluded by 
TSCA.
    CBP Response: CBP and EPA agree that the negative certification 
requirement need not be applied to those chemicals that are otherwise 
clearly identified as a product excluded from TSCA, which are regulated 
by other agencies or statutes, including pesticides, food, food 
additives, drugs, cosmetics, devices, tobacco, tobacco product, nuclear 
material, firearms and ammunition, as described by Sec.  3(2)(B) (ii)-
(vi) of TSCA. The requirement to file a negative certification in Sec.  
12.121(a)(2) excludes TSCA-excluded chemicals that are clearly 
identified as such. This position is consistent with EPA's TSCA section 
13 Import Policy, which addresses aspects of the CBP regulation 
implementing TSCA section 13. See 40 CFR 707.20(b)(2)(ii); 45 FR 82850 
(December 16, 1980).
    Comment: The proposed rule did not include a ``blanket 
certification'' that allowed an importer to qualify for TSCA compliance 
on reoccurring shipments of the same chemicals to the same port, with a 
one year duration. Commenters from multiple industries noted that the 
blanket certification process is useful for companies that import the 
same product to the same port repeatedly throughout a one-year period. 
Commenters requested CBP to clarify its rationale for proposing to 
discontinue the blanket certification, and further argued that a 
blanket certification process, in some

[[Page 94982]]

form, would not only benefit the trade, but would be aligned with the 
goals of E.O. 13659, i.e., by reducing costs and promoting flexibility. 
One commenter argued that the ACE system cannot be deemed to be more 
efficient without some form of blanket certification. Commenters urged 
CBP either to maintain the existing paper-based blanket certification 
process, or to develop an electronic equivalent.
    CBP Response: The reason for removing the blanket permit system is 
the difficulty of integrating that paper-based certification process, 
which required CBP to maintain files and track yearly renewals for 
verification and compliance, with an otherwise fully automated system. 
In addition, with the new requirement to submit information on the 
certifier, renewals would need to be made more frequently in order to 
keep certifier information updated. Electronic submission of TSCA 
certifications through ACE, allows for electronic releases without CBP 
manual processing or reviews.
    CBP is aware that the transition from the paper-based system with 
blanket certifications to an electronic system without blanket 
certifications may present short-term challenges for filers and 
importers. However, efforts to preserve the blanket certification 
process in combination with electronic filing though ACE would actually 
restrict the system as a whole from achieving maximum efficiency as it 
would require all filers to undergo extra steps in the PGA message set 
to input information regarding whether the importer had a blanket 
certification on file, and for which ports.
    Comment: The trade commented that the term ``non-TSCA chemical'' in 
the proposed regulation is confusing and should be replaced with the 
trade term ``chemical substances excluded from TSCA,'' because all 
chemicals are subject to TSCA unless excluded and the term ``non-TSCA'' 
is used by the trade to refer to chemicals that are subject to TSCA but 
not yet on the TSCA inventory.
    The trade also commented that the phrase ``articles containing a 
chemical substance'' is ambiguous, because it can be interpreted to 
mean an object or vessel that is used to hold a chemical substance as 
well as an object that is made up of a chemical substance. Finally, the 
trade commented that a typo appears in the definition of a ``covered 
commodity'' at Sec.  12.120(e) of the proposed rule because it claims 
``the definitions specified in paragraphs (a), (b), and (d). . .'' 
should instead be ``(a), (b), and (c). . .''
    CBP Response: To address industry's concerns about the use of the 
proposed term ``non-TSCA chemical,'' this term is being changed to 
``TSCA-excluded chemicals.'' The definition of the term ``TSCA-excluded 
chemicals'' will remain as it was under ``non-TSCA chemical,'' which is 
consistent with the appropriate provisions under TSCA.
    The phrase ``articles containing a chemical substance'' is 
consistent with the scope as provided under section 13 of TSCA. The 
term ``article'' is defined in EPA regulations, as well as in this 
rule, and has been applied in a variety of TSCA programs and activities 
for many years. The phrase ``chemical substances or mixtures as parts 
of articles'' is used in the appropriate provisions of the Sec.  12.121 
reporting requirements of this rule, and this phrase has been used in a 
variety of TSCA programs and activities, including the TSCA section 13 
import program. See, 42 FR 64572 (December 23, 1977) (noting that a 
chemical substance is considered to be imported `as part of an article' 
if the substance is not intended to be removed from that article and 
has no end use or commercial purpose separate from the article of which 
it is a part.). See also, Introduction to the Chemical Import 
Requirements of the Toxic Substances Control Act, USEPA (1999) (stating 
that chemical substances and mixtures are considered to be imported as 
part of an article only if the substances or mixtures are not intended 
to be removed/released from the article and they have no end use or 
commercial purpose separate from the article of which they are a part) 
and TSCA Chemical Data Reporting Fact Sheet: Imported Articles, USEPA 
(January 2016).
    Section 12.120(e) of the proposed rule does not contain a 
typographical error. Paragraph (c) is not needed, because a ``covered 
commodity'' includes ``mixtures,'' including a chemical substance that 
is part of the mixture. The term ``covered commodity'' is used to cover 
all things covered by the rule, including chemicals not subject to 
TSCA, which would require either a negative certification or proper 
identification. It is important that the term ``covered commodity'' 
cover things not subject to TSCA, given that, for example, CBP can 
detain shipments that do not have a required negative certification. 
See 19 CFR 12.122(b)(3).
    Comment: The proposed rule required an importer to indicate, for 
each entry subject to either a positive or negative certification 
requirement, the name, phone number and email address of the person who 
provided the certification, in writing or electronically through the 
ACE system.
    Multiple commenters indicated that if such a requirement becomes 
part of the final rule, it should only be required at the header level 
rather than at each line entry. Commenters argued that this would be 
important for two reasons: to avoid imposing a repetitive manual task 
of re-inputting the same information for hundreds of lines; and to help 
importers meet their requirements to keep submissions under the 8 MB 
file size limitation.
    One commenter stated that the provision of contact information for 
the certifier should be optional, expressing doubt as to the usefulness 
of such requirement given that the customs broker has historically 
served as the point of contact for any CBP or PGA inquiry. A separate 
commenter questioned the underlying intent for this requirement, 
requesting clarification as to whether it was intended to provide 
contact information in the event of a spill or emergency (in which case 
the commenter argued that the Material Safety Data Sheet already 
provides this information), or whether there would be legal 
ramifications imposed on the person providing the certification.
    CBP Response: CBP and EPA need the identifying information so that 
they can contact the certifying individual when there is a question 
about the imported article, and for enforcement purposes. The 
certifying individual contact information is required to know who is 
certifying and whom to contact if needed. CBP and EPA acknowledge that 
this requirement may create additional clerical work for filers. 
However, ACE will allow the requested information to be entered once at 
the header level using the PG00 record within the PGA Message Set, and 
then populated under each entry line where specified. In addition, the 
new process will result in faster cargo clearance. CBP and EPA 
encourage filers who have importers with routine imports with the same 
certifying individual information to explore options with third-party 
software vendors to take advantage of existing technology.
    Comment: Commenters requested information regarding how CBP and EPA 
will treat confidential business information (CBI) collected under the 
process outlined in the proposed rule, including: where the data will 
be stored, how the data will be protected, how long the data will be 
retained, and who will have access to the data.
    CBP Response: Access to nonpublic data contained in the ACE system 
will be limited to CBP officers and relevant personnel at CBP 
headquarters, as well

[[Page 94983]]

as limited personnel at partner government agencies. In addition, 
access to ACE data including Confidential Business Information (CBI) is 
limited to personnel with the appropriate roles and permissions and is 
managed by various audit controls on a continual basis.
    Comment: Commenters expressed concern regarding what was alleged to 
be broadening of the scope of EPA authority under 19 CFR 12.120 to 
12.127, by amending Sec.  12.119 to cover ``articles containing a 
chemical substance or mixture.'' In contrast, the language of Sec.  
12.119 prior to amendment limits the scope of application to ``articles 
containing a chemical substance or mixture if so required by the 
Administrator by specific rule under TSCA.'' Commenters asked CBP to 
clarify what would be required under the revised rule, including the 
types of articles that would be subject to the different requirements.
    CBP Response: Given the concerns expressed by the commenters, and 
CBP's desire to provide unambiguous authority to submit TSCA 
certification elements for imports electronically through the ITDS 
system, CBP is revising the language proposed for Sec.  12.119 in order 
to maintain the scope provided for in the existing Sec.  12.119, as 
applied to articles. CBP will, however, make stylistic changes to 19 
CFR 12.119 in order to provide clarity as to which chemicals the 
certification requirement will not apply (i.e., TSCA-excluded 
chemicals). The final rule continues to provide that the regulation 
applies to ``articles containing a chemical substance or mixture if so 
required by the Administrator by specific rule under TSCA.'' CBP will 
continue to consider whether other changes to the scope of the rule are 
needed, and may revisit the issue in a future rulemaking.
    Comment: One commenter argued that the final regulation 
implementing the Formaldehyde Emission Standards for Composite Wood 
Products Act of 2010, which lifts the article exemption for regulated 
composite wood products, would be impacted by the proposed rule by 
creating an identification burden on CBP and a compliance burden on the 
trade for determining regulated items and requirements. The trade 
stated that clear guidance and training should be available in order to 
avoid confusion.
    CBP Response: Under the final rule, there should be no impact on 
the EPA's efforts to implement regulations under the Formaldehyde 
Emission Standards for Composite Wood Products Act of 2010. In order to 
ensure that the trade has time to adjust and understand the 
requirements, the prepublication version of the Formaldehyde Emission 
Standards for Composite Wood Products final rule provides that the 
compliance date regarding the import certification requirements of that 
rule will be delayed two years from publication of that rule. During 
this period, the EPA may conduct outreach with regulated parties and 
industry associations in order to familiarize the supply chain with the 
importer provisions. However, it is the importer's responsibility to 
determine whether the shipment is in compliance with a particular 
regulation is properly identified accordingly.
    Comment: One commenter commented in reference to various policy 
issues regarding how the current Foreign Trade Zone (FTZ) system of 
filing and reporting will be adapted to the proposed rule. In short, 
the commenter does not think that TSCA certification requirements 
should be applied at the time of admission into the FTZ, but rather 
when the goods leave the FTZ and enter the stream of commerce. The 
commenter also noted that a ``Dual Option'' model whereby importers 
could file PGA data in weekly entry summaries for all FTZ related 
imports, but would provide PGA data on non-FTZ imports at the time of 
cargo release. In addition, the commenter seeks confirmation that the 
current manual Notice of Arrival mechanism will be preserved in ACE.
    CBP Response: CBP notes that the importer is only required to make 
a good faith estimate when making entry of the merchandise, including 
the TSCA certifications thereof, when it files the weekly FTZ entry 
estimate pursuant to Sec.  146.63(c)(1). CBP is aware that under this 
process, there may be occasions where a TSCA negative certification is 
issued by the importer in the weekly estimate, and yet the weekly 
summary reflects that TSCA chemical substances were in fact imported. 
CBP and EPA will address importers that demonstrate systematic or 
egregious discrepancies between weekly estimates and weekly summaries 
on a case-by-case basis and through available enforcement and 
compliance practices.
    Current regulations provide for filing of the Notice of Arrival 
(NOA) with entry documentation. The proposed electronic implementation 
maintains that possibility. CBP is working to build functionality for 
the submission of PGA message set elements as merchandise is admitted 
to the FTZ through the e-214 process. At that time, there may be a 
consideration of whether the NOA is more appropriately filed at time of 
admission into a Foreign Trade Zone.
    Comment: Commenters noted that the proposed rule fails to identify 
the certification requirements and other compliance measures required 
for imports that enter through either the informal entry process, or 
Section 321. Commenters indicated that given the increased value 
threshold to $800, there will likely be an increase in the number of 
imports that attempt to enter under Section 321, and thus, CBP needs to 
provide guidance to the trade as to how it will address TSCA 
certification, either positive or negative, for imports that enter 
under Section 321. Commenters argued that both the statutory language 
and the regulations implementing the TSCA clearly indicate that the law 
applies to all chemical products entering the United States, not just 
those in excess of $800 in value.
    CBP Response: The recent amendments to Section 321 did not change 
the PGA data requirements, only the value of the shipments that qualify 
for entry free of duty and taxes. Thus, if TSCA import certification 
compliance was previously required for imports valued $200 or less, it 
will also be required when imports are valued $800 or less under the 
amended Section 321. CBP is considering options to address the broader 
question of how importers can best provide the appropriate PGA data, 
including TSCA certification, for imports that qualify under Section 
321.

Conclusion

    Accordingly, after review of the comments and further 
consideration, CBP has decided to adopt as final the proposed rule 
published in the Federal Register (81 FR 59157) on August 29, 2016, 
with the changes described above.

III. Estimated Costs and Benefits of This Rule

A. Costs

    The costs for the regulated community to implement TSCA 
certification via this final rule would be minimal. CBP and EPA 
estimate that providing the name, phone number, and email address of 
the import certifier would result in a net increase in information 
collection burden of three minutes for each of the estimated 2.5 
million TSCA positive certifications and 230,000 TSCA negative 
certifications (at a cost of about $3 per certification and assuming no 
filer takes advantage of the possibility of filing this address 
information at the header level, as noted above), yielding an annual 
maximum increased cost to filers of $8.41 million.

[[Page 94984]]

B. Executive Orders 12866 and 13563

    Executive Orders 13563 and 12866 direct agencies to assess the 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, of reducing costs, of harmonizing rules, and of promoting 
flexibility. This final rule is not a ``significant regulatory 
action,'' under section 3(f) of Executive Order 12866. Accordingly, OMB 
has not reviewed this regulation. An Economic Analysis for this action, 
which is contained in a document entitled ``Economic Analysis for 
Custom and Border Protection (CBP) Final Rule on TSCA Import 
Certifications in ACE/ITDS,'' is available in the docket for this 
rulemaking and is summarized in the previous section of this document.

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) of 1980 (5 U.S.C. 601 et seq.) 
requires federal agencies to assess the effects of regulations on small 
entities, including businesses, nonprofit organizations, and 
governments, and--in some instances--to examine alternatives to the 
regulations that may reduce adverse economic effects on significantly 
impacted small entities. Section 604 of the RFA, as amended by the 
Small Business Regulatory Enforcement Fairness Act (SBREFA) of 1996, 
requires an agency to perform a regulatory flexibility analysis for a 
rule unless the agency certifies under section 605(b) that the 
regulatory action would not have a significant (economic) impact on a 
substantial number of small entities. The RFA does not specifically 
define ``a significant economic impact on a substantial number'' of 
small entities.
    A small entity analysis (SEA) was conducted and summarized herein. 
The SEA consists of: two quantitative analyses of impacts of the final 
rule on small entities for TSCA positive certifications, a qualitative 
discussion of impacts for TSCA negative certifications, and an 
integrative analysis of the combined universe of TSCA positive and TSCA 
negative certifications (all entities affected by the rule). These 
analyses provide information on the magnitude and extent of cost 
impacts for the purpose of supporting a CBP certification that the 
final rule would not result in significant (economic) impact on a 
substantial number of small entities. For additional details, see the 
Economic Analysis for this action, which is contained in a document 
entitled ``Economic Analysis for Customs and Border Protection (CBP) 
Final Rule on TSCA Import Certifications in ACE/ITDS,'' and is 
available in the docket for this rulemaking.
    For TSCA positive certifications, the first quantitative analysis 
is a screening analysis of cost impacts to the smallest entities 
associated with TSCA positive certifications; and the second, a more 
detailed distributional analysis of impacts associated with TSCA 
positive certifications. These analyses use cost impact percentages to 
measure potential impacts on small parent entities affected by the 
final rule. The cost impact percentage is defined as annualized 
compliance costs resulting from the TSCA positive certification portion 
of the final rule as a percentage of annual revenues or sales, a 
commonly available and objective measure of a company's business 
volume. As is the expected case for this rule, when increases in 
regulatory costs are minimal, they represent a small fraction of a 
typical entity's revenue, and therefore the impacts of the regulation 
are minimal.
    The first quantitative analysis for TSCA positive certifications is 
a screening analysis that provides a concise estimate of small entity 
impacts under the final rule by examining whether an ``average small 
parent entity'' incurs significant economic impact. The results of this 
analysis are presented in Table 1. The second quantitative analysis is 
a detailed distributional analysis that provides an estimate of small 
entity impacts under the assumption that affected entities have the 
same size characteristics as the overall industry sector. The results 
of this analysis are presented in Table 2.

                                       Table 1--TSCA Positive Certification Summary of Screening Analysis Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Parent entities with 0 to 4 employees                          All small parent entities
                        NAICS Code      ----------------------------------------------------------------------------------------------------------------
      NAICS            description           Average                                                  Average
                                             revenue          1% Impact            3% Impact          revenue          1% Impact           3% Impact
--------------------------------------------------------------------------------------------------------------------------------------------------------
325 \a\.........  Chemical                   $1,457,186  No.................  No................     $80,841,890  No................  No.
                   Manufacturing.
324 \b\.........  Petroleum and Coal         $2,120,398  No.................  No................    $556,652,918  No................  No.
                   Products
                   Manufacturing.
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ For NAICS 325, the analysis of parent entities with 0 to 4 employees include 3,261 businesses while the analysis of all parent entities includes
  9,772 businesses.
\b\ For NAICS 324, the analysis of parent entities with 0 to 4 employees include 391 businesses while the analysis of all parent entities includes 1,189
  businesses.


                                    Table 2--TSCA Positive Certification Summary of Detailed Distributional Analysis
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                    Number and percent of small parent
                                                               Parent     Small        entities incurring impact of       Minimum      Mean     Maximum
           NAICS                NAICS Code  description       entities    parent  --------------------------------------   impact     impact     impact
                                                                         entities        <1%          1-3%       >3%      \a\ (%)    \b\ (%)    \c\ (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
325.......................  Chemical Manufacturing.........     11,175     11,175   11,175 (100%)     0 (0%)     0 (0%)     <0.001      0.015      0.032
324.......................  Petroleum and Coal Products          3,657      3,657    3,657 (100%)     0 (0%)     0 (0%)     <0.001      0.009      0.022
                             Manufacturing.
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ Of the 11,175 small entities in NAICS 325, the minimum impact experienced by any entity was <0.001%. Of the 3.657 small entities in NAICS 324, the
  minimum impact experienced by any entity was <0.001%.
\b\ Of the 11,175 small entities in NAICS 325, the mean impact experienced by any entity was 0.015%. Of the 3.657 small entities in NAICS 324, the mean
  impact experienced by any entity was 0.009%.
\c\ Of the 11,175 small entities in NAICS 325, the maximum impact experienced by any entity was 0.032%. Of the 3.657 small entities in NAICS 324, the
  maximum impact experienced by any entity was 0.022%.


[[Page 94985]]

    The small entity screening analysis for TSCA positive 
certifications demonstrates that no small entities are expected to 
incur impacts of one percent or greater. The detailed distributional 
analysis for TSCA positive certifications shows that while a large 
number of small entities in certain sectors may be affected by the 
final rule, all of these small entities are expected to incur impacts 
of considerably less than one percent.
    For TSCA negative certifications, because the unit incremental 
steady state burden associated with positive and negative certification 
are virtually the same (2.93 versus 2.98 minutes, respectively), the 
small entity impacts associated with negative certifications are 
similar to the small entity impacts associated with positive 
certifications, and are considerably less than one percent.
    Integrating the above information for all firms submitting TSCA 
positive certifications and/or TSCA negative certifications requires 
consideration of the degree to which the firms submitting each type of 
certification overlap. Since this detailed information is not readily 
available, an assessment is made via review of lower-bound and upper-
bound impact scenarios. At the lower bound with an assumption of no 
overlap, firms submitting TSCA positive and TSCA negative 
certifications are completely isolated and separate. Each firm incurs 
about three minutes additional burden per certification with associated 
impacts of less than one percent, yielding overall impacts of less than 
one percent for all firms. In the upper-bound scenario, with an 
assumption that all firms overlap, firms submit both TSCA positive and 
negative certifications at the same transaction rates per firm for each 
type of certification. All firms incur twice the burden due to managing 
twice as many certifications (i.e., in comparison to three minutes per 
certification, the ``double duty'' requires six minutes for one 
positive certification plus one negative certification). Nonetheless, 
the associated overall impacts are still less than one percent for all 
firms.
    Per conventional practices including EPA guidance, even if a 
substantial number of entities are affected by a final rule, as long as 
the impact to these entities is very low, the rule can be determined to 
not result in a significant impact on a substantial number of small 
entities. Based on the evidence of the analyses summarized above, CBP 
certifies that this final rule will not have a significant economic 
impact on a substantial number of small entities.

D. Paperwork Reduction Act

    As this rule does not establish a new collection of information, as 
defined in the Paperwork Reduction Act of 1995 (44 U.S.C. 3507), the 
provisions of the Paperwork Reduction Act are inapplicable.

E. Unfunded Mandates Reform Act (UMRA)

    This rule will not result in the expenditure by State, local, and 
tribal governments, in the aggregate, or by the private sector, of $100 
million or more in any one year, and it will not significantly or 
uniquely affect small governments. Therefore, no actions are necessary 
under the provisions of the Unfunded Mandates Reform Act of 1995.

F. Signing Authority

    This proposed regulation is being issued in accordance with 19 CFR 
0.1(a)(1) pertaining to the authority of the Secretary of the Treasury 
(or that of his or her delegate) to approve regulations pertaining to 
certain customs revenue functions.

List of Subjects

19 CFR Part 12

    Customs duties and inspection, Entry of merchandise, Imports, 
Reporting and recordkeeping requirements.

19 CFR Part 127

    Customs duties and inspection, Exports, Freight, Reporting and 
recordkeeping requirements.

Amendments to the CBP Regulations

    For the reasons set forth above, parts 12 and 127 of the Code of 
Federal Regulations (19 CFR parts 12 and 127) are amended as follows:

PART 12--SPECIAL CLASSES OF MERCHANDISE

0
1. The general and specific authority citations for part 12 continue to 
read as follows:

    Authority:  5 U.S.C. 301; 19 U.S.C. 66, 1202 (General Note 3(i), 
Harmonized Tariff Schedule of the United States (HTSUS)), 1624.
* * * * *
    Sections 12.118 through 12.127 also issued under 15 U.S.C. 2601 
et seq.
* * * * *

0
2. Revise Sec.  12.118 to read as follows:


Sec.  12.118   Toxic Substances Control Act.

    The Toxic Substances Control Act (``TSCA'') (15 U.S.C. 2601 et 
seq.) governs the importation into the customs territory of the United 
States of a chemical substance in bulk form or as part of a mixture, 
and articles containing a chemical substance or mixture. Such 
importations are also governed by these regulations which are issued 
under the authority of section 13(b) of TSCA (15 U.S.C. 2612(b)).

0
3. Revise Sec.  12.119 to read as follows:


Sec.  12.119   Scope.

    Sections 12.120 through 12.127 apply to the importation into the 
customs territory of the United States of:
    (a) Chemical substances in bulk form and as part of a mixture under 
TSCA;
    (b) TSCA-excluded chemicals; and
    (c) Articles containing a chemical substance or mixture if so 
required by the Administrator by specific rule under TSCA.

0
4. In Sec.  12.120, revise paragraph (b) and add paragraphs (c) through 
(f) to read as follows:


Sec.  12.120   Definitions.

* * * * *
    (b) TSCA chemical substance in bulk form. ``TSCA chemical substance 
in bulk form'' means a chemical substance as set forth in section 3(2) 
of TSCA, (15 U.S.C. 2602(2)) (other than as part of an article) in 
containers used for purposes of transportation or containment, provided 
that the chemical substance is intended to be removed from the 
container and has an end use or commercial purpose separate from the 
container.
    (c) TSCA chemical substance as part of a mixture. ``TSCA chemical 
substance as part of a mixture'' means a chemical substance as set 
forth in section 3(2) of TSCA, (15 U.S.C. 2602(2)) that is part of a 
combination of two or more chemical substances as set forth in section 
3(10) of TSCA.
    (d) TSCA-excluded chemicals. ``TSCA-excluded chemicals'' means any 
chemicals that are excluded from the definition of TSCA chemical 
substance by section 3(2)(B) (ii)-(vi) of TSCA, (15 U.S.C. 2602(2) (B) 
(ii)-(vi)) (other than as part of a mixture), regardless of form.
    (e) Covered commodity. ``Covered commodity'' means merchandise that 
meets the terms of one of the definitions specified in paragraph (a), 
(b), or (d) of this section or that is a mixture as defined in TSCA.
    (f) Administrator. ``Administrator'' means the Administrator of the 
Environmental Protection Agency (EPA).

0
5. Revise Sec.  12.121 to read as follows:


Sec.  12.121   Reporting requirements.

    (a) Certification required. (1) The importer or the authorized 
agent of such an importer of a TSCA chemical

[[Page 94986]]

substance in bulk form or as part of a mixture, must certify in writing 
or electronically that the chemical shipment complies with all 
applicable rules and orders under TSCA by filing with CBP the following 
statement:

    I certify that all chemical substances in this shipment comply 
with all applicable rules or orders under TSCA and that I am not 
offering a chemical substance for entry in violation of TSCA or any 
applicable rule or order thereunder.

    (2) The importer or the authorized agent of such an importer of any 
TSCA-excluded chemical not clearly identified as such must certify in 
writing or electronically that the chemical shipment is not subject to 
TSCA by filing with CBP the following statement:

    I certify that all chemicals in this shipment are not subject to 
TSCA.
    (3) Filing of certification. (i) The appropriate certification 
required under paragraph (a) of this section must be filed with the 
director of the port of entry in writing or electronically to the 
Automated Commercial Environment (ACE) system or any other CBP-
authorized EDI system prior to release of the shipment. For each entry 
subject to certification under paragraph (a), the name, phone number, 
and email address of the certifier (the importer or the importer's 
authorized agent) shall be included.
    (ii) Written certifications must appear as a typed or stamped 
statement:
    (A) On an appropriate entry document or commercial invoice or on an 
attachment to that entry document or invoice; or
    (B) In the event of release under a special permit for an immediate 
delivery as provided for in Sec.  142.21 of this chapter or in the case 
of an entry as provided for in Sec.  142.3 of this chapter, on the 
commercial invoice or on an attachment to that invoice.
    (b) TSCA chemical substances or mixtures as parts of articles. An 
importer of a TSCA chemical substance or mixture as part of an article 
must comply with the certification requirements set forth in paragraph 
(a) of this section only if required to do so by a rule or order issued 
under TSCA.
    (c) Facsimile signatures. The certification statements required 
under paragraph (a) of this section may be signed by means of an 
authorized facsimile signature.


Sec.  12.122   [Amended]

0
6. Amend Sec.  12.122 by removing the word ``shall'' each place it 
appears and adding in its place the word ``will'' and in paragraphs (a) 
introductory text and (b) introductory text by removing the words 
``chemical substances, mixtures, or articles'' and adding in their 
place the words ``covered commodity''.


Sec.  12.123   [Amended]

0
7. Amend Sec.  12.123 by removing the word ``shall'' each place it 
appears and adding in its place the word ``will'' and in paragraph (b), 
third sentence, by removing the words ``chemical substance, mixture, or 
article'' and adding in their place the words ``a covered commodity''.


Sec.  12.124   [Amended]

0
8. Amend Sec.  12.124 as follows:
0
a. In paragraph (a) by removing the words ``chemical substances, 
mixtures, or articles'' and adding in their place the words ``a covered 
commodity''.
0
b. In paragraph (a) by removing the word ``shall'' and adding in its 
place the word ``must''.
0
c. In paragraph (b) introductory text by removing the words ``Customs 
Service'' and adding in its place the word ``CBP''.

0
9. The introductory text of Sec.  12.125 is revised and in paragraph 
(b) the words ``chemical substances, mixtures, or articles'' are 
removed and the words ``covered commodity'' are added in their place.
    The revision reads as follows:


Sec.  12.125   Notice of exportation.

    Whenever the Administrator directs the port director to refuse 
entry under Sec.  12.123 and the importer exports the non-complying 
shipment within the 30 day period of notice of refusal of entry or 
within 90 days of demand for redelivery, the importer must submit 
notice of the exportation either in writing to the port director or 
electronically to ACE or any other CBP-authorized EDI system. The 
importer must include the following information in the notice of 
exportation:
* * * * *

0
10. Revise Sec.  12.126 to read as follows:


Sec.  12.126   Notice of abandonment.

    If the importer intends to abandon the shipment after receiving 
notice of refusal of entry, the importer must present a notice of 
intent to abandon in writing to the port director or electronically to 
ACE or any other CBP-authorized EDI system. Notification under this 
section is a waiver of any right to export the merchandise. The 
importer will remain liable for any expense incurred in the storage 
and/or disposal of abandoned merchandise.

0
11. Revise Sec.  12.127 to read as follows:


Sec.  12.127   Decision to store or dispose.

    A shipment detained under Sec.  12.122 will be considered to be 
unclaimed or abandoned and will be turned over to the Administrator for 
storage or disposition as provided for in Sec.  127.28(i) of this 
chapter if the importer has not brought the shipment into compliance 
with TSCA and has not exported the shipment within the time limitations 
or extensions specified according to Sec.  12.124. The importer will 
remain liable for any expense in the storage and/or disposal of 
abandoned merchandise.

PART 127--GENERAL ORDER, UNCLAIMED, AND ABANDONED MERCHANDISE

0
12. The general and specific authority citations for part 127 continue 
to read as follows:

    Authority:  19 U.S.C. 66, 1311, 1312, 1484, 1485, 1490, 1491, 
1492, 1493, 1506, 1559, 1563, 1623, 1624, 1646a; 26 U.S.C. 5753.
* * * * *
    Section 127.28 also issued under 15 U.S.C. 2612, 26 U.S.C. 5688;
* * * * *

0
13. Amend Sec.  127.28 by revising paragraph (i) to read as follows:


Sec.  127.28   Special merchandise.

* * * * *
    (i) Good subject to TSCA Requirements. A good subject to TSCA 
requirements, i.e., a covered commodity as defined in section 12.120 of 
this chapter, will be inspected by a representative of the 
Environmental Protection Agency to ascertain whether it complies with 
the Toxic Substances Control Act and the regulations and orders issued 
thereunder. If found not to comply with these requirements that good 
must be exported or otherwise disposed of immediately in accordance 
with the provisions of Sec. Sec.  12.125 through 12.127 of this 
chapter.

R. Gil Kerlikowske,
Commissioner, U.S. Customs and Border Protection.
    Approved: December 20, 2016.
Timothy E. Skud,
Deputy Assistant Secretary of the Treasury.
[FR Doc. 2016-31055 Filed 12-23-16; 8:45 am]
 BILLING CODE 9111-14-P