[Federal Register Volume 63, Number 149 (Tuesday, August 4, 1998)]
[Rules and Regulations]
[Pages 41626-41651]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-20150]
[[Page 41625]]
_______________________________________________________________________
Part II
Environmental Protection Agency
_______________________________________________________________________
40 CFR Part 82
Protection of Stratospheric Ozone: Reconsideration of Petition Criteria
and Incorporation of Montreal Protocol Decisions; Direct Final Rule and
Proposed Rule
Federal Register / Vol. 63, No. 149 / Tuesday, August 4, 1998 / Rules
and Regulations
[[Page 41626]]
ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 82
[FRL-6129-2]
RIN 2060-AG48
Protection of Stratospheric Ozone: Reconsideration of Petition
Criteria and Incorporation of Montreal Protocol Decisions
AGENCY: Environmental Protection Agency (EPA).
ACTION: Direct final rule.
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SUMMARY: With this action, EPA is revising the accelerated phaseout
regulation that governs the production, import, export, transformation
and destruction of substances that deplete the ozone layer under the
authority of Sections 602, 604, 605, 606, and 614 of Title VI of the
Clean Air Act Amendments of 1990 (CAA or the Act). Today's amendments
reflect changes in U.S. obligations under the Montreal Protocol on
Substances that Deplete the Ozone Layer (Protocol) due to recent
amendments and decisions by signatory countries to this international
agreement. Additionally, in response to a petition submitted to EPA,
the Agency is removing the requirement in the petition process for
imports of used class I controlled substances that a person must
certify knowledge of tax liability. Other amendments are designed to
ease the burden on affected companies while continuing to ensure
compliance with Title VI of the CAA and meet U.S. obligations under the
Protocol.
DATES: This rule will become effective October 5, 1998 without further
notice unless the Agency receives relevant adverse comment by September
3, 1998. Should the agency receive such comments, it will publish a
timely withdrawal informing the public that this rule will not take
effect. If a public hearing is requested, the comment period will end
30 days after the date of the public hearing, in which case, EPA will
publish a document in the Federal Register announcing the hearing
information and the extended comment period.
ADDRESSES: Comments on this rulemaking should be submitted in duplicate
(two copies) to: Air Docket No. A-92-13, U.S. Environmental Protection
Agency, 401 M Street, SW, Room M-1500, Washington, DC 20460. Inquiries
regarding a public hearing should be directed to the Stratospheric
Ozone Protection Hotline at 1-800-269-1996.
Materials relevant to this rulemaking are contained in Docket No.
A-92-13. The Docket is located in room M-1500, First Floor, Waterside
Mall at the address above. The materials may be inspected from 8 a.m.
until 4 p.m. Monday through Friday. A reasonable fee may be charged by
EPA for copying docket materials.
FOR FURTHER INFORMATION CONTACT: Tom Land, U.S. Environmental
Protection Agency, Stratospheric Protection Division, Office of
Atmospheric Programs, 6205J, 401 M Street, SW., Washington, DC 20460,
202-564-9185.
SUPPLEMENTARY INFORMATION: The EPA is revising the accelerated phaseout
regulation as a direct final rule without prior proposal because the
Agency views these revisions as noncontroversial and anticipates no
relevant adverse comments. The EPA is also publishing a companion
proposed rule to this direct final rule in this issue of the Federal
Register to serve as the proposal should adverse comments be filed on
provisions of the direct final rule. Should the Agency receive relevant
adverse comment on the direct final rule, it will publish a timely
withdrawal informing the public that the rule will not take effect. The
EPA will not institute a second comment period on this rule. Any
parties interested in commenting on these revisions to 40 CFR part 82,
subpart A should do so at this time.
Relevant adverse comment will be addressed in a subsequent final
rulemaking document.
Table of Contents
I. Background
II. Revisions to the Stratospheric Ozone Protection Program
A. Amendments to Sec. 82.3--Definitions
1. Adding a Definition for the Term ``Confer'' that Pertains to
Essential-Use Allowances
2. Adding Destruction Technologies to the List of Those Approved
in the Definition of Destruction
3. Simplifying the Definition of ``Importer''
4. Adding a Definition for the Phrase ``Source Facility'' that
Pertains to the Petition Process for Imports of Used Controlled
Substances
5. Clarifying the Definition of Transhipment
B. Amendments to Sec. 82.4--Prohibitions
1. Licensing System for Imports and Exports of Listed Controlled
Substances--both Newly Manufactured and Previously Used
2. Control of Exported Products that Rely on Class I Controlled
Substances for their Continuing Functioning to Article 5 Parties
3. Prohibit Imports and Exports of HBFCs from or to Non-Parties
to the Protocol
4. Application Process for Exemptions to the HCFC Phaseout for
Specific National Security Uses
5. Simplify Procedure for Apportioning Essential-Use Allowances
and Essential-Use Exemptions through a Notice
6. Prohibit Import of Class I Controlled Substances for
Essential-Uses Except by Companies Allocated Essential-Use
Allowances
C. Amendments to Sec. 82.9--Availability of Production
Allowances in Addition to Baseline Production Allowances
1. Clarification of Increases or Decreases of Article 5
Allowances due to International Transfers
D. Amendments to Sec. 82.12--Transfers
1. Increases or Decreases of Essential-Use Allowances due to
Emergency International Transfers
E. Amendments to Sec. 82.13--Recordkeeping and Reporting
Requirements
1. Removal of Producer Requirement to Report the Quantity of
Used Material Received that Contains Recycled or Reclaimed
Controlled Substances
2. Add to the Producer Recordkeeping and Reporting Requirements
the Need to Maintain and Submit a Certification that a Quantity of
Class I Controlled Substance will be used as a Process Agent.
3. Clarify the Need for Letters that Confer Essential-Use
Allowances and Destruction and Transformation Credits to Producers
and that these Letters be Submitted with Producer's Quarterly
Reports
4. Changes to the Petition Process for Importing Used Class I
Controlled Substances
a. Clarification that a Petition to Import Used Class I
Controlled Substances is Submitted for One Individual Shipment
b. Changing the de minimis Quantity for an Individual Shipment
for which a Person is Required to Submit a Petition to Import Used
Class I Controlled Substances
c. Revised and Expanded Information Requirements for a Petition
to Import Used Class I Controlled Substances
d. Removal of the Information Requirement regarding the Tax for
People Petitioning to Import Used Class I Controlled Substances
e. Clarification of the Timing for EPA Review of a Petition
f. Clarification of Reasons for Disallowing Petitions to Import
Used Class I Controlled Substances
g. Requirement that the Petition and the Non-Objection Letter
from EPA for the Import of Used Class I Controlled Substances
Accompany the Shipment through U.S. Customs Clearance
5. Requirement that Importers of Controlled Substances and Used
Controlled Substances use the Harmonized Commodity Codes in this
Regulation in completing Customs Entry Documents
6. Modify the Requirement for a Sales Contract that Certifies
Exported Controlled Substances will be Transformed or Destroyed
[[Page 41627]]
7. Applying the Recordkeeping and Reporting Requirements to
Material obtained from Importers as well as Producers for a Person
that Transforms or Destroys Class I Controlled Substances
8. Changes to the Recordkeeping and Reporting Requirements for
Entities Allocated Essential-Use Allowances
9. Changes to the Reporting Requirement for Distributors of
Laboratory Supplies under the Global Laboratory Essential Use
Exemption
III. Miscellaneous Additional Changes
IV. Summary of Supporting Analysis
A. Unfunded Mandates Reform Act
B. Regulatory Flexibility
C. Executive Order 12866
D. Applicability of E.O. 13045--Children's Health Protection
E. Paperwork Reduction Act
F. Executive Order 12875
G. Submission to Congress and the General Accounting Office
I. Background
The current regulatory requirements of the Stratospheric Ozone
Protection Program that limit production and consumption of ozone-
depleting substances were promulgated by the Environmental Protection
Agency (EPA or the Agency) in the Federal Register on May 10, 1995 (60
FR 24970) and on December 20, 1994 (59 FR 65478). The regulatory
program was originally published in the Federal Register on August 12,
1988 (53 FR 30566), in response to the 1987 signing of the Montreal
Protocol on Substances that Deplete the Ozone Layer
(Protocol).1 The U.S. was one of the original signatories to
the 1987 Montreal Protocol and the U.S. ratified the Protocol on April
4, 1988. Congress then enacted, and President Bush signed into law, the
Clean Air Act Amendments of 1990 (CAA or the Act) that included Title
VI on Stratospheric Ozone Protection. Today's actions amend the
existing EPA regulations published under Sections 604, 605, 606 and 614
of the CAA governing the production and consumption of ozone-depleting
substances. Today's amendments are designed to ensure the U.S. meets
its obligations under the Protocol and the CAA.
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\1\ Several revisions to the original 1988 rule were issued on
the following dates: February 9, 1989 (54 FR 6376), April 3, 1989
(54 FR 13502), July 5, 1989 (54 FR 28062), July 12, 1989 (54 FR
29337), February 13, 1990 (55 FR 5005), June 15, 1990 (55 FR 24490)
and June 22, 1990 (55 FR 25812) July 30, 1992 (57 FR 33754), and
December 10, 1993 (58 FR 65018).
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EPA derives its authority for today's action from sections 602,
604, 605, 606, and 614 of the CAA. Many of today's changes are made to
reflect adjustments or amendments to the Protocol or decisions taken by
the Parties to the Protocol at their meetings from 1995 through 1997.
EPA is acting in accordance with section 614 of the CAA in amending the
regulations to reflect these changes. Section 614 of the CAA states
that Title VI of the Act ``shall be construed, interpreted, and applied
as a supplement to the terms and conditions of the Montreal Protocol,
as provided in Article 2, paragraph 11 thereof, and shall not be
construed, interpreted, or applied to abrogate the responsibilities of
obligations of the United States to implement fully the provisions of
the Montreal Protocol. In the case of conflict between any provision of
[Title VI of the CAA] and any provision of the Montreal Protocol, the
more stringent provision shall govern.'' Section 606 of the CAA allows
EPA to accelerate the phaseout schedules found in sections 604 and 605
of the Act.
Today's action adjusts the regulatory framework promulgated under
section 606, while retaining the accelerated phaseout dates. The
changes in today's action are made to close loopholes in existing
regulatory language, to ease the burden on the regulated community, to
clarify existing requirements and to lessen EPA's administrative burden
in implementing the Allowance Program (the Program).
The requirements contained in the final rules published in the
Federal Register on May 10, 1995 and December 20, 1994 establish an
Allowance Program. The Program and its history are described in the
notice of proposed rulemaking (NPRM) published in the Federal Register
on November 10, 1994 (59 FR 56276). The control and the phaseout of
production and consumption of ozone-depleting substances as required
under the Protocol and CAA are accomplished through the Allowance
Program.
In developing the Allowance Program, EPA collected information on
the amounts of ozone-depleting substances produced, imported, exported,
transformed and destroyed within the United States for specific
baseline years for specific chemicals. This information was used to
establish the U.S. production and consumption ceilings for these
chemicals. The data were also used to assign company-specific
production and import rights to companies that were in most cases
producing or importing during the specific year of data collection.
These production or import rights are called ``allowances.'' Due to the
complete phaseout of many of the ozone-depleting chemicals, the
quantities of production allowances and consumption allowances granted
to companies for those chemicals were gradually reduced and eventually
eliminated. Production allowances and consumption allowances continue
to exist for only one specific class I controlled ozone-depleting
substance--methyl bromide. All other production or consumption of class
I controlled substances is prohibited under the Protocol and the CAA,
but for a few narrow exemptions.
In the context of the regulatory program, the use of the term
consumption may be misleading. Consumption does not mean the ``use'' of
a controlled substance, but rather is defined as production plus
imports minus export of controlled substances (Article 1 of the
Protocol and Section 601 of the CAA). Class I controlled substances
that were produced or imported through the expenditure of allowances
prior to their phaseout date can continue to be used by industry and
the public after that specific chemical's phaseout under these
regulations, unless otherwise precluded under separate regulations.
The specific names and chemical formulas for the controlled ozone-
depleting substances in the Groups of class I controlled substances are
in Appendix A and Appendix F in Subpart A of 40 CFR part 82. The
specific names and chemical formulas for the class II controlled ozone-
depleting substances are in Appendix B and Appendix F in Subpart A.
Although the regulations phased out the production and consumption
of class I, Group II (halons) on January 1, 1994, and all other class I
controlled substances (except methyl bromide) on January 1, 1996, a
very limited number of exemptions exist, consistent with U.S.
obligations under the Protocol. The regulations allow for the
manufacture of phased-out class I controlled substances, provided the
substances are either transformed, or destroyed. (40 CFR 82.4(b)) They
also allow limited manufacture if the substances are (1) exported to
countries listed under Article 5 of the Protocol, (2) produced for
essential uses as authorized by the Protocol and the regulations, or
(3) produced with destruction or transformation credits. (40 CFR 82.4
(b))
The regulations allow import of phased-out class I controlled
substances provided the sources are either transformed or destroyed.
(40 CFR 82.4(d)) Limited exceptions to the ban on the import of phased-
out class I controlled substances also exist if the substances are: (1)
previously used, (2) imported for essential uses as authorized by the
Protocol and the regulations, or (3) a transhipment or a heel. (40 CFR
82.4(d))
[[Page 41628]]
II. Revisions to the Stratospheric Ozone Protection Program
A. Amendments to Sec. 82.3--Definitions
1. Adding a Definition for the Term ``Confer'' That Pertains to
Essential-Use Allowances
EPA is adding a definition for the term ``confer'' to reflect
wording already in the current regulatory text as published in the
Federal Register on May 10, 1995 (60 FR 24970). Section 82.4(b)
currently includes references to ``conferred unexpended essential-use
allowances'' and ``conferred unexpended destruction and transformation
credits.'' The preamble to the final rule published in the Federal
Register on May 10, 1995 described how the holder of essential-use
allowances could confer those unexpended essential-use allowances to a
producer or importer. (60 FR at 24976.) The preamble to the May 10,
1995 final rule also described how the holder of destruction and
transformation credits could confer the right to produce or import
under the credits to a producer or importer. (60 FR at 24973-24974.)
EPA is adding a definition to Sec. 82.3 that ``confer means to shift
the rights obtained under Sec. 82.4(t) for essential-use allowances
from the holder of the unexpended essential-use allowance to a person
for the production of a specified controlled substance, or to shift the
rights obtained under Sec. 82.9(f) for destruction and transformation
credits from the holder of the unexpended destruction and
transformation credits to a person for the production of a specified
controlled substance.''
2. Adding Destruction Technologies to the List of Those Approved in the
Definition of Destruction
EPA is adding two new approved destruction processes to the list of
technologies currently appearing in the regulation under the definition
of destruction (60 FR 24970, 24987; 40 CFR 82.3). The Parties to the
Montreal Protocol at the Seventh Meeting in 1995 decided to include
radio frequency plasma destruction in the list of approved
technologies. The Protocol's Technology and Economic Assessment Panel
(TEAP) reviewed test results from the technology's operation and
verified that radio frequency plasma destruction meets the suggested
minimum emission standards approved by the Parties (Decision IV/11).
EPA believes that the technical review and recommendation by the TEAP
of radio frequency plasma destruction and the subsequent approval by
the Parties to the Protocol warrants today's inclusion of the
technology in the list of approved destruction processes found under
the definition of destruction in Sec. 82.3 (60 FR 24970).
EPA is also adding, solely for the destruction of foams, the
limited inclusion of municipal solid waste incinerators in the list of
approved technologies in the definition of destruction currently found
in Sec. 82.3 of the regulation (60 FR 24970, 24987). The Parties to the
Montreal Protocol at the Fifth Meeting in 1993 decided to include
municipal solid waste incinerators in the list of approved
technologies, but only for the destruction of foams containing ozone-
depleting substances. The TEAP reviewed the test results from the
operation of municipal solid waste incinerators for the destruction of
foams that contain ozone-depleting substances and verified that the
technology meets the suggested minimum emission standards approved by
the Parties at the Fourth Meeting (Decision IV/11). EPA believes that
the technical review and recommendation by the TEAP of municipal solid
waste incinerators for the destruction of foams that contain ozone-
depleting substances and the subsequent approval by the Parties to the
Protocol warrants today's inclusion of the technology in the list of
approved destruction technologies found under the definition of
destruction in Sec. 82.3 (60 FR 24970, 24987).
3. Simplifying the Definition of ``Importer''
EPA is simplifying the definition of ``importer'' for enforcement
purposes. Over the past few years, EPA has worked with an inter-agency
taskforce of other Federal Agencies to enforce against the illegal
import of banned class I controlled substances. Members of the inter-
agency taskforce include EPA, the Department of Justice, the U.S.
Customs Service, the Internal Revenue Service, the Department of State,
and other interested agencies. Enforcement personnel from taskforce
agencies have discovered difficulties in working with the definition of
importer listed in the May 10, 1995 final rule (60 FR 24988) in
building cases against illegal importers due to ambiguities about who
ultimately is responsible. Thus, enforcement officials from EPA and
other taskforce agencies suggested that EPA simplify the definition of
the term ``importer'' to eliminate ambiguities and to make it easier to
enforce. EPA is simplifying the definition of ``importer'' to be ``the
importer of record listed on U.S. Customs Service forms for imported
controlled substances, used controlled substances or controlled
products.''
4. Adding a Definition for the Phrase ``Source Facility'' That Pertains
to the Petition Process for Imports of Used Controlled Substances
EPA is adding a definition to Sec. 82.3 for the term ``source
facility.'' The term ``source'' was included in the regulatory text of
Sec. 82.13(g)(2)(iii) regarding petitions to import used class I
controlled substances but was not defined in Sec. 82.3 of the final
rule published in the Federal Register on May 10, 1995 (60 FR 24970).
As explained in the preamble to the May 10, 1995 final rule, the intent
of the petition process is to allow EPA to independently verify whether
a class I controlled substance is, in fact, previously used. EPA
established the petition process because quantities of class I
controlled substances were entering the U.S. mis-identified as ``used''
when they were, in fact, newly produced ozone-depleting chemicals.
Under the Protocol, trade in previously used controlled substances is
permitted even after the phaseout dates. To independently verify that a
quantity of class I controlled substance was previously used, EPA needs
detailed information about the source facility from which the material
was recovered. EPA discovered that companies petitioning to import used
class I controlled substances under the current requirements need
clarification of the term ``source facility'' so that they can submit
complete information to allow independent verification. In distributing
information about the petition process, EPA has clarified that source
facility means the exact location from which a used controlled
substance was recovered from a piece of equipment, including the name
of the company responsible for, or owning the location, a contact
person at the location, the mailing address for that specific location,
as well as a phone number and a fax number for the contact person at
the location. In choosing this definition for the term ``source
facility,'' EPA considered whether it was sufficiently clear for a
person wishing to submit a petition to import used class I controlled
substances as well as for EPA to independently verify that the quantity
of material cited in the petition was, in fact, previously used.
5. Clarifying the Definition of Transhipment
In today's action, EPA would like to clarify the definition of
``transhipment'' of controlled substances and make the distinction
between a transhipment and
[[Page 41629]]
an import that is subsequently re-exported. The first discussion of
transhipment appeared in the proposed rulemaking published in the
Federal Register on March 18, 1993 (58 FR 15014, 15044). The March 18,
1993 proposed rulemaking raised the issue of transhipments pursuant to
Decision IV/14 of the Fourth Meeting of the Parties, which addressed
transhipments of bulk substances from the country of origin, through a
third country, to the country of final destination. Decision IV/14 of
the Parties to the Protocol clarifies that transhipments are not
included in the third country's calculation of consumption. Recall that
consumption means production plus imports minus exports.
The December 10, 1993 final rulemaking defined ``transhipment'' as
``the continuous shipment of a controlled substance from a foreign
state of origin through the United States or its territories to a
second foreign state of final destination.'' (58 FR 65018, 65064). The
clarifying phrase ``as long as the shipment does not enter into United
States jurisdiction'' was added on May 10, 1995 (60 FR 24970, 24983).
Re-packaging a shipment that is passing through the United States
would make it an import and a subsequent export under the provisions of
the Montreal Protocol. Such a shipment would count toward the United
States' calculation of its level of consumption. As an Article 2
country under the Montreal Protocol, the United States is obligated to
have a calculated level of consumption equal to zero for all class I
controlled substances (except those substances in Group VI, like methyl
bromide, which are on a different phaseout schedule). Any re-packaging
of shipments of class I controlled substances moving through the United
States could therefore be a violation of the United States' obligations
under the Protocol. Thus, EPA is adopting a definition of transhipment
that does not permit a shipment to be re-packaged. The current
definition distinguishes between a transhipment and a shipment that is
imported, re-packaged and then exported, by using the phrase,
``continuous shipment.'' A continuous shipment enters and leaves the
United States and is not repackaged or manipulated in any manner before
it exits for its final destination. In the context of U.S. Customs
regulations (19 CFR Sec. 123 and Sec. 19 CFR 19), the term
``manipulation'' has a specific meaning regarding whether a shipment is
to be ``cleaned, sorted, repacked or otherwise changed in condition''
as it travels in transit through United States jurisdiction. In today's
action, EPA is stating that a transhipment as defined under this
Subpart cannot be re-packaged, sorted, or otherwise changed in
condition.
In conjunction with the clarification of the definition of
transhipment proposed in the Federal Register on November 20, 1994 (59
FR 56276), EPA discussed re-packaging of controlled substances during
transhipments. The discussion was prompted by concerns of a company
that brings large quantities of a controlled substance in tank ships
that are unloaded to on-shore tanks in the United States. The
quantities of controlled substance put into these on-shore tanks are
loaded directly onto other ships bound for foreign destinations. EPA
does not consider the unloading of a controlled substance from a tank
ship directly into a large receiving tank for eventual re-loading onto
another tank ship to be re-packaging. When the controlled substance is
directly unloaded from a ship into an on-shore tank and then directly
loaded from that same tank onto a different ship the package for the
controlled substance does not change while it is within the United
States jurisdiction, and therefore is not re-packaged. In contrast,
when a controlled substance is unloaded from a ship onto a dock in the
United States in, for example, a 1-ton ISO tank and the controlled
substance is transferred from the 1-ton ISO tank to either smaller or
larger containers, it is considered to be re-packaged. EPA does not
consider the transfer of controlled substances between ships in U.S.
ports to be re-packaging.
EPA is continuing to exempt transhipments from the limits and
requirements set forth in the prohibitions of Sec. 82.4. Transhipments
do not include imports where any form of re-packaging occurs for a
shipment of controlled substance as it moves through the United States
or its territories before it is exported to a foreign country. In the
final rule published in the Federal Register on May 10, 1995, EPA
decided against broadening the definition of transhipment to allow re-
packaging. EPA believes that re-packaging of controlled substances
coming from a foreign state of origin, moving through the United States
or its territories, bound for a final destination in another foreign
state renders the controlled substance an import for purposes of the
Montreal Protocol. Today's action clarifies the meaning of the
definition of transhipment vis-a-vis re-packaging and corrects the
grammar in the current definition to read, ``transhipment means the
continuous shipment of a controlled substance from a foreign state of
origin through the United States or its territories to a second foreign
state of final destination, as long as the shipment does not enter into
United States jurisdiction. A transhipment, as it moves through the
United States or its territories, cannot be re-packaged, sorted or
otherwise changed in condition.''
B. Amendments to Sec. 82.4--Prohibitions
1. Licensing Imports and Exports of Listed Controlled Substances--Both
Newly Manufactured and Previously Used
EPA believes that current regulatory requirements can be used to
satisfy the United States' obligation to establish a licensing system
for imports and exports of new and used controlled substances, in
accordance with a recent amendment to the Montreal Protocol. At the
Ninth Meeting of the Parties to the Protocol (1997, Montreal), the
Parties agreed to amend Article 4, with the addition of section B.
Paragraph 1 of Article 4B reads: ``Each Party shall, by 1 January 2000
or within three months of the date of entry into force of this Article
for it, whichever is the later, establish and implement a system for
licensing the import and export of new, used, recycled and reclaimed
controlled substances in Annexes A, B, C and E.'' Under paragraph 3 of
Article 4B, each Party is obligated to report to the Ozone Secretariat
``within three months of the date of introducing its licensing
system.''
EPA wishes to address this change to Article 4B to ensure
compliance with the Protocol and the CAA. Section 614(b) of the CAA
states, ``[t]his title as added by the Clean Air Act Amendments of 1990
shall be construed, interpreted, and applied as a supplement to the
terms and conditions of the Montreal Protocol, as provided in Article
2, paragraph 11 thereof, and shall not be construed, interpreted, or
applied to abrogate the responsibilities of obligations of the United
States to implement fully the provisions of the Montreal Protocol.''
Thus, today's discussion of the U.S. licensing system is relevant to
ensuring compliance with both the Protocol and Title VI of the CAA.
Under the current regulatory framework, only companies with one of
several types of licenses are allowed to import or export controlled
substances and used controlled substances not exempted under
Sec. 82.4(d), and (h) of the final rule published in the Federal
Register on May 10, 1995 (60 FR 24970). EPA will consider holders of
all type of
[[Page 41630]]
allowances, credits or non-objection notices to be holders of licenses
in accordance with U.S. obligations under the Protocol. The types of
allowances that will be considered licenses include production and
consumption allowances, Article 5 allowances and essential-use
allowances. The specifics of what EPA will consider as licenses and
other types of imports and exports exempted from licensing are
discussed below. Other systems EPA considered for licensing imports and
exports of controlled substances are also described below.
In implementing various provisions of the Montreal Protocol and
Title VI of the CAA, EPA currently requires certain types of licenses
to import or export class I controlled substances. Imports of class I
controlled substances (except Group VI substances) are currently
banned, but for exemptions and exceptions contained in Sec. 82.4 of the
final rule published in the Federal Register on May 10, 1995. The
exemptions in this rule (40 CFR Part 60 Subpart A) are permitted under
the Protocol and the CAA.
Companies allocated production and consumption allowances in
Secs. 82.5 and 82.6 of the May 10, 1995 final rule for class I, Group
VI controlled substances (i.e., methyl bromide) will be considered
holders of licenses (in the form of allowances) for the import and
export of this specific class I controlled substance. Companies granted
essential-use allowances under the provisions of section 82.4(t) will
also be considered holders of licenses to import a restricted quantity
of the specific class I controlled substance(s) during the specified
control period. Likewise, a person obtaining a non-objection notice in
response to a petition to import used class I controlled substances in
accordance with Sec. 82.4(j) and Sec. 82.13(g)(2) and (3) will be
considered the holder of a shipment-specific import license.
The current regulations, published in the Federal Register on May
10, 1995 (60 FR 24970), have few restrictions on exports. The current
regulations limit the quantity of class I controlled substances a
company can produce for export to Article 5 countries through the
allocation in Sec. 82.9 of Article 5 allowances. Therefore, companies
allocated Article 5 allowances in Sec. 82.9 will be considered to be
holders of licenses to export. In addition, Sec. 82.4(k) of the current
rule (Sec. 82.4(l) of today's amendments) prohibits a person from
exporting a class I, Group I or Group II controlled substance to a
foreign state that is a non-Party to the Protocol. This section also
prohibits the export of class I, Group III, IV, or V substances to a
foreign state not party to the 1990 amendments to the Protocol. In Part
II.B.4 and Part II.B.5 below, EPA is adding a prohibition on exports of
class I, Group VII controlled substances to non-Parties in accordance
with amendments to the Protocol agreed to in Vienna in 1995.
For class II controlled substances (HCFCs), in accordance with the
amendment agreed to by the Parties to the Protocol in 1997, EPA will
consider importers and exporters who submit quarterly reports as
currently required in Sec. 82.13(n) of Subpart A to be the holders of
import and export licenses. EPA is adopting this approach for class II
controlled substances as a temporary measure. The Agency will soon
publish an Advance Notice of Proposed Rulemaking (ANPRM) that will
describe potential control measures for ensuring U.S. consumption of
class II controlled substances remains under the cap established under
Article 2F of the Protocol. The ANPRM will describe options being
considered for establishing an allowance system to control production,
import and export of class II controlled substances. At the time EPA
establishes controls through allowances, to limit U.S. consumption of
class II controlled substances, the allowances will be considered
licenses for imports and exports.
In developing today's rule, EPA considered other licensing systems,
including one that would require a company to request a license prior
to importing class I controlled substances, including those for
exempted purposes, such as transformation, destruction, and heels. In
addition, EPA considered a parallel licensing system for exports that
would require a company to request a license prior to exporting class I
controlled substances for exempted purposes, such as transformation or
destruction. EPA believes that the 1997 amendment to Article 4 of the
Protocol that requires a ``system for licensing the import and export
of new, used, recycled and reclaimed controlled substances'' does not
extend to controlled substances destroyed by approved technologies or
used as feedstocks, since these amounts are not included in the
definitions of production or consumption under the Protocol. EPA's
consideration of other licensing systems included: a shipment-by-
shipment approach, a quarterly approach, a yearly approach, a quantity
specific approach, and a non-quantity specific approach. EPA decided
not to adopt these alternative licensing systems in order to minimize
burden on the regulated community and conserve Agency resources.
EPA's decision to treat existing requirements as a licensing system
in no way relieves a person importing and exporting controlled
substances or used controlled substances from the existing
recordkeeping and reporting requirements in Secs. 82.9 through 82.13.
2. Control of Exported Products That Rely on Class I Controlled
Substances for Their Continuing Functioning to Article 5 Parties
EPA is amending the regulation to control the export of products
that rely on class I controlled substances for their continuing
functioning to Article 5 Parties, in accordance with Decision IX/9
agreed to by the Parties to the Protocol at the 9th Meeting in Montreal
in 1997. Decision IX/9 ``recommend[s] to non-Article 5 Parties to adopt
appropriate measures to control, in cooperation with the importing
Article 5 Parties, the export of used products and equipment, other
than personal effects, whose continuing functioning relies on supply of
substances listed in Annexes A and B of the Montreal Protocol [CFCs,
halons, carbon tetrachloride, and methyl chloroform].''
Decision IX/9 was taken by the Parties to the Protocol in
recognition of the concern expressed by Article 5 Parties that CFC-
technologies, and other technologies relying on class I controlled
substances for their continuing functioning, are decommissioned in
Article 2 Parties and ``dumped'' into their markets. Article 5 Parties
have until 2010 to complete their phaseout of production and
consumption of class I controlled substances (except Group VI
substances). This phaseout date for Article 5 Parties is ten (10) years
after the phaseout date originally established for non-Article 5
Parties at the 1990 Meeting of the Parties (London Amendments). Since
1990, the non-Article 5 Parties have agreed to accelerate their
phaseout date for class I controlled substances (except Group VI
substances).
Due to the existence of alternative technologies, some Article 5
Parties view products that rely on class I controlled substances for
their continuing functioning as being obsolete. Some Article 5 Parties
say exports from industrialized nations of products that rely on class
I controlled substances foster continued dependence on these substances
and retard their transition to non-ODS technologies. EPA supports a
speedy transition away from class I controlled substances in Article 5
Parties and has considered various ways in which the U.S. can support
this transition through
[[Page 41631]]
restrictions and controls on exported products whose continuing
functioning relies on class I controlled substances.
EPA has considered several methods for implementing Decision IX/9
taken by the Parties to the Protocol in 1997 at the Anniversary Meeting
in Montreal. It should be noted that the phrase ``continuing
functioning'' was chosen by the Parties to refer to products that need
to be re-filled with class I controlled substances to continue to serve
their intended purpose; the decision did not capture other products,
such as metered-dose inhalers. In today's action, EPA is adding a
restriction on exports of products whose continuing functioning relies
on class I controlled substances that will be triggered when, and if,
EPA receives a notification from an Article 5 government that the
import of a particular type of product is restricted and the
manufacture of that product with specified ozone-depleting substances
is banned in that Article 5 country. The relevant agency or the
consulate of the Article 5 Party must provide EPA with a copy of the
national law, regulation or other administrative action creating a
restriction on imports of products that rely on class I controlled
substances for their continuing functioning and restricting their
manufacture within the same country. With today's action EPA is adding
a new Sec. 82.4(m) to establish the framework for a ban on the export
of products whose continuing functioning relies on class I controlled
substances. Upon receipt of an official document from the government of
an Article 5 Party, EPA will publish a notice in the Federal Register
triggering the specific ban on all exports from the United States of
products that rely on class I controlled substances for their
continuing functioning to the specific Article 5 Party. The specific
Article 5 Party will be listed in Appendix J to Subpart A.
In addition, EPA is considering the creation of a licensing system
for U.S. exports of products whose continuing functioning relies on
class I controlled substances. A licensing system would be used to
monitor exports of products from the U.S. to Article 5 countries as an
additional control measure that would work in parallel with the ban
described above.
3. Prohibit Imports and Exports of HBFCs From or to Non-Parties To the
Protocol
EPA is amending the existing regulation to prohibit the import or
export of hydrobromofluorocarbons (HBFCs) (class I, Group VII
controlled substances) from or to a foreign state that is not a Party
to the 1992 Copenhagen Amendments to the Montreal Protocol. In today's
action, EPA is adding Sec. 82.4(l)(3) to ban trade in HBFCs with non-
Parties to the Copenhagen Amendments to ensure the United States meets
its obligations under the Protocol. HBFCs are very uncommon substances
and EPA has no record of U.S. trade in these class I controlled
substances. Article 4, paragraph 1 ter of the Protocol bans the import
of HBFCs from any country not a Party to the Copenhagen Amendments.
Article 4, paragraph 2 ter of the Protocol bans exports of HBFCs to any
Party that has not ratified the Copenhagen Amendments.
The current regulation (60 FR 24970; 40 CFR 82.4(k)(1)) prohibits
the import and export of class I, Group I or Group II controlled
substances from or to foreign states not Parties to the Montreal
Protocol (1987). In addition, the current regulation (60 FR 24970; 40
CFR 82.4(k)(2)) prohibits the import and export of class I, Group III,
Group IV, and Group V controlled substances from or to foreign states
not Parties to the London Amendments (1990). These bans on imports from
and exports to non-Parties reflect an agreed strategy by signatory
countries for encouraging ratification of the Montreal Protocol and
each successive package of amendments.
4. Application Process for Exemptions to the HCFC Phaseout for Specific
National Security Uses
In today's action, EPA is creating a very limited exemption to the
U.S. accelerated phaseout dates for class II controlled substances,
known collectively as hydrochlorofluorocarbons (HCFCs). EPA believes
U.S. government national security interests have vital needs for
specific, small quantities of HCFC-141b beyond the phaseout dates
contained in Sec. 82.4(l) and(m) of the final rule published in the
Federal Register on May 10, 1995 (60 FR 24970). EPA is creating an
exemption to the accelerated phaseout of the production and import of
HCFC-141b for national security purposes. EPA believes that the new
Sec. 82.4(u)(3) will not adversely affect compliance with the
provisions of the Clean Air Act Amendments of 1990 or the U.S.
obligations under the Montreal Protocol as amended.
A person seeking an exemption for the production and import of
HCFCs for national security purposes under Sec. 82.4(u)(3) must apply
for the exemption under Sec. 82.9. Today's action includes a
streamlined application and review process under Sec. 82.9(g) for
national security allowances. The application process requires a U.S.
government entity with a national security interest to submit the
following information to EPA: (a) name and address of national security
entity; name of contact person and phone and fax numbers and e-mail
address; (b) quantity (in kilograms) of HCFC-141b needed for the
control period for the national security interest; (c) a description of
the national security interest met by the use of HCFC-141b; (d) a
technical description of the use of HCFC-141b; (e) a technical
description of why alternatives and substitutes are not sufficient or
suitable to eliminate the national security use of HCFC-141b; and (f) a
detailed analysis showing why stockpiled, recovered or recycled
quantities are deemed to be technically and economically infeasible for
use.
EPA will review the application in order to determine whether to
grant national security allowances for the specific quantity of HCFC-
141b for the control period. If more information is needed, EPA will
contact the applicant and specify the needed information. EPA will
retain the right to disallow the national security allowances based on
information received regarding, inter alia, fraud, misrepresentation,
inconsistency with Articles and Decisions under the Montreal Protocol,
inconsistency with the intent of the Clean Air Act Amendments of 1990,
or other reasons related to human health and the environment.
EPA considered other approaches to a national security exemption
for the production and import of HCFCs. EPA considered whether the
exemption should be specific for one, or two, or all of the HCFCs
(e.g., specific exemptions only for 141b, 22, or 142b for national
security purposes.) To date, EPA has received only specific requests
for national security exemptions for 141b. Therefore, EPA believes
there is no need for a broader exemption and accordingly is limiting
the exemption to HCFC-141b.
EPA is also establishing a specific application period ending
December 1, 1999. By limiting the time frame for accepting
applications, EPA is providing a strong incentive for U.S. government
entities with national security interests to review their HCFC-141b
needs and conduct long-term planning. By limiting the time frame for
the review of applications, EPA would also be reducing the Agency's
long-term burden to continually review claims of national security
interest.
EPA considered conducting a one-time period of review of petitions
for national security allowances to be
[[Page 41632]]
finalized by publication of a notice with a list of acceptable and
unacceptable national security exemptions to the class II phaseout
dates. EPA decided not to adopt this approach because the Agency
expects very few applications for national security allowances for
class II controlled substances.
Another option in the implementation of an exemption for the
production and import of HCFCs beyond the accelerated phaseout would be
a limit on the total quantity of any HCFC that one U.S. government
entity could request and obtain in a control period. Finally, EPA could
limit the number of control periods for which a U.S. government entity
with national security interests may apply for an HCFC exemption. EPA
did not adopt these options to limit the quantity of material or the
control periods because the Agency expects the numbers of requests and
the quantities to be very small.
The Agency is creating an exemption process for the continued
production or import of HCFC-141b up to January 1, 2030, for
applications related to national security in cases where stockpiled,
recovered or recycled quantities are deemed to be technically and
economically infeasible for use. Upon request by a Federal Government
Agency, the Administrator may grant authorization for production or
import of a specified quantity, for a specified period of time. Only
agencies of the Federal Government can request production or import
quantities under this exception. Thus, companies and other
organizations that are contractors, grantees or otherwise service
providers for the Federal Government must first secure approval and
endorsement through the Agency which requires products made with or
containing HCFCs. Approval for production or import does not imply or
mandate production; each user must locate a willing supplier and
negotiate supply. It should be noted that under CAA section 605(b)(1),
beginning January 1, 2015, it will be unlawful for any person to
produce any class II substance in excess of baseline production levels.
The Agency believes technically feasible and economically viable
alternatives will be available for all commercial and the vast majority
of non-commercial uses of HCFCs prior to their phaseout dates. However,
there may be specialized uses where stockpiled, recovered, or recycled
quantities are technically inadequate or economically not viable. At
this time, the only foreseeable use of this authorization is for
ballistic insulation foam used for space exploration and possibly
cleaning applications for oxygen generators in the military.
Section 605 of the Clean Air Act contains certain constraints on
use, production, and consumption of HCFCs. This exemption is limited by
these constraints. For example, under CAA section 605(a), effective
January 1, 2015, no person may introduce into interstate commerce or
use any virgin class II substance unless the substance is either used
and entirely consumed (except for trace quantities) in the production
of other chemicals, or the substance is used as a refrigerant in
appliances manufactured prior to January 1, 2020. In addition, CAA
section 605(b)(2) prohibits production of class II substances on or
after January 1, 2030. Finally, EPA will not authorize quantities of
HCFCs under the national security exemption that would cause the United
States to exceed the HCFC consumption cap as agreed under the Montreal
Protocol.
5. Simplify Procedure for Apportioning Essential-Use Allowances
EPA is simplifying the yearly process for apportioning essential-
use allowances to U.S. companies. With today's action, EPA is creating
a mechanism to allocate essential-use allowances for future control
periods beginning in 1999 by a letter from the Agency to each person
nominated by the United States to the Secretariat of the Montreal
Protocol for an essential use exemption. After allocating the
essential-use allowances, EPA will publish a Federal Register notice
containing a summary of the allocations.
In establishing the process for exempting essential uses from the
phaseout, EPA published a proposed rule in the Federal Register on
November 10, 1994 (59 FR 56276) and then published the final rule on
May 10, 1995 (60 FR 24970). These rules discussed the essential-use
exemption process and allocated essential-use allowances for 1996 and
1997. EPA published a rule allocating essential use allowances for 1998
on January 28, 1998 (63 FR 4359). Given the need for quick action in
allocating allowances, EPA is simplifying the process for allocating
essential-use allowances for each control period by issuing allowances
by letter, followed by a notice summarizing the allocations.
Given the extensive review prior to authorization by the Parties to
the Protocol, EPA believes the allocation of essential-use allowances
through rulemaking is unnecessary.
In discussing the essential-use process in the preamble to the
November 10, 1994 proposed rule (59 FR 56276, 56282-56283), EPA
described the steps necessary to submit an application domestically. In
the same passage, EPA discussed the procedure that the U.S. government
follows in nominating uses to the Parties to the Protocol. Before the
U.S. makes a nomination to the Parties for an essential-use exemption,
EPA and other relevant government agencies carefully review
applications in light of the criteria established in Decision IV/25 and
subsequent Decisions of the Parties to the Protocol that govern
essential uses. The U.S. takes great pains to ensure that each
nomination submitted to the Parties reflects a truly essential need for
a phased-out controlled substance. The Parties carefully consider the
review and recommendations of the Montreal Protocol's Technical and
Economic Assessment Panel (TEAP) and its Technical Options Committees
(TOCs) before authorizing the production of controlled substances for
essential uses beyond the phaseout dates. With today's action, EPA is
announcing its intent to allocate the total quantity of essential-use
authorizations for the calendar year that were approved by the Parties.
6. Prohibit Import of Class I Controlled Substances for Essential-Uses
Except by Companies Allocated Essential-Use Allowances
EPA is prohibiting the import of class I controlled substances for
essential uses by any person that is not allocated essential-use
allowances. EPA is making this change to ensure that the import is
actually used for the allocated essential use, to simplify the
recordkeeping and reporting procedures for U.S. companies and to ease
the administrative burden of tracking imports of exempted quantities by
the Federal government. Today's amendment changes the current
regulations regarding the ability to confer essential-use allowances
for imports. The current regulations (60 FR 24970; 40 CFR 82.4(e),
Sec. 82.13(g)(1)(xvi)) allow holders of essential-use allowances to
confer to another U.S. company the rights to import quantities of
phased-out class I controlled substances. With today's action, EPA is
requiring that U.S. entities allocated essential-use allowances be the
actual importers of class I controlled substances. EPA believes that
U.S. companies allocated essential-use allowances can work with customs
brokers to ensure that their company is listed as the importer of
record on U.S. Customs Service entry documents. By eliminating the
option of conferring essential-use allowances to import class I
controlled substances EPA is attempting to simplify the reporting and
[[Page 41633]]
recordkeeping requirements in Sec. 82.13 of the final rule and ease the
U.S. government's task of tracking imports.
In an effort to combat illegal imports of class I controlled
substances, EPA joined forces with many Federal agencies to create an
inter-agency taskforce. As the supply of ozone-depleting substances has
declined, the residual demand has prompted the development of a black
market for phased-out ozone-depleting substances. In 1995, the U.S.
Customs Service began assisting EPA in monitoring imports of ozone-
depleting substances. U.S. Customs Service inspectors now call EPA to
confirm that any import of class I controlled substances is exempted
under one of the special provisions in Sec. 82.4 of the regulation,
such as essential uses. EPA believes that confirming, tracking and
cross-checking imports of class I controlled substances for essential
uses will be easier if the actual holder of the essential-use allowance
is listed as the importer of record or consignee on the U.S. Customs
Service entry document (Customs form 7501). In addition, EPA believes
that recordkeeping and reporting requirements will be simplified for
U.S. companies if the holder of the essential-use allowances is
responsible for submitting the importer's quarterly report.
C. Amendments to Sec. 82.9--Availability of Production Allowances in
Addition to Baseline Production Allowances
1. Clarification of Increases or Decreases of Article 5 Allowances Due
to International Transfers
EPA is clarifying the regulations regarding trades of Article 5
allowances. To address the confusion about the permissibility of trades
of Article 5 allowances and because trades are allowed under the
provisions of the Montreal Protocol, EPA is removing the phrase ``Until
January 1, 1996'' from Sec. 82.9(c) and adding the phrase ``or Article
5 allowances'' in the first sentence after ``production allowances.''
The regulatory text published in the Federal Register on May 10,
1995 is silent regarding trades of Article 5 allowances with other
Parties to the Montreal Protocol. However, at the time of publication,
EPA wrote in the preamble its interpretation of the Montreal Protocol
stating, ``With today's action, EPA permits inter-pollutant and inter-
company transfers of Article 5 allowances as proposed but is not
permitting inter-Party trades. The Agency determined that inter-Party
trades of Article 5 allowances would violate the provision of the
Protocol that specifically allows additional production by each Party
for export to Article 5 countries.'' (60 FR 24980)
EPA subsequently learned that the Parties to the Protocol do in
fact permit inter-Party trades of Article 5 production. The United
Nations Environment Programme (UNEP) document from the 1993 Bangkok
meeting (UNEP/OzL.Pro.5/8) titled, ``Transfer of Production Rights
under Article 2 of the Montreal Protocol'' asks the question in
paragraph 5(a), ``Can a Party transfer to another Party its right to
produce controlled substances to meet the basic domestic needs of the
Parties under Article 5, paragraph 1?'' In the same UNEP document
(UNEP/OzL.Pro.5/8), paragraph 6 responds, ``Concerning the question in
paragraph 5(a) above , it appears that the term ``calculated level of
production' contained in paragraph 5 of Article 2 includes production
to meet the basic domestic needs of the Parties operating under Article
5, paragraph 1. Therefore, a Party can transfer to another Party its
right to produce to meet the basic domestic needs of the Parties
operating under Article 5, paragraph 1.'' Based on the text in the
Montreal Protocol document (UNEP/OzL.Pro.5/8), EPA is clarifying that
inter-Party trades of Article 5 allowances are permissible.
D. Amendments to Sec. 82.12--Transfers
1. Increases or Decreases of Essential-Use Allowances Due to Emergency
International Transfers
EPA is amending the current regulation to allow the transfer of MDI
essential-use authorizations to or from other Parties under limited
situations to reflect Decision IX/20 taken by the Parties at the 1997
Ninth Meeting in Montreal. Decision IX/20 allows the transfer of
essential-use authorizations for CFCs for MDIs between Parties without
prior review at a Meeting of the Parties only in emergency situations
only if specific conditions are met. There is only one precedent for
the transfer of MDI essential-use authorizations between two Parties.
In this one case, New Zealand submitted a request to transfer
previously approved MDI essential-use authorizations to Australia. New
Zealand requested the transfer because of the planned closure of its
MDI production facility and an agreement with Australia that the MDIs
would be manufactured in Australia and shipped to New Zealand. New
Zealand's request was submitted with sufficient time prior to the
Meeting of the Parties for the TEAP to review and make a recommendation
regarding the transfer. The Parties to the Protocol approved the
transfer of New Zealand's essential-use allowances for CFCs for MDIs to
Australia. Today's action reflects the creation of a safety valve for
emergency cases in which a transfer of essential-use authorizations
from one Party to another would need to occur without opportunity for
prior review and approval of a Meeting of the Parties. Today's action
and Decision IX/20 allow an emergency transfer with the Parties to the
Protocol approving the action after-the-fact.
Decision IX/20 taken at the Ninth Meeting of the Parties allows the
transfer of essential-use allowances for CFCs for MDIs between two
countries without prior approval by the Parties only in emergency
situations and under very specific conditions. If any specific
condition is not met, the transfer may not occur. Decision IX/20 states
that: ``in an emergency situation,'' the transfer of essential-use
authorizations may be allowed by the Ozone Secretariat, in consultation
with the Technology and Economic Assessment Panel, if the following
conditions are met: ``(a) the transfer applies only up to the maximum
level that has previously been authorized for the calendar year in
which the next Meeting of the Parties is to be held, (b) both Parties
involved agree to the transfer, (c) the aggregate annual level of
authorizations for all Parties for essential uses of MDIs does not
increase as a result of the transfer, and (d) the transfer or receipt
is reported by each Party involved on the essential-use quantity
accounting format approved by the Eighth Meeting of Parties by
paragraph 9 of decision VIII/9.''
During the discussion of Decision IX/20, the Parties clarified that
the intent of the phrase ``in an emergency situation,'' was to allow a
safety provision for the supply of CFCs for MDIs if there is a
disaster, such as a fire at the only MDI manufacturing facility within
a country. Thus, EPA will approve transfers of essential-use
authorizations only if the emergency situation is the result of a
catastrophic natural event or war. A request to transfer essential-use
allowances due to poor planning or management will not be considered an
emergency situation for purposes of today's amendment. Furthermore, an
emergency situation must also be shown to seriously threaten the
treatment of patients with asthma or chronic obstructive pulmonary
disease (COPD) within one of the countries in the proposed transfer.
With today's action, EPA will not allow the transfer of essential-
use allowances from one U.S. company to
[[Page 41634]]
another company within the United States. EPA believes that information
on the U.S. MDI market indicates domestic essential-use allowances are
distributed in a manner that will allow for continued treatment of
patients with asthma and COPD in the event of an interruption of supply
of CFCs or a problem with manufacturing at one facility or one company.
EPA's analysis indicates a measure of redundancy in the domestic market
to respond to such contingencies.
The procedures for transferring essential-use authorizations prior
to the meeting of the Parties to address an emergency situation require
a company to submit a very detailed description of the emergency and an
analysis demonstrating the serious impact the emergency will have on
patients. A U.S. holder of essential-use allowances for CFCs for MDIs
or a U.S. manufacturer of MDIs identified through prior arrangement
with a foreign manufacturer of MDIs may submit a request for approval
to EPA regarding an emergency situation that requires the transfer of
essential-use authorizations. The information to be submitted in a
request for an emergency transfer of essential-use allowances is listed
in Section 82.12(a)(3). The request must certify the accuracy of the
information submitted and fully document the emergency situation that
was created by a catastrophic natural event or war, including, where
appropriate, submission of photos, reports from local, state or Federal
authorities, or a report from an independent auditor. In a case when
the emergency situation exists in a foreign state the request must
include a letter from the foreign environmental ministry and a letter
from the foreign health ministry verifying the emergency situation and
the serious threat the emergency situation poses for the treatment of
patients with asthma and COPD in that country. Submission of a request
to transfer essential-use authorizations for CFCs for MDIs does not
guarantee EPA's approval of or agreement with the requested transfer.
Rather, EPA will review the information provided and use it to
independently verify that the emergency situation exists and that the
emergency situation seriously threatens the health and treatment of
patients with asthma or COPD.
In reviewing a request for an emergency transfer of essential-use
authorizations for CFCs for MDIs, EPA may consider the following
factors:
(1) Information sufficient to make a determination regarding
whether the situation is an emergency due to a catastrophic natural
event or war; (2) possible serious threats to the treatment of patients
with asthma and COPD; (3) possible creation of economic hardship; (4)
possible effects on trade; (5) potential environmental implications;
and (6) the total amount of unexpended essential-use allowances held by
United States entities.
After a review of these factors in consultation with other agencies
of the U.S. Federal government, a notice will be issued through the
U.S. Department of State, to the UNEP Ozone Secretariat, either
agreeing or disagreeing with the transfer of essential-use
authorizations and specifying the control period to which the transfer
applies. For an approved trade from a Party, EPA will issue a notice
that revises the essential-use allowances held by the person for the
control period in question to equal the unexpended essential-use
allowances held by the person under Subpart A plus the amount of
essential-use authorizations transferred from the Party. For an
approved trade to a Party, EPA will issue a notice that revises the
essential-use allowances held by the person to equal the unexpended
essential-use allowances held by the person under Subpart A minus the
amount of essential-use authorizations transferred to the Party for the
specific control period.
E. Amendments to Sec. 82.13--Recordkeeping and Reporting Requirements
1. Removal of Producer Requirement To Report the Quantity of Used
Material Received That Contains Recycled or Reclaimed Controlled
Substances
EPA is removing the reporting requirement under Sec. 82.13(f)(3)(v)
that asks producers of class I controlled substances to report on ``the
quantity of used material received containing controlled substances
that are recycled or reclaimed.'' Because of the phaseout, EPA believes
most producers either closed their facilities or drastically reduced
their business in class I ozone-depleting substances (except Group VI
substances). Class I controlled substances used as refrigerants are
controlled under authority of Section 608 of the CAA in the regulations
published under 40 CFR Part 82, Subpart F. Reclaimers of refrigerants
are required to be EPA-certified under section 82.164 and required to
report information about their reclamation process annually under
section 82.166. U.S. producers of class I controlled substances are, in
general, not accepting recycled or reclaimed material because class I
controlled substances are being recycled and reclaimed by special
facilities that handle refrigerants or re-process wastes. Today's
action eliminates the reporting requirement in 82.13(f)(3)(v) because
EPA tracks the reclamation of refrigerants under the 608 regulations
and producers are no longer accepting used controlled substances after
the phaseout of class I controlled substances.
2. Add to the Producer Recordkeeping and Reporting Requirements the
Need To Maintain and Submit a Certification That a Quantity of Class I
Controlled Substance Will Be Used as a Process Agent
EPA is adding the requirement that producers of class I controlled
substances maintain a record obtained from purchasers certifying the
purchasers' intent to use the cited quantity as a process agent in
accordance with the current definition of controlled substance in
Section 82.3. EPA is requiring that the purchaser certify that it will
use the total quantity of purchased class I controlled substance as a
process agent in accordance with the definition of controlled substance
in the final rule published in the Federal Register on May 10, 1995 (60
FR 24970). EPA is also requiring that producers submit the
certifications received with their quarterly reports.
EPA is adding today's recordkeeping and reporting requirement for
process agents due to a change in the treatment of process agents under
the Montreal Protocol. Since 1996, the Parties to the Protocol have
agreed to treat process agents in the same manner as feedstocks, that
is, the same as controlled substances that are transformed. In
accordance with Decisions VI/10 and VII/10, since the phaseout of class
I controlled substances, the production of these substances for use as
a process agent has been treated as transformation for purposes of
recordkeeping and reporting under this regulation. At the Ninth Meeting
of the Parties in 1997, the Parties did not extend beyond the 1998
control period the treatment of process agents in a manner similar to
feedstocks.
When the Parties to the Protocol decided not to extend the
treatment of process agents in a manner similar to feedstocks, the
treatment of process agents reverted to an earlier decision by the
Parties. Decision VI/12, taken by the Parties in 1992, clarifies the
definition of controlled substances and states that ``insignificant
quantities of controlled substances originating from inadvertent or
coincidental production during a manufacturing process, from unreacted
feedstock, or from their use as process
[[Page 41635]]
agents which are present in chemical substances as trace impurities, or
that are emitted during production manufacture or handling, shall be
considered not to be covered by the definition of a controlled
substance contained in paragraph 4 of Article 1 of the Montreal
Protocol.'' Decision IV/12 is reflected in the current definition of
controlled substances in Section 82.3 as published in the Federal
Register on May 10, 1995. Thus, the production of controlled substances
for use as a process agent is not included in the definition of
controlled substances in the regulation.
A very small number of manufacturing processes in the U.S. use a
class I controlled substance as a process agent. In almost every case,
the manufacturing process uses carbon tetrachloride to control or
maintain a chemical reaction. Many companies have submitted a
description of their manufacturing process to EPA, asking if their
process would be considered a process agent use of a class I controlled
substance. In such cases, a producer of a class I controlled substance
can rely on the letter from EPA to determine if the purchaser can
purchase the material as a process agent. If a producer of a class I
controlled substance is unsure about whether the manufacturing process
of a potential new purchaser qualifies as a process agent use, the
producer should refer the purchaser to EPA for a determination.
3. Clarify the Need for Letters That Confer Essential-Use Allowances
and Destruction and Transformation Credits to Producers and That These
Letters Be Submitted With Producer's Quarterly Reports
EPA is issuing a clarification of existing requirements. EPA is
clarifying that holders of essential-use allowances that place orders
for class I controlled substances must confer essential-use allowances
to the producer in order to receive the material. EPA is also
clarifying that the letter that confers the essential-use allowances
must certify that the quantity of class I controlled substance is being
purchased solely for the specified essential use and will not be resold
or used in any other manufacturing process. Similarly, laboratory
customers that place orders for class I controlled substances must
certify that the quantity of class I controlled substance is being
purchased solely for laboratory applications and will not be resold or
used in manufacturing. Distributors of laboratory supplies that place
orders for class I controlled substances must certify that the
controlled substances were purchased for sale to laboratory customers
who make the above certifications.
EPA is clarifying that producers must submit to the Agency a copy
of letters that confer any essential-use allowances or destruction and
transformation credits. Under the current reporting requirements found
in Sec. 82.13(f)(3)(xi) and (xii) of the final rule published in the
Federal Register on May 10, 1995 (60 FR 24970), producers must submit
``a list of essential-use allowance holders * * * from whom orders were
placed'' as well as ``the certifications from essential-use allowance
holders.'' Under the current reporting requirements at
Sec. 82.13(f)(3)(iv), producers must submit data on the number of
expended and unexpended essential-use allowances and destruction and
transformation credits conferred to them for each quarter.
In 1996 and 1997, few producers and importers submitted letters
from purchasers conferring essential-use allowances or certifying that
the controlled substances were purchased solely for the specified
essential uses. With today's action, EPA is clarifying that holders of
essential-use allowances must write a letter conferring the essential
use allowances to the producer, and that this letter must certify that
material is purchased solely for the specified essential-use and will
not be resold or used in any other manufacturing process. Laboratory
customers that place orders for class I controlled substances must
certify that the quantity of class I controlled substance is being
purchased solely for laboratory applications and will not be resold or
used in manufacturing. Distributors of laboratory supplies must certify
that the material is purchased solely for sale to laboratory customers
who certify that the substances will only be used for laboratory
applications and will not be resold or used in manufacturing.
As explained in Section II.B.8. above, EPA is prohibiting holders
of essential-use allowances from conferring the right to import, and
instead, requiring them to become the actual importer of phased-out
class I controlled substance. EPA is also requiring that distributors
of laboratory supplies follow the same procedures and, as they have
done since 1996, act as the importer of the quantity of phased-out
class I controlled substance that is exempted under the essential-use
provisions for laboratory and analytical uses.
EPA is clarifying an existing requirement that copies of letters
that confer essential-use allowances and that certify that the material
is purchased solely for the specified essential use be included with
the producer's quarterly reports to EPA.
4. Changes to the Petition Process for Importing Used Class I
Controlled Substances
EPA is changing the petition process for imports of used class I
controlled substances. Today's changes clarify existing requirements.
In addition, some of the amendments are designed to give EPA greater
ability to ensure imports are, in fact, used controlled substances
(i.e., not newly produced substances).
The original reason the Parties to the Protocol agreed to permit
international trade in previously used ozone-depleting substances
beyond the Protocol's control regimes was to ease the transition to
alternatives. In addition, the Parties believed that allowing trade in
quantities of already existing used material would offset the need for
new production globally. EPA believes that, in many cases, the opposite
may be occurring. The diminishing supplies and hence rising prices of
class I controlled substances in the U.S., combined with continued
production of virgin material in Article 5 countries, creates an
opportunity for such large financial gain that, instead of offsetting
new production, it is likely that trade in used controlled substances
is fostering new production. Evidence increasingly indicates that new
production overseas is being clandestinely diverted to the U.S. and
other non-Article 5 countries as exports of ``used'' material. To the
extent that the petition process unwittingly encourages mislabelling or
adulteration of new production overseas, and the submission of false
information, it undermines the Parties' original intention in
permitting trades of used ozone-depleting substances.
Although today's amendments simply tighten the existing
requirements, EPA is also considering a complete ban on imports of used
class I controlled substances. EPA is considering an import ban on used
class I controlled substances because of the enormous burden, both in
logistics and in resources, to independently verify the information in
petitions to guarantee that shipments are, in fact, previously used
controlled substances. Without physically inspecting each site from
which a class I controlled substance is recovered from equipment, EPA
is making decisions based on the documents and information provided by
petitioners. EPA is also considering a ban on imports of specific used
controlled substances instead of a
[[Page 41636]]
comprehensive ban on all used class I controlled substances.
EPA believes that, in some cases, the petition requirements
published in the May 10, 1995 final rule (60 FR 24970; 40 CFR
Sec. 82.13(g)(2)) have been misunderstood. EPA hopes today's
clarifications will reduce the number of times EPA objects to a
petition and then objects to re-submissions of the same petition due to
insufficient information before finally approving the complete petition
package. EPA believes that, in other cases, the petition process has
been abused. EPA is making today's changes in the hopes that the
provisions of the petition process can be adequately tightened to guard
against abuses and guarantee that imported material is truly previously
used.
a. Clarification that a Petition to Import Used Class I Controlled
Substances is Submitted for Each Individual Shipment. EPA would like to
clarify that a petition to import used class I controlled substances
may only be submitted on a shipment by shipment basis. EPA is not
changing the current requirement with this action but clarifying the
existing requirement in Sec. 82.13(g)(2). The information in a petition
and the quantity a person wishes to import into the United States must
be limited to a specific shipment and a single U.S. Customs entry. If
an importer cannot arrange for the entire quantity to be shipped as one
entry through U.S. Customs, the importer is required to submit more
than one petition for the quantity in each individual Customs entry.
b. Changing the de minimis Quantity for an Individual Shipment for
which a Person is Required to Submit a Petition to Import Used Class I
Controlled Substances. EPA is reducing the de minimis amount for an
individual shipment for which a person is required to submit a petition
to import used class I controlled substances. Section 81.13(g)(2) of
the final rule published in the Federal Register on May 10, 1995,
requires a person to submit a petition to import used class I
controlled substances ``for each individual shipment over 150 pounds.''
A de minimis amount of 150 pounds was established in the May 10, 1995
final rule to allow companies to import small samples of material so
they could run laboratory analyses and determine if reclamation would
be physically possible and economically justifiable before importing a
large tank. EPA has since learned that samples of class I controlled
substances are generally taken from large tanks in special cylinders
that generally weigh less than 2 pounds. EPA is therefore setting the
de minimis quantity at five (5) pounds. EPA is setting the de minimis
quantity at five pounds in order to avoid the unnecessary import of
class I controlled substances. EPA believes that a quantity of 150
pounds is much larger than necessary to meet laboratory analysis needs.
A de minimis level of five pounds allows a company to take three
samples from a large ISO-tank for laboratory analysis and send those
samples to a testing facility in the U.S. without being subject to the
petition requirements. In developing today's amendments, EPA also
considered requiring that a person who wishes to import any quantity of
used class I controlled substance, regardless of the size, be required
to submit a petition, thereby eliminating the de minimis level
altogether. EPA decided not to eliminate the de minimis level
altogether in order to minimize burden on the regulated community and
conserve Agency resources.
c. Revised and Expanded Information Requirements for a Petition to
Import Used Class I Controlled Substances. EPA is amending the
regulation to include a more comprehensive and detailed list of
information that will be required for petitions to import used class I
controlled substances. Most of these changes are intended to make the
current regulatory text more explicit regarding the type of information
that EPA needs to independently verify, above all, the previous use of
the controlled substance. Today's action adds a requirement under
Sec. 82.13(g)(2) that contact information for the entire chain of
custody of the used controlled substance be provided in the petition.
For example, EPA is stating that a petition include complete contact
information for: every source facility from which the used controlled
substance was recovered, every company that collected the material from
the equipment, every previous owner of the material, and every company
that will be exporting the used controlled substance.
EPA is also requiring that a petition to import used class I
controlled substances include dated documents indicating the time the
material was put into the equipment. EPA is requiring that the petition
to import used class I controlled substances include the name, make and
model number of the equipment from which the material was removed. The
current text under Sec. 82.13(g)(2)(vi) requires a petition to provide
the ``intended use'' of the controlled substance. Today's amendment
calls for, in addition to the intended use, a copy of a contract for
the purchase of the controlled substance. In light of efforts by
Parties to the Protocol to implement a licensing system for exports as
well as imports, EPA is requiring that the petition provide an export
license from the appropriate government agency in the country of
export.
d. Removal of the Information Requirement regarding the
Certification of Tax Liability for Used Class I Controlled Substances
from the Petition. EPA is removing the requirement in Sec. 82.13(g)(2)
(viii) of the current rule from the list of information to be included
with a petition to import used class I controlled substances. This
provision required an importer to certify that the purchaser of the
used, recycled or reclaimed substance ``is liable for the payment of
the tax.'' See 60 FR 24970 (May 10, 1995). EPA published a stay of this
provision on January 31, 1996 (61 FR 3316), and published an extension
of the stay on June 11, 1996 (61 FR 29485). EPA believes that this
provision failed to establish a clear and comprehensive reference to
Internal Revenue Service (IRS) tax requirements that the Agency could
implement effectively. EPA believes it is more appropriate to defer
interpretation of regulatory requirements regarding excise taxes for
ozone-depleting chemicals to the Internal Revenue Service (IRS), the
Federal agency given authority for these taxes under the Omnibus Budget
Reconciliation Act of 1989, the Omnibus Budget Reconciliation Act of
1990 and the Energy Policy Act of 1992. EPA understands from the IRS
that there is an excise tax on bulk shipments of used class I
controlled substances, used class I controlled substances, products
containing class I controlled substances and products made with but not
containing class I controlled substances. However, EPA requests that
all questions regarding the excise taxes on ozone-depleting chemicals
be directed to the Internal Revenue Service.
e. Timing for EPA Review of a Petition. EPA is clarifying and
amending the current regulatory language in Sec. 82.13(g)(2) and (3)
published in the Federal Register on May 10, 1995, regarding the timing
for EPA's review of petitions to import used class I controlled
substances. First, EPA is extending the current 15 working-day time
limit within which EPA must respond to a petition. Given the large
number of petitions being submitted (182 in 1997), combined with the
fact that EPA will likely require more time to independently verify the
additional information required with today's notice, EPA is extending
the current time limit for the review of a petition from 15 to 40
working days. Second,
[[Page 41637]]
EPA is clarifying that the time for review begins on the working day
after EPA's Stratospheric Protection Division actually receives the
petition.
EPA included a time limit for the review of a petition to import
used class I controlled substances in the May 10, 1995 final rule (61
FR 24970) in an attempt to reduce regulatory burden. In the May 10,
1995 final rule, EPA made approval of a petition automatic if, after 15
working days, the person who submitted the petition had not received a
notification from EPA. Through experience and the unforeseen volume of
incoming petitions, EPA learned that the 15 working-day time limit was
too short a period for EPA to conduct a thorough review and automatic
approvals were occurring of petitions that the Agency would not have
otherwise approved. Today's action is designed to correct the issue of
too short a time period for the review of petitions leading to
automatic approvals of petitions that would not otherwise be approved.
EPA considered many other time frames for the review of petitions
to import used class I controlled substances, including a complete
elimination of any time limit for EPA's review of a petition. EPA
considered time frames for the review of a petition to import used
class I controlled substances from the current 15 working-days to as
long as 180 working-days. EPA also considered whether to include an
automatic approval provision with any of these time limits. EPA decided
that a 40-day time frame with no automatic approval would allow the
Agency to balance the goals of responsiveness to legitimate requests
and thoroughness in identifying abuses of the petition process.
f. Clarification of Reasons for Issuing an Objection Notice to a
Petition to Import Used Class I Controlled Substances. EPA is amending
the list of reasons for which the Agency may disallow a petition to
import used class I controlled substances. Section 82.4(i) of the
regulation published in the Federal Register on May 10, 1995, requires
a person to comply with the petition procedures in Sec. 82.13(g)(2) and
(3). The current regulation in Sec. 82.13(g)(3) states that, ``if the
Administrator determines that the information is insufficient, or there
is reason to disallow the import, the Administrator will issue an
objection notice.'' EPA is adding a more detailed list of the reasons
for disallowing an import of used class I controlled substances.
As explained in the preamble of the May 10, 1995 final rule, EPA
attempts to independently verify the information contained in a
petition to import used class I controlled substances, with special
attention given to confirming the prior use of the material. EPA's
effort to confirm the information in a petition is conducted with
support from other government agencies that are members of the inter-
agency taskforce combating illegal imports of ozone-depleting
substances. Since 1994, EPA has worked with the inter-agency taskforce
members who include the Department of Justice, the Internal Revenue
Service, the Customs Service, the State Department, and the Department
of Defense. In the two years of implementing the petition process, EPA
has received a variety of petitions to import used class I controlled
substances. Many of the petitions provide insufficient information or
provide information that EPA has reason to doubt is sufficient to
confirm that the material is, in fact, previously used. EPA also
learned during two years of reviewing petitions that other agencies
sometimes have important insights regarding the specific information
listed in a petition.
EPA is amending its list of reasons for which the Agency might
issue an objection notice to a petition to import used class I
controlled substances.
The first reason for disallowing a petition is a clarification of
the current regulatory text, which says that the petition must provide
the information required in Sec. 82.13(g)(2) and that insufficient
information or what appears to be insufficient information in response
to these requirements is a basis for disallowing a petition.
The second reason for disallowing a petition is if the Agency
determines that the petition contains, or is believed to contain, false
or misleading information.
EPA may issue objection notices for petitions to import used
controlled substances that are contrary to provisions of the Vienna
Convention on Substances that Deplete the Ozone Layer, the Montreal
Protocol and its amendments and decisions, and the non-compliance
procedures outlined and instituted by the Implementation Committee of
the Montreal Protocol. Section 614(b) of the CAA states that in the
case of conflict between the CAA and the Montreal Protocol, the more
stringent provision shall govern. Thus, EPA may, and will, object to
any petition submitted to EPA that contains information about a
transaction that is recognized to be contrary to the provisions of the
Convention and the Protocol, including its amendments and decisions.
With today's action EPA may disallow a petition if the appropriate
government agency in the exporting country has not agreed to issue an
export license for the individual shipment of used controlled substance
that is cited in the petition.
EPA may disallow petitions due to official statements made by
foreign governments. EPA believes that foreign governments may make
official statements either to the United States or to the Parties to
the Montreal Protocol that would warrant an objection notice to a
petition to import used controlled substances from that country.
Certain countries have stated to the Implementation Committee of the
Montreal Protocol that they are no longer allowing exports of used
controlled substances. If a country states that it is no longer
allowing exports or if it reports that it has not granted any export
licenses EPA will treat this as grounds for issuing an objection notice
for a petition to import from that country.
EPA may also issue an objection notice for a petition when the
Agency receives information indicating that a person listed in the
petition is willing to produce false or misleading information
regarding transactions in ozone-depleting substances. In the past, EPA
has received information from other U.S. government agencies, from
other petitioners, from non-governmental organizations and from foreign
governments that have implicated companies or individuals in activities
designed to mislead government authorities about activities related to
ozone-depleting substances.
Another reason for disallowing a petition is the receipt by the
Administrator of information regarding activities contrary to EPA
regulations by any individual or company listed in a petition.
Activities contrary to EPA regulations, that have been reported to EPA
or discovered by EPA personnel and that are related to ozone-depleting
substances include, but are not limited to, un-certified recovery, un-
certified reclamation, reclamation that does not meet the required
specifications, improper labeling, diverted transhipment, mis-
identification during import, forgery of EPA documents, and fraudulent
claims regarding these activities. EPA may disallow a petition if the
Agency receives information that any person or company listed in the
petition is involved in an activity that is a potential violation of an
EPA regulation.
EPA will not grant petitions to import used class I controlled
substances if it is determined that, for the current control period,
the U.S. demand for the specific controlled substance can be satisfied
from domestic stockpiles and
[[Page 41638]]
from recycling and reclamation programs for existing quantities in
domestic equipment. If such a determination is made, EPA would view
further importation of quantities of that specific used class I
controlled substances to be unwarranted. Furthermore, EPA decided that
conditions established for disbursing monies to specific country
projects by the Executive Committee of the Montreal Protocol's
Multilateral Fund may be a basis for objecting to petitions. EPA
believes no used controlled class I substances should be imported from
countries where reclamation capacity, for that specific controlled
substance, has been or is being installed through assistance of the
Multilateral Fund. The United States contributes approximately one
fourth of all funds going to the Multilateral Fund, the general purpose
of which is to assist countries operating under Article 5(1) of the
Protocol to make the transition away from ozone-depleting substances;
and a transition policy includes the development of reclamation
facilities in order to optimize the use of existing ozone-depleting
substances so as to avoid unnecessary production of virgin materials.
Thus, EPA views the importation of used class I controlled substances
from countries where reclamation capacity has been supported by the
Multilateral Fund to run counter to U.S. interest, and counter to the
aims of a global phaseout strategy.
With today's actions, EPA is clarifying and expanding the list of
reasons for objecting to a petition to give the Agency greater leverage
in its efforts to ensure that trade in previously used material is
consistent with the CAA and is in accordance with U.S. obligations
under the Protocol.
g. Requirement that the Petition and the Non-Objection Letter from
EPA for the Import of Used Class I Controlled Substances Accompany the
Shipment through U.S. Customs Clearance. EPA is adding a requirement
that the petition and the non-objection notice from EPA approving the
import of a used class I controlled substance accompany each shipment
through U.S. Customs. In the preamble to the final rule published in
the Federal Register on May 10, 1995, EPA suggested that the petition
and EPA approval letter accompany the shipment of used class I
controlled substances through U.S. Customs. However, EPA did not make
this a requirement in the regulatory language. Today EPA is adding this
requirement to Sec. 82.13(g) such that all importers of used class I
controlled substances must provide these documents to bring a shipment
into the United States. EPA believes that presenting the petition and
EPA-approval letter with a shipment will facilitate the clearance
through U.S. Customs.
5. Requirement That Importers of Controlled Substances and Used
Controlled Substances Use the Harmonized Commodity Codes Specified in
This Regulation in Completing Customs Entry Documents
EPA is requiring that importers of controlled substances and used
controlled substances file Customs entry documents (Form 7501)
containing the specified Harmonized Tariff Schedule numbers listed in
the new Appendix K to 40 CFR Part 82, Subpart A. Monitoring compliance
with the regulatory requirements under this accelerated phaseout rule
will be facilitated by consistency in the Harmonized Tariff Codes used
on Customs entry forms. The regulations of the U.S. Customs Service
require importers to properly identify the contents of a shipment,
including the use of the proper commodity code number from the
Harmonized Tariff Schedule. EPA cross-checks and monitors imports and
exports of controlled substances and used controlled substances by
reviewing information from the U.S. Customs Service. Both EPA and
Customs believe a consistent list of numbers from the Harmonized Tariff
Schedule will ease tracking, reporting, and compliance monitoring of
the ozone-depleting substance phaseout program.
6. Modify the Requirement for a Sales Contract That Certifies Exported
Controlled Substances Will Be Transformed or Destroyed
The current regulations state that exporters of class I controlled
substances must submit to EPA a sales contract certifying that the
exported controlled substances will be transformed or destroyed. (40
CFR 82.13(h)(8)) EPA is changing the requirement in Sec. 82.13(h)(8) to
a requirement similar to the current requirement for importers in
Sec. 82.13(g)(3)(xii). The new requirement requires exporters to submit
an invoice or sales agreement that includes language similar to the IRS
certificate for transformation or the destruction verification for
exports of class I controlled substances to Article 5 Parties to the
Protocol (developing countries).
7. Applying the Recordkeeping and Reporting Requirements to Material
Obtained From Importers as Well as Producers for a Person Who
Transforms or Destroys Class I Controlled Substances
EPA is extending the recordkeeping and reporting requirement for
persons involved in second-party transformation and second-party
destruction of class I controlled substances, to the quantities they
themselves did not import.
EPA is adding a requirement that persons keep records if they
transform or destroy class I controlled substances that they did not
import. The current regulatory text in Sec. 82.13(i) requires a person
to keep these records only if they did not produce the transformed or
destroyed class I controlled substance.
With today's action, EPA is also adding to Sec. 82.13(m) a
requirement that persons report to EPA the names and quantities of
class I controlled substances they transform or destroy when they
submit an IRS certificate of intent to transform or a destruction
verification to an importer. The current regulatory text in
Sec. 82.13(m) requires persons to report within 45 days of the end of
the control period the quantities of class I controlled substances they
transform or destroy for which they submitted an IRS certificate of
intent to transform or a destruction verification to a producer. EPA is
now making the recordkeeping and reporting requirements apply equally
whether the person who transforms or destroys the substances obtains
them from a producer or an importer.
8. Changes to the Recordkeeping and Reporting Requirements for Entities
Allocated Essential-Use Allowances
EPA is changing the recordkeeping and reporting requirements for
entities allocated essential-use allowances in accordance with a
decision taken by the Parties to the Protocol at the Eighth Meeting in
1996. Decision VIII/9 approved a new reporting format for the
quantities of production and consumption of controlled substances
obtained by Parties under the essential-use authorizations. This
accounting framework, included in annex IV of the document entitled
``Report of the Eighth Meeting of the Parties to the Montreal Protocol
on Substances That Deplete the Ozone Layer'' (UNEP/OzL.Pro.8/12), is
designed to assist the Parties in, among other things, monitoring the
amount of controlled substances acquired through production or through
import under essential-use authorizations.
EPA is adopting the exact format approved by the Parties to the
Protocol
[[Page 41639]]
as an adjustment to the quarterly reporting requirements for each
company allocated essential-use allowances. Under today's action, each
company receiving a letter from EPA that allocates essential-use
allowances for a control period will be required to submit the
information in the Protocol's accounting framework for each quarter.
Much of the information required in the Protocol accounting framework
is currently required under Sec. 82.13(u) of the rule published in the
Federal Register on May 10, 1995.
The Protocol accounting framework for essential uses is designed to
assist the Parties in determining whether quantities of controlled
substances claimed for essential uses are actually being produced or
imported. EPA wishes to ensure that quantities of phased-out controlled
substances that the United States nominates to the Parties as being
essential are fully justified. EPA believes today's requirement that
companies holding essential-use allowances complete the Protocol
accounting framework will ultimately help the United States in making
credible nominations for future years. The accounting framework should
make more apparent the quantity of phased-out controlled substance that
each company obtains by expending its essential-use allowances and the
amount of that material each company then uses in a given year for
accomplishing the specifically designated essential use. To more
accurately track the use of CFCs obtained under the essential-use
exemption, today's requirement requires submission of data on the
number of units of each specific product manufactured in a control
period. A company exhibiting a pattern of holding unexpended essential-
use allowances at the end of control periods, or a company exhibiting a
pattern of holding quantities of controlled substances obtained with
expended essential-use allowances that are not incorporated into the
designated end product during that same control period, may indicate
over-inflated requests for quantities of phased-out controlled
substances. The United States government does not want the appearance
of overinflated requests to jeopardize future approval by the Parties
of requests for essential-use quantities for controlled substances.
The essential-use procedures developed internationally and
domestically are designed to strictly control and limit exceptions to
the production and consumption phaseout of ozone-depleting substances
while at the same time encouraging a transition to a complete phaseout.
EPA believes that, in accordance with the intent of the Decisions taken
by the Parties to the Protocol, each kilogram of a controlled substance
authorized after the phaseout must be justified as being essential. The
U.S. government, and EPA in particular, is committed to working with
U.S. companies to continue to obtain the justified quantities of
phased-out controlled substances for essential uses.
9. Changes to the Reporting Requirement for Distributors of Laboratory
Supplies Under the Global Laboratory Essential-Use Exemption
EPA is making several changes and additions to the current
Sec. 82.13(v) to ease the reporting burden for companies supplying
class I controlled substances under the laboratory essential-use
exemption. EPA will require that companies distributing laboratory
supplies in accordance with the global essential-use exemption in the
current Sec. 82.4(r) (82.4(t) in these amendments), and Appendix G to
Subpart A, maintain as records the certifications from each laboratory
customer for each class I controlled substance ordered in a control
period. EPA will not, however, require that distributors of laboratory
supplies submit the certifications with each quarterly report. Under
today's amendments, distributors of laboratory supplies will continue
to receive certifications from labs that class I controlled substances
are being purchased solely for laboratory and analytical purposes and
are not being used for manufacturing and will not be resold. The
distributor of laboratory supplies will continue to collect the
certifications but will not be required to forward them to EPA. The
distributor of laboratory supplies will continue to report each quarter
the total quantity of each class I controlled substance sold to each
customer under the global essential-use exemption (new Sec. 82.13(x)).
Similarly, the distributor will continue to report each quarter the
quantity of each such substance received from each producer or importer
(new Sec. 82.13(v)). The total quantity reported will reflect the
quantity of each class I controlled substance ordered by all
laboratories during the quarter. Each of the labs ordering a class I
controlled substance will have submitted to the distributor, for the
distributor to maintain in accordance with recordkeeping requirements,
a one-time-per-year certification as in Sec. 82.13(w) of the rule
published in the Federal Register on May 10, 1995 (new Sec. 82.13(y)).
EPA is collecting information on the total quantity of class I
controlled substances produced and imported under the global laboratory
essential-use exemption in order to meet reporting obligations under
the Protocol. In addition, EPA is collecting information on the total
quantity of class I controlled substances sold to labs in order to meet
reporting obligations under the Protocol. EPA believes these
obligations under the Protocol can be met through today's changes while
at the same time reducing the reporting burden for distributors of
laboratory supplies.
With today's action, EPA is permitting companies only distributing
class I controlled substances as reference standards for calibrating
laboratory equipment to request an extension of the reporting
requirement (new Sec. 82.13(z)). EPA is providing that companies
distributing reference standards of class I controlled substances may
write a letter to the Agency requesting to file annual rather than
quarterly reports. The quantities of class I controlled substances
contained in a reference standard for calibrating laboratory analytical
equipment, such as a gas chromatograph, are typically thousandths or
ten thousandths of a kilogram. EPA is creating a process for replacing
the quarterly reporting requirement with an annual reporting
requirement for companies that only sell laboratory reference
standards, because the total quantity of a class I controlled substance
sold by such companies under the global essential-use exemption during
a year will often be less than a kilogram. EPA is creating this process
for lengthening the reporting period for companies that only sell
reference standards of class I controlled substances to ease the
overall reporting burden.
Today's changes are designed to reduce the overall reporting burden
without creating opportunities for abuse of the essential-use exemption
for laboratory and analytical purposes. EPA wishes to note that today's
action does not change the packaging and purity requirements found in
Appendix G for class I controlled substances distributed for laboratory
and analytical purposes under the global essential-use exemption.
III. Miscellaneous Additional Changes
Included with today's revisions are miscellaneous corrections and
minor changes, such as the inclusion of a specific address in the
definition for ``Administrator'' in Sec. 82.3. The rule also includes
corrections in Sec. 82.9(a) regarding Article 5 allowances available to
those producers listed in Sec. 82.5 and in accordance with the Montreal
Protocol. This rule re-publishes an updated Appendix C to Subpart A,
[[Page 41640]]
listing Parties to the Montreal Protocol and its amendments. Also
included are the new Appendix J and Appendix K to Subpart A.
IV. Summary of Supporting Analysis
A. Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Pub.
L. 104-4, establishes requirements for Federal agencies to assess the
effects of their regulatory actions on State, local and tribal
governments and the private sector. Under section 202 of the UMRA, EPA
generally must prepare a written statement, including a cost-benefit
analysis, for proposed and final rules with ``Federal mandates'' that
may result in expenditures by State, local and tribal governments, in
the aggregate, or by the private sector, of $100 million or more in any
one year. If a written statement is required under section 202, section
205 of the UMRA generally requires EPA to identify and consider a
reasonable number of regulatory alternatives and adopt the least
costly, most cost-effective or least burdensome alternative that
achieves the objectives of the rule, unless the Agency explains why
this alternative is not selected or the selection of this alternative
is inconsistent with law.
Section 203 of the UMRA requires the Agency to establish a plan for
obtaining input from and informing, educating, and advising any small
governments that may be significantly or uniquely affected by the rule.
Section 204 of the UMRA requires the Agency to develop a process to
allow elected state, local, and tribal government officials to provide
input in the development of any proposal containing a significant
Federal intergovernmental mandate.
EPA has determined that this rule does not contain a Federal
mandate that may result in expenditures of $100 million or more by
State, local and tribal governments, in the aggregate, or by the
private sector, in any one year. Most of the provisions in today's rule
fulfill the obligations of the United States under the international
treaty, The Montreal Protocol on Substances that Deplete the Ozone
Layer, as well as those requirements specifically set forth by Congress
in sections 604, 606 and 614 of the Clean Air Act Amendments of 1990.
The remainder merely serve to clarify existing regulatory text and
therefore impose no new additional enforceable duties on governmental
entities or the private sector. The majority of the amendments do not
create significant additional costs for either the public or the
private sector because they address various implementation issues
without major changes in policy. Viewed as a whole, all of today's
amendments do not create a Federal mandate resulting in costs of $100
million or more in any one year for State, local and tribal
governments, in the aggregate, or for the private sector. Thus, today's
rule is not subject to the requirements of sections 202 and 205 of the
UMRA. EPA has also determined that this rule contains no regulatory
requirements that might significantly or uniquely affect small
governments; therefore, EPA is not required to develop a plan with
regard to small governments under section 203. Finally, because this
proposal does not contain a significant intergovernmental mandate, the
Agency is not required to develop a process to obtain input from
elected state, local, and tribal officials under section 204.
B. Regulatory Flexibility
The Regulatory Flexibility Act (RFA) generally requires an agency
to conduct a regulatory flexibility analysis of any rule subject to
notice and comment rulemaking requirements unless the agency certifies
that the rule will not have a significant economic impact on a
substantial number of small entities. Small entities include small
businesses, small not-for-profit enterprises, and small governmental
jurisdictions.
The Agency performed an initial screening analysis and determined
that this regulation does not have a significant economic impact on a
substantial number of small entities. EPA characterized the regulated
community by identifying the SIC codes of the companies affected by
this rule. The Agency determined that the members of the regulated
community affected by today's rule are generally not small businesses.
Small governments and small not-for-profit organizations are not
subject to the provisions of today's rule. The provisions in the
accelerated phaseout rule and today's action regulate large,
multinational corporations that either produce, import, export,
transform or destroy ozone-depleting chemicals controlled by this rule.
To the extent that today's actions affect entities other than large,
multinational corporations, there are few that are small entities and
the economic impact is negligible. Thus, today's rule will not have a
significant economic impact on a substantial number of small entities.
The rule includes changes to recordkeeping or reporting requirements.
Those changes included in today's rule that increase reporting burden
only apply to large companies (pharmaceutical companies holding
essential-use allowances). In general, for small entities, the changes
in today's action reduce reporting and recordkeeping.
EPA has determined that it is not necessary to prepare a regulatory
flexibility analysis in connection with this final rule. EPA has also
determined that this rule will not have a significant economic impact
on a substantial number of small entities.
C. Executive Order 12866
Under Executive Order 12866 (58 FR 51735, October 4, 1993), the
Agency must determine whether this regulatory action is ``significant''
and therefore subject to OMB review and the requirements of the
Executive Order. The Order defines a ``significant'' regulatory action
as one that is likely to result in a rule that may:
(1) have an annual effect on the economy of $100 million or more,
or adversely affect in a material way the economy, a sector of the
economy, productivity, competition, jobs, the environment, public
health or safety, or State, local, or tribal governments or
communities;
(2) create a serious inconsistency or otherwise interfere with an
action taken or planned by another agency;
(3) materially alter the budgetary impact of entitlements, grants,
user fees, or loan programs or the rights and obligations of recipients
thereof; or
(4) raise novel legal or policy issues arising out of legal
mandates, the President's priorities, or the principles set forth in
the Executive Order.
It has been determined by EPA and OMB that this rule is not a
``significant regulatory action'' within the meaning of the Executive
Order.
D. Applicability of E.O. 13045 Children's Health Protection
This rule is not subject to E.O. 13045, entitled ``Protection of
Children from Environmental Health Risks and Safety Risks'' (62 FR
19885, April 23, 1997), because it does not involve decisions on
environmental health risks or safety risks that may disproportionately
affect children.
E. Paperwork Reduction Act
The revised information collection requirements in these amendments
have been submitted for approval to OMB under the Paperwork Reduction
Act, 44 U.S.C. 3501 et seq. An Information Collection Request (ICR)
document has been prepared by EPA (ICR No. 1432.17) and a copy may be
obtained from Sandy Farmer by mail at OPPE Regulatory Information
Division; U.S. Environmental Protection Agency (2137); 401 M St., SW.,
Washington, DC
[[Page 41641]]
20460, by email at [email protected], or by calling (202)
260-2740. A copy may also be downloaded off the internet at http://
www.epa.gov/icr. The additional information requirements in these
amendments are not effective until OMB approves them.
The information collection under this rule is authorized under
sections 603(b) and 114 of the Clean Air Act Amendments of 1990 (CAA).
This information collection is conducted to meet U.S. obligations under
Article 7, Reporting Requirements, of the Montreal Protocol on
Substances that Deplete the Ozone Layer (Protocol); and to carry out
the requirements of Title VI of the CAA, including sections 603 and
614.
The reporting requirements included in the amendments to the
current rule are designed to:
(1) Ensure compliance with the restrictions on production, import
and export of controlled ozone-depleting substances after the phaseout
of class I substances (except methyl bromide) after January 1, 1996;
(2) Allow exempted production and import for certain essential uses
and the consequent tracking of that production and import;
(3) Address industry and Federal concerns regarding the illegal
import of mislabelled used controlled substances that are claimed to be
undercutting U.S. markets;
(4) Respond to industry comments on the functioning of the program
to streamline reporting and eliminate administrative inefficiencies;
(5) Satisfy U.S. obligations under the international treaty, the
Montreal Protocol on Substances that Deplete the Ozone Layer
(Protocol), to report data under Article 7;
(6) Fulfill statutory obligations under Section 603(b) of Title VI
of the Clean Air Act Amendments of 1990 (CAA) for reporting and
monitoring;
(7) Provide information to report to Congress on the production,
use and consumption of class I and class II controlled substances as
statutorily required in Section 603(d) of Title VI of the CAA.
EPA informs respondents that they may assert claims of business
confidentiality for any of the information they submit. Information
claimed confidential will be treated in accordance with the procedures
for handling information claimed as confidential under 40 CFR Part 2,
Subpart B, and will be disclosed only if EPA determines that the
information is not entitled to confidential treatment. If no claim of
confidentiality is asserted when the information is received by EPA, it
may be made available to the public without further notice to the
respondents (40 CFR 2.203).
The information collection requirements for this action have an
estimated reporting burden averaging 23.3 hours per response. This
estimate includes time for reviewing instructions, searching existing
data sources, gathering and maintaining the data needed and completing
the collection of information.
The estimate includes the time needed to comply with EPA's
reporting requirements, as well as that used for the completion of the
reports under the amended regulations.
----------------------------------------------------------------------------------------------------------------
Number of Responses/ Total Hours per
Collection activity respondents respondent responses response Total hours
----------------------------------------------------------------------------------------------------------------
Producer's Report.............................. 8 4 32 16 512
Importer's Report.............................. 12 4 48 16 768
Notification of Trade.......................... 2 1 2 2 4
Export Report.................................. 10 1 10 80 800
Lab Certification.............................. 1000 1 1000 1 1000
Class II Report................................ 14 4 56 16 896
Transformation & Destruction................... 15 1 15 80 1200
Essential Use Allowance Holders................ 12 4 48 32 1536
Lab Suppliers.................................. 4 4 16 24 384
Lab Suppliers--Reference Standards............. 10 1 10 16 160
----------------------------------------------------------------
Total burden hrs......................... ........... ........... ........... ........... 7260
----------------------------------------------------------------------------------------------------------------
Burden means the total time, effort, or financial resources
expended by persons to generate, maintain, retain, or disclose or
provide information to or for a Federal agency. This includes the time
needed to review instructions; develop, acquire, install, and utilize
technology and systems for the purposes of collecting, validating, and
verifying information, processing and maintaining information, and
disclosing and providing information; adjust the existing ways to
comply with any previously applicable instructions and requirements;
train personnel to be able to respond to a collection of information;
search data sources; complete and review the collection of information;
and transmit or otherwise disclose the information.
An Agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information unless it displays a
currently valid OMB control number. The OMB control numbers for EPA's
regulations are listed in 40 CFR Part 9 and 48 CFR Chapter 15.
Send comments on the Agency's need for this information, the
accuracy of the provided burden estimates, and any suggested methods
for minimizing respondent burden, including through the use of
automated collection techniques to the Director, OPPE Regulatory
Information Division; U.S. Environmental Protection Agency (2137); 401
M St., SW; Washington, DC 20460; and to the Office of Information and
Regulatory Affairs, Office of Management and Budget, 725 17th St., NW,
Washington, DC 20503, marked ``Attention: Desk Officer for EPA.''
Include the ICR number in any correspondence.
F. Executive Order 12875
Today's action does not impose any unfunded mandate upon any State,
local, or tribal government; therefore, Executive Order 12875 does not
apply to this rulemaking.
G. Submission to Congress and the General Accounting Office
The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the
Small Business Regulatory Enforcement Fairness Act of 1996, generally
provides that before a rule may take effect, the agency promulgating
the rule must submit a rule report, which includes a copy of the rule,
to each House of the Congress and to the Comptroller General of the
United States. EPA will submit a
[[Page 41642]]
report containing this rule and other required information to the U.S.
Senate, the U.S. House of Representatives, and the Comptroller General
of the United States prior to publication of the rule in the Federal
Register. This rule is not a ``major rule'' as defined by 5 U.S.C.
804(2).
List of Subjects in 40 CFR Part 82
Environmental protection, Administrative practice and procedure,
Air pollution control, Chemicals, Chlorofluorocarbons, Exports,
Hydrochlorofluorocarbons, Imports, Ozone layer, Reporting and
recordkeeping requirements.
Dated: July 17, 1998.
Carol M. Browner,
Administrator.
40 CFR part 82 is amended as follows:
PART 82--PROTECTION OF STRATOSPHERIC OZONE
1. The authority citation for part 82 continues to read as follows:
Authority: 42 U.S.C. 7414, 7601, 7671-7671q.
Subpart A--Production and Consumption Controls
2. Section 82.1 is revised to read as follows:
Sec. 82.1 Purpose and scope.
(a) The purpose of the regulations in this subpart is to implement
the Montreal Protocol on Substances that Deplete the Ozone Layer and
sections 602, 603, 604, 605, 606, 607, 614 and 616 of the Clean Air Act
Amendments of 1990, Public Law 101-549. The Protocol and section 604
impose limits on the production and consumption (defined as production
plus imports minus exports, excluding transhipments and used controlled
substances) of certain ozone-depleting substances, according to
specified schedules. The Protocol also requires each nation that
becomes a Party to the agreement to impose certain restrictions on
trade in ozone-depleting substances with non-Parties.
(b) This subpart applies to any person that produces, transforms,
destroys, imports or exports a controlled substance or imports or
exports a controlled product.
Sec. 82.2 [Removed and reserved]
3. Section 82.2 is removed and reserved.
4. Section 82.3 is amended by adding new definitions in
alphabetical order for the terms ``Confer'', ``Individual Shipment'',
``Montreal Anniversary Amendments'', ``National Security Allowances'',
``Non-Objection Notice'', and ``Source Facility'' and revising
definitions in alphabetical order for ``Administrator'',
``Destruction'', ``Importer'', ``Nations complying with, but not
joining, the Protocol'', ``Transhipment'', and ``Unexpended Essential-
Use Allowances''.
Sec. 82.3 Definitions.
As used in this subpart, the term:
Administrator means the Administrator of the United States
Environmental Protection Agency or his authorized representative. For
purposes of reports and petitions, the Administrator must be written at
the following mailing address: EPA (6205J), Stratospheric Protection
Division, 401 M Street, SW, Washington, DC 20460.
* * * * *
Confer means to shift the essential-use allowances obtained under
Sec. 82.4(u) from the holder of the unexpended essential-use allowance
to a person for the production of a specified controlled substance, or
to shift the destruction and transformation credits obtained under
Sec. 82.9(f) from the holder of the unexpended destruction and
transformation credits to a person for the production of a specified
controlled substance.
* * * * *
Destruction means the expiration of a controlled substance to the
destruction efficiency actually achieved, unless considered completely
destroyed as defined in this section. Such destruction does not result
in a commercially useful end product and uses one of the following
controlled processes approved by the Parties to the Protocol:
(1) Liquid injection incineration;
(2) Reactor cracking;
(3) Gaseous/fume oxidation;
(4) Rotary kiln incineration;
(5) Cement kiln;
(6) Radio frequency plasma; or
(7) Municipal waste incinerators only for the destruction of foams.
* * * * *
Importer means the importer of record listed on U.S. Customs
Service forms for imported controlled substances, used controlled
substances or controlled products.
Individual shipment means the kilograms of a used controlled
substance for which a person may make one (1) U.S. Customs entry, not
to be dis-aggregated, as identified in the non-objection letter from
the Administrator under Sec. 82.13(g).
* * * * *
Montreal Anniversary amendments means the Montreal Protocol, as
amended at the Ninth Meeting of the Parties to the Montreal Protocol in
Montreal in 1997.
National Security allowances means the privileges granted by this
subpart to produce or import class II controlled substances until
January 1, 2015, as determined by the Administrator in accordance with
Sec. 82.9(g).
Nations complying with, but not joining, the Protocol means any
nation listed in Appendix C, Annex 2, to this subpart.
Non-objection notice means the privilege granted by the
Administrator to import a specific individual shipment of used
controlled substance in accordance with Sec. 82.13(g).
* * * * *
Source facility means the exact location from which a used
controlled substance was recovered from a piece of equipment, including
the name of the company responsible for, or owning the location, a
contact person at the location, the mailing address for that specific
location, as well as a phone number and a fax number for the contact
person at the location.
* * * * *
Transhipment means the continuous shipment of a controlled
substance, from a foreign state of origin through the United States or
its territories, to a second foreign state of final destination, as
long as the shipment does not enter into United States jurisdiction. A
transhipment, as it moves through the United States or its territories,
cannot be re-packaged, sorted or otherwise changed in condition.
* * * * *
Unexpended essential-use allowances means essential-use allowances
that have not been used. At any time in any control period a person's
unexpended essential-use allowances are the total of the level of
essential-use allowances the person has authorization under this
subpart to hold at that time for that control period, minus the level
of controlled substances that the person has imported or had produced
in that control period until that time.
* * * * *
5. Section 82.4 is amended by revising paragraphs (d), (e), by
redesignating paragraphs (l) through (s) as (n) through (u) and
redesignating paragraphs (f) through (k) as (g) through (l); by
revising newly designated paragraph, (j), (t), and by adding paragraphs
(f), (m), (l)(4), (t)(3), and (u)(3) to read as follows:
Sec. 82.4 Prohibitions.
* * * * *
(d) Effective January 1, 1996, for any class I, Group I, Group II,
Group III,
[[Page 41643]]
Group IV, Group V, or Group VII controlled substances, no person may
import (except for transhipments or heels), at any time in any control
period, (except for controlled substances that are transformed or
destroyed) in excess of the amount of unexpended essential-use
allowances or exemption as allocated under this section, or the amount
of unexpended destruction and transformation credits obtained under
Sec. 82.9, held by that person under the authority of this subpart at
that time for that control period. Every kilogram of excess importation
(other than transhipments or heels) constitutes a separate violation of
this subpart.
(e) Effective January 1, 1996, no person may place an order by
conferring essential-use allowances for the production of the class I
controlled substance, at any time in any control period, in excess of
the amount of unexpended essential-use allowances, held by that person
under the authority of this subpart at that time for that control
period. Effective January 1, 1996, no person may import a class I
controlled substance with essential-use allowances, at any time in any
control period, in excess of the amount of unexpended essential-use
allowances, held by that person under the authority of this subpart at
that time for that control period. No person may import or place an
order for the production of a class I controlled substance with
essential-use allowances, at any time in any control period, other than
for the class I controlled substance(s) for which they received
essential-use allowances under paragraph (u) of this section. Every
kilogram of excess production ordered in excess of the unexpended
essential-use allowances conferred to the producer constitutes a
separate violation of this subpart. Every kilogram of excess import in
excess of the unexpended essential-use allowances held at that time
constitutes a separate violation of this subpart.
(f) Effective January 1, 1996, no person may place an order by
conferring transformation and destruction credits for the production of
the class I controlled substance, at any time in any control period, in
excess of the amount of transformation and destruction credits, held by
that person under the authority of this subpart at that time for that
control period. Effective January 1, 1996, no person may import class I
controlled substance, at any time in any control period, in excess of
the amount of transformation and destruction credits, held by that
person under the authority of this subpart at that time for that
control period. No person may import or place an order for the
production of a class I controlled substance with transformation and
destruction credits, at any time in any control period, other than for
the class I controlled substance(s) for which they received
transformation and destruction credits as under Sec. 82.9(f). Every
kilogram of excess production ordered in excess of the unexpended
transformation and destruction credits conferred to the producer
constitutes a separate violation of this subpart. Every kilogram of
excess import in excess of the unexpended transformation and
destruction credits held at that time constitutes a separate violation
of this subpart.
* * * * *
(j) Effective January 1, 1995, no person may import, at any time in
any control period, a used class I controlled substance, without having
received a non-objection notice from the Administrator in accordance
with Sec. 82.13(g)(2) and (3). A person issued a non-objection notice
for the import of an individual shipment of used controlled substances
may not transfer or confer the right to import, and may not import any
more than the exact quantity, in kilograms, of the used controlled
substance cited in the non-objection notice. Every kilogram of
importation of used controlled substance in excess of the quantity
cited in the non-objection notice issued by the Administrator in
accordance with Sec. 82.13(g)(2) and (3) constitutes a separate
violation.
* * * * *
(l) * * *
(4) Import or export any quantity of a controlled substance listed
in Class I, Group VII, in Appendix A to this subpart, from or to any
foreign state not Party to the Copenhagen Amendments (as noted in
Appendix C, Annex l, to this subpart), unless that foreign state is
complying with the Copenhagen Amendments (as noted in Appendix C, Annex
2, to this subpart.
(m) Effective October 5, 1998, no person may export a controlled
product to a Party listed in Appendix J of this subpart in any control
period after the control period in which EPA publishes a notice in the
Federal Register listing that Party in Appendix J of this subpart. EPA
will publish a notice in the Federal Register that lists a Party in
Appendix J if the Party formally presents to the U.S. a government
document through its embassy in the United States stating that it has
established a ban on the import of controlled products and a ban on the
manufacture of those same controlled products.
* * * * *
(t) Effective January 1, 1996, essential-use allowances are
apportioned to a person under paragraph (t)(2) of this section for the
exempted production or importation of specified class I controlled
substances solely for the purposes listed in paragraphs (t)(1)(i) and
(ii) of this section. Effective October 5, 1998 production and
importation of class I controlled substances for the purposes listed in
paragraph (t)(1)(iii) of this section are exempted as an essential use
if conducted in accordance with requirements in Sec. 82.13(v) through
(z) and Appendix G to subpart A.
* * * * *
(3) Effective for the 1999 control period and thereafter, EPA will
allocate essential-use allowances for quantities of a specific class I
controlled substance by means of a confidential letter to each person
nominated by the United States to the UNEP Ozone Secretariat of the
Montreal Protocol and approved by the Parties for an essential use
exemption for the control period in question. EPA will thereafter
publish a notice in the Federal Register of the allocations made for
the control period in question.
(u) The following exemptions apply to the production and
consumption restrictions under paragraphs (n), (o), and (p), of this
section:
* * * * *
(3) National security interests--A person may obtain national
security allowances to produce HCFC-141b after January 1, 2003, as an
exemption to paragraph (n) of this section, only for specific purposes
deemed by the Administrator to be national security interests in
accordance with the procedures in Sec. 82.9. A person may obtain
national security allowances to import HCFC-141b after January 1, 2003,
as an exemption to paragraph (o) of this section, only for specific
purposes deemed by the Administrator to be national security interests
in accordance with the procedures in Sec. 82.9. No person may produce
or import a class II controlled substance under this paragraph on or
after January 1, 2030.
6. Section 82.9 is amended by revising the section heading and
paragraphs, (a) and (c), and adding paragraph (g) to read as follows:
Sec. 82.9 Availability of allowances in addition to baseline
production allowances.
(a) Every person apportioned baseline production allowances for
class I controlled substances under Sec. 82.5 (a) through (f) of this
subpart is also granted Article 5 allowances equal to:
(1) 10 percent of their baseline production allowances listed for
class I, Group I, Group III, Group IV, and Group V controlled
substances listed under
[[Page 41644]]
Sec. 82.5 of this subpart for each control period ending before January
1, 1996;
(2) 10 percent of their baseline production allowances for class I,
Group VI controlled substances listed under Sec. 82.5 of this subpart
for each control period ending before January 1, 2001;
(3) 15 percent of their baseline production allowances for class I,
Group II controlled substances listed under Sec. 82.5 of this subpart
for each control period beginning January 1, 1994, until January 1,
2003;
(4) 15 percent of their baseline production allowances for class I,
Group I, Group III, Group IV, and Group V controlled substances listed
under Sec. 82.5 of this subpart for each control period beginning
January 1, 1996, until January 1, 2010; and
(5) 15 percent of their baseline production allowances for class I,
Group VI controlled substances listed under Sec. 82.5 of this subpart
for each control period beginning January 1, 2005, until January 1,
2015.
* * * * *
(c) A company may increase or decrease its production allowances or
its Article 5 allowances by trading with another Party to the Protocol
according to the provision under this paragraph (c). A nation listed in
Appendix C to this subpart (Parties to the Montreal Protocol) must
agree either to transfer to the person for the current control period
some amount of production that the nation is permitted under the
Montreal Protocol or to receive from the person for the current control
period some amount of production that the person is permitted under
this subpart. If the controlled substance is to be returned to the
Party from whom production allowances are received, the request for
production allowances shall also be considered a request for
consumption allowances under Sec. 82.10(c). If the controlled substance
is to be sold in the United States or to another Party (not the Party
from whom the allowances are received), the U.S. company must expend
its consumption allowances allocated under Sec. 82.6 and Sec. 82.7 in
order to produce with the additional production allowances.
(1) For trades from a Party, the person must obtain from the
principal diplomatic representative in that nation's embassy in the
United States a signed document stating that the appropriate authority
within that nation has established or revised production limits for the
nation to equal the lesser of the maximum production that the nation is
allowed under the Protocol minus the amount transferred, the maximum
production that is allowed under the nation's applicable domestic law
minus the amount transferred, or the average of the nation's actual
national production level for the three years prior to the transfer
minus the production transferred. The person must submit to the
Administrator a transfer request that includes a true copy of this
document and that sets forth the following:
(i) The identity and address of the person;
(ii) The identity of the Party;
(iii) The names and telephone numbers of contact persons for the
person and for the Party;
(iv) The chemical type and level of production being transferred;
(v) The control period(s) to which the transfer applies; and
(vi) For increased production intended for export to the Party from
whom the allowances would be received, a signed statement of intent to
export to the Party.
(2) For trades to a Party, a person must submit a transfer request
that sets forth the following:
(i) The identity and address of the person;
(ii) The identity of the Party;
(iii) The names and telephone numbers of contact persons for the
person and for the Party;
(iv) The chemical type and level of allowable production to be
transferred; and
(v) The control period(s) to which the transfer applies.
(3) After receiving a transfer request that meets the requirements
of paragraph (c)(2) of this section, the Administrator may, at his
discretion, consider the following factors in deciding whether to
approve such a transfer:
(i) Possible creation of economic hardship;
(ii) Possible effects on trade;
(iii) Potential environmental implications; and
(iv) The total amount of unexpended production allowances held by
United States entities.
(4) The Administrator will issue the person a notice either
granting or deducting production allowances or Article 5 allowances and
specifying the control period to which the transfer applies, provided
that the request meets the requirement of paragraph (c)(1) of this
section for trades from Parties and paragraphs (c)(2) of this section
for trades to Parties, unless the Administrator has decided to
disapprove the trade under paragraph (c)(3) of this section for trades
to Parties. For a trade from a Party, the Administrator will issue a
notice that revises the allowances held by the person to equal the
unexpended production allowances or Article 5 allowances held by the
person under this subpart plus the level of allowable production
transferred from the Party. For a trade to a Party, the Administrator
will issue a notice that revises the production limit for the person to
equal the lesser of:
(i) The unexpended production allowances or Article 5 allowances
held by the person under this subpart minus the amount transferred; or
(ii) The unexpended production allowances or Article 5 allowances
held by the person under this subpart minus the amount by which the
United States average annual production of the controlled substance
being traded for the three years prior to the transfer is less than the
total allowable production allowable for that substance under this
subpart minus the amount transferred. The change in allowances will be
effective on the date that the notice is issued.
(5) If after one person obtains approval for a trade of allowable
production of a controlled substance to a Party, one or more other
persons obtain approval for trades involving the same controlled
substance and the same control period, the Administrator will issue
notices revising the production limits for each of the other persons
trading that controlled substance in that control period to equal the
lesser of:
(i) The unexpended production allowances or Article 5 allowances
held by the person under this subpart minus the amount transferred; or
(ii) The unexpended production allowances or Article 5 allowances
held by the person under this subpart minus the amount by which the
United States average annual production of the controlled substance
being traded for the three years prior to the transfer is less than the
total allowable production for that substance under this subpart
multiplied by the amount transferred divided by the total amount
transferred by all the other persons trading the same controlled
substance in the same control period minus the amount transferred by
that person.
(iii) The Administrator will also issue a notice revising the
production limit for each person who previously obtained approval of a
trade of that substance in that control period to equal the unexpended
production allowances or unexpended Article 5 allowances held by the
person under this subpart plus the amount by which the United States
average annual production of the controlled substance being traded for
the three years prior to the transfer is
[[Page 41645]]
less than the total allowable production under this subpart multiplied
by the amount transferred by that person divided by the amount
transferred by all of the persons who have traded that controlled
substance in that control period. The change in production allowances
or Article 5 allowances will be effective on the date that the notice
is issued.
* * * * *
(g) Effective October 5, 1998, and until December 31, 1999, an
agency, department, or instrumentality of the United States may
petition the Administrator for national security allowances for HCFC-
141b in accordance with Sec. 82.4(v) and as an exemption to
prohibitions in Secs. 82.4(o) through 82.4(p) by submitting the
following:
(1) Name and address of U.S. government national security entity;
name of contact person and phone and fax numbers and e-mail address;
(2) Quantity (in kilograms) of HCFC-141b needed for the control
period for the national security interest;
(3) A description of the national security interest met by the use
of HCFC-141b;
(4) A technical description of the use of HCFC-141b;
(5) A technical description of why alternatives and substitutes are
not sufficient to eliminate the national security use of HCFC-141b; and
(6) A detailed analysis showing why stockpiled, recovered or
recycled quantities are deemed to be technically and economically
infeasible for use.
(i) Effective October 5, 1998, the Administrator will issue an
agency, department, or instrumentality of the United States national
security allowances for HCFC-141b that the Administrator determines are
necessary to national security interests based on information received
in accordance with paragraph (g) of this section. The Administrator may
decide not to grant national security allowances if: the national
security interest can be met by the use of a substance other than HCFC-
141b; the national security interest can be met by the use of existing
supplies of HCFC-141b; there is evidence of fraud or misrepresentation;
approval of the allowances would be inconsistent with the Montreal
Protocol or Decisions of the Parties; approval of the allowances would
be inconsistent with the Clean Air Act Amendments of 1990; or approval
of the allowances may reasonably be expected to endanger public health
or welfare. The grant of national security allowances will be effective
on the date that the notice specified in paragraph (g)(2) of this
section is issued.
(ii) Effective October 5, 1998, if the Administrator decides not to
grant the request for national security allowances for any of the
reasons stated in paragraph (g)(1) of this section, the Administrator
will issue an objection letter disallowing the request for national
security allowances. Within ten working days after receipt of the
objection letter, the requestor may file a one-time petition of appeal,
with supporting reasons, with the Administrator. The Administrator may
affirm the disallowance or grant an allowance, as she/he finds
appropriate in light of the available evidence. If no appeal is taken
by the tenth day after receipt of the objection letter, the
disallowance will be final on that day.
7. Section 82.12 is amended by adding paragraph (a)(3) to read as
follows:
Sec. 82.12 Transfers.
(a) * * *
(3) A person holding essential-use allowances for class I, Group I
controlled substances for metered-dose inhalers (MDIs) may increase or
decrease their essential-use allowances in an emergency situation by
trading with another Party to the Protocol according to the provisions
under this paragraph (a)(3). A nation listed in Appendix C to this
subpart (Parties to the Montreal Protocol) must agree either to
transfer to the person for a specified control period some amount of
their essential-use authorizations for MDIs that the nation is
permitted under the Montreal Protocol or to receive from the person for
a specified control period some amount of essential-use allowances that
the person is permitted under this subpart.
(i) For trades from a Party or to a Party, the person must submit
to the Administrator a request to revise and transfer essential-use
authorizations that sets forth the following:
(A) The identity and address of the person;
(B) The identity of the Party;
(C) The names, telephone and fax numbers of contact persons for the
person and for the Party;
(D) The chemical type and level of essential-use authorizations
being transferred;
(E) The control period(s) to which the transfer applies;
(F) Documentation and analysis confirming the emergency situation
due to a catastrophic natural event or war regarding the manufacture of
MDIs, (if the situation exists in a foreign state, a signed document
from the principal diplomatic representative in that nation's embassy
in the United States introducing a letter from the authority within
that foreign state responsible for health and a letter from the
authority within that foreign state responsible for environmental
international agreements certifying an emergency situation due to a
catastrophic natural event or war and agreeing to a transfer of
essential-use authorizations);
(G) Documentation and analysis that demonstrates the emergency
situation seriously threatens the treatment of patients with asthma or
Chronic Obstructive Pulmonary Disease (COPD), (if the situation exists
in a foreign state, a signed document from the principal diplomatic
representative in that nation's embassy in the United States
introducing a letter from the authority within that foreign state
responsible for health and a letter from the authority within that
foreign state responsible for environmental international agreements
certifying an emergency situation that seriously threatens the
treatment of patients with asthma or COPD and agreeing to a transfer of
essential-use authorizations); and
(H) A certification of the accuracy of the information submitted.
(ii) After receiving a transfer request that meets the requirements
of paragraph (a)(3) of this section, the Administrator may, at her/his
discretion, consider the following factors in deciding whether to
approve such a transfer:
(A) Information sufficient to make a determination regarding
whether the situation is an emergency due to a catastrophic natural
event or war;
(B) Possible serious threats to the treatment of patients with
asthma and COPD;
(C) Possible creation of economic hardship;
(D) Possible effects on trade;
(E) Potential environmental implications; and
(F) The total amount of unexpended essential-use allowances held by
United States entities.
(iii) The Administrator will issue a notice to the UNEP Ozone
Secretariat, through the U.S. Department of State, agreeing with the
transfer of essential-use authorizations and specifying the control
period to which the transfer applies, provided that the request meets
the requirement of paragraph (a)(3)(i), of this section for trades from
Parties or trades to Parties, unless the Administrator has decided to
disapprove the trade under paragraph (a)(3)(ii) of this section. For an
approved trade from a Party, the Administrator will issue a letter that
revises the
[[Page 41646]]
essential-use allowances held by the person to equal the unexpended
essential-use allowances held by the person under this subpart plus the
amount of essential-use authorizations transferred from the Party for
the specific control period. For an approved trade to a Party, the
Administrator will issue a notice that revises the essential-use
allowances held by the person to equal the unexpended essential-use
allowances held by the person under this subpart minus the amount of
essential-use authorizations transferred to the Party for the specific
control period.
* * * * *
8. Section 82.13 is amended by revising paragraphs (b), (f)(1)(iv),
(f)(2) introductory text, (f)(2) (xiv), and (f)(2)(xvi), by adding
(f)(2)(xvii), by removing paragraph (f)(3)(v) and redesignating
(f)(3)(vi) through (xiii) as (f)(3)(v) through (xii), and revising
newly designated (f)(3)(xi) through (xiii), by revising paragraphs
(g)(1)(vii), (g)(1)(xvi), (g)(2) and the first (g)(3), by adding
paragraph (g)(1)(xvii), by redesignating the second (g)(3) ``Reporting
Requirements--Importers,'' as (g)(4) and revising the newly designated
(g)(4)(iii) and (xiii), by adding paragraphs (g)(4)(xiv) and
(g)(4)(xv), by revising paragraphs (h)(8), (i) introductory text, (m),
(u), (v), and redesignating paragraph (w) as paragraph (y), and adding
paragraphs (w), (x) and (z) to read as follows:
Sec. 82.13 Recordkeeping and reporting requirements.
* * * * *
(b) Reports and records required by this section may be used for
purposes of compliance determinations. These requirements are not
intended as a limitation on the use of other evidence admissible under
the Federal Rules of Evidence. Failure to provide the reports,
petitions and records required by this section, and to certify the
accuracy of the information in the reports, petitions and records
required by this section, will be considered a violation of this
subpart. False statements made in reports, petitions and records will
be considered violations of Section 113 of the Clean Air Act.
* * * * *
(f) * * *
(1) * * *
(iv) The quantity of any fugitive losses accounted for in the
production figures; and
* * * * *
(2) Every producer of a class I or class II controlled substance
during a control period must maintain the following records:
* * * * *
(xiv) Written verifications that essential-use allowances were
conveyed to the producer for the production of specified quantities of
a specific controlled substance that will only be used for the named
essential-use and not resold or used in any other manufacturing
process.
* * * * *
(xvi) Written verifications from a U.S. purchaser that the
controlled substance was exported to an Article 5 country in cases when
Article 5 allowances were expended during production; and
(xvii) Written certifications that the quantities of controlled
substances purchased will be used as a process agent in accordance with
the definition of controlled substance in Sec. 82.3.
* * * * *
(3) * * *
(xi) The certifications from essential-use allowance holders
stating that the controlled substances were purchased solely for
specified essential uses and will not be resold or used in any other
manufacturing process;
(xii) In the case of laboratory essential uses, a certification
from distributors of laboratory supplies that controlled substances
were purchased for sale to laboratory customers who certify that the
substances will only be used for laboratory applications and will not
be resold or used in manufacturing; or, if sales are made directly to
laboratories, certifications from laboratories that the controlled
substances will only be used for laboratory applications and will not
be resold or used in manufacturing; and
(xiii) The certifications from purchasers of controlled substances
that the controlled substance will be used as a process agent in
accordance with the definition of controlled substance in Sec. 82.3.
* * * * *
(g) * * *
(1) * * *
(vii) The commodity code for the controlled substances shipped,
which must be one of those listed in Appendix K to this subpart;
* * * * *
(xvi) Copies of certifications that imported controlled substances
are being purchased for essential laboratory and analytical
applications or being purchased for eventual sale to laboratories that
certify the controlled substances are for essential laboratory
applications.
(xvii) Written certifications that the quantities of controlled
substances purchased will be used as a process agent in accordance with
the definition of controlled substance in Sec. 82.3.
* * * * *
(2) Petitioning--importers of used, recycled or reclaimed
controlled substances. For each individual shipment (not to be
aggregated) over 5 pounds of a used controlled substance as defined in
Sec. 82.3, an importer must submit directly to the Administrator, at
least 40 working days before the shipment is to leave the foreign port
of export, the following information in a petition:
(i) The name and quantity in kilograms of the used controlled
substance to be imported;
(ii) The name and address of the importer, the importer ID number,
the contact person, and the phone and fax numbers;
(iii) Name, address, contact person, phone number and fax number of
all previous source facilities from which the used controlled substance
was recovered;
(iv) A detailed description of the previous use of the controlled
substance at each source facility and dated documents indicating the
date the material was put into the equipment at each source facility
(material must have remained in the equipment at least 24 months prior
to recovery to be considered previously used);
(v) A list of the name, make and model number of the equipment from
which the material was recovered at each source facility;
(vi) Name, address, contact person, phone number and fax number of
the exporter and of all persons to whom the material was transferred or
sold after it was recovered from the source facility;
(vii) The U.S. port of entry for the import, the expected date of
shipment and the vessel transporting the chemical. If at the time of
submitting a petition the importer does not know the U.S. port of
entry, the expected date of shipment and the vessel transporting the
chemical, and the importer receives a non-objection notice for the
individual shipment in the petition, the importer is required to notify
the Administrator of this information prior to the actual U.S. Customs
entry of the individual shipment;
(viii) A description of the intended use of the used controlled
substance, and a copy of the contract for the purchase of the
controlled substance that includes the name, address, contact person,
phone number and fax number of the purchaser;
(ix) The name, address, contact person, phone number and fax number
of the U.S. reclamation facility, where applicable;
[[Page 41647]]
(x) If someone at the source facility recovered the controlled
substance from the equipment, the name and phone and fax numbers of
that person;
(xi) If the imported controlled substance was reclaimed in a
foreign Party, the name, address, contact person, phone number and fax
number of any or all foreign reclamation facility(ies) responsible for
reclaiming the cited shipment;
(xii) An export license from the appropriate government agency in
the country of export and, if recovered in another country, the export
license from the appropriate government agency in that country;
(xiii) If the imported used controlled substance is intended to be
sold as a refrigerant in the U.S., the name and address of the U.S.
reclaimer who will bring the material to the standard required under
section 608 (Sec. 82.152(g)) of the CAA, if not already reclaimed to
those specifications; and
(xiv) A certification of accuracy of the information submitted in
the petition.
(3) Starting on the first working day following receipt by the
Administrator of a petition to import a used class I controlled
substance, the Administrator will initiate a review of the information
submitted under paragraph (g)(2) of this section and take action within
40 working days to issue either an objection-notice or a non-objection
notice for the individual shipment to the person who submitted the
petition to import the used class I controlled substance.
(i) For the reasons listed in this paragraph, the Administrator may
issue an objection notice to a petition:
(A) If the Administrator determines that the information is
insufficient, that is, if the petition lacks or appears to lack any of
the information required under paragraph (g)(2) of this section;
(B) If the Administrator determines that any portion of the
petition contains false or misleading information or has reason to
believe that the petition contains false or misleading information;
(C) If the importer wishes to import a used class I controlled
substance from a country which is, for that particular controlled
substance, out of compliance regarding its phaseout obligations under
the Protocol or the transaction in the petition is contrary to other
provisions in the Vienna Convention or the Montreal Protocol;
(D) If the appropriate government agency in the exporting country
has not agreed to issue an export license for the cited individual
shipment of used controlled substance;
(E) If allowing the import of the used class I controlled substance
would run counter to the spirit of statements made by government
officials in the country of recovery or export regarding controlled
ozone-depleting substances;
(F) If the Administrator has received information indicating that a
person listed in the petition has at any time been willing to produce
false information regarding trade in controlled substances, including
information required by EPA or required by the appropriate government
agency in the exporting country;
(G) If the Administrator has received information indicating that a
person listed in the petition is in violation of a requirement in any
regulation published by the U.S. Environmental Protection Agency;
(H) If the Administrator determines that, for the current control
period, the U.S. demand for the controlled substance cited in the
petition can be satisfied by domestic stockpiles and estimated
recycling and reclamation of quantities contained in domestic
equipment; or
(I) If reclamation capacity is installed or is being installed for
that specific controlled substance in the country of recovery or
country of export and the capacity is funded in full or in part through
the Multilateral Fund.
(ii) Within ten (10) working days after receipt of the objection
notice, the importer may re-petition the Administrator, only if the
Administrator indicated ``insufficient information'' as the basis for
the objection notice. If no appeal is taken by the tenth working day
after the date on the objection notice, the objection shall become
final. Only one appeal of re-petition will be accepted for any petition
received by EPA.
(iii) Any information contained in the re-petition which is
inconsistent with the original petition must be identified and a
description of the reason for the inconsistency must accompany the re-
petition.
(iv) In cases where the Administrator has no reason to object to
the petition based on the criteria listed in paragraph (g)(3)(i) of
this section, the Administrator will issue a non-objection notice.
(v) To pass the approved used class I controlled substances through
U.S. Customs, the petition and the non-objection notice issued by EPA
must accompany the shipment through U.S. Customs.
(vi) If for some reason, following EPA's issuance of a non-
objection notice, new information is brought to EPA's attention which
shows that the non-objection notice was issued based on false
information, then EPA has the right to:
(A) Revoke the non-objection notice;
(B) Pursue all means to ensure that the controlled substance is not
imported into the United States; and
(C) Take appropriate enforcement actions.
(vii) Once the Administrator issues a non-objection notice, the
person receiving the non-objection notice is required to import the
individual shipment of used class I controlled substance within the
same control period as the date stamped on the non-objection notice.
(viii) A person receiving a non-objection notice from the
Administrator for a petition to import used class I controlled
substances must maintain the following records:
(A) A copy of the petition;
(B) The EPA non-objection notice;
(C) The bill of lading for the import; and
(D) U.S. Customs entry documents for the import that must include
one of the commodity codes from Appendix K to this subpart.
(4) * * *
(iii) The quantity of those controlled substances imported that are
used controlled substances.
* * * * *
(xiii) The certifications from essential-use allowance holders and
laboratory customers stating that the controlled substances were
purchased solely for specified essential uses and will not be resold or
used in manufacturing; or, if sales are made directly to laboratories,
certifications from laboratories that the controlled substances will
only be used for laboratory applications and will not be resold or used
in manufacturing;
(xiv) In the case of laboratory essential uses, a certification
from distributors of laboratory supplies that controlled substances
were purchased for sale to laboratory customers who certify that the
substances will only be used for laboratory applications and will not
be resold or used in manufacturing; and
(xv) The certifications from purchasers of controlled substances
that the controlled substance will be used as a process agent in
accordance with the definition of controlled substance in Sec. 82.3.
* * * * *
(h) * * *
(8) The invoice or sales agreement containing language similar to
the Internal Revenue Service Certificate that the purchaser or
recipient of imported controlled substances intends to transform those
substances, or
[[Page 41648]]
destruction verifications (as in paragraph (k) of this section) showing
that the purchaser or recipient intends to destroy the controlled
substances.
(i) Every person who has requested additional production allowances
under Sec. 82.9(e) of this subpart or destruction and transformation
credits under Sec. 82.9(f) of this subpart or consumption allowances
under Sec. 82.10(b) of this subpart or who transforms or destroys class
I controlled substances not produced or imported by that person must
maintain the following:
* * * * *
(m) Any person who transforms or destroys class I controlled
substances who has submitted an IRS certificate of intent to transform
or a destruction verification (as under paragraph (k) of this sectioin)
to the producer or importer of the controlled substance, must report
the names and quantities of class I controlled substances transformed
and destroyed for each control period within 45 days of the end of such
control period.
* * * * *
(u) Holders of essential-use allowances--reporting. Within 30 days
of the end of every quarter, any person allocated essential-use
allowances through an EPA letter must submit to the Administrator a
report containing the following information:
(1) The quantity of each controlled substance, in kilograms,
purchased and received from each producer and each importer during that
quarter;
(2) The gross quantity of each controlled substance, in kilograms,
that was used for the essential use during that quarter (for Metered
Dose Inhalers, this is the total quantity of each controlled substance
that was filled into Metered Dose Inhalers canisters during the quarter
and the quantity used in the manufacturing process that may have been
emitted, used for cleaning, recycled or destroyed);
(3) The quantity of each controlled substance, in kilograms, that
was destroyed during the quarter (for Metered Dose Inhalers, the
controlled substance was used in the manufacture of Metered Dose
Inhalers but was not incorporated into marketable Metered Dose Inhalers
canisters);
(4) The quantity of each controlled substance, in kilograms, that
was emitted during the essential-use during the quarter;
(5) For Metered Dose Inhalers, for the fourth quarter report only,
the quantity of each controlled substance, in kilograms, that was
incorporated into all marketable Metered Dose Inhalers;
(6) For Metered Dose Inhalers, for the fourth quarter report only,
the quantity of each controlled substance, in kilograms, contained in
Metered Dose Inhalers that were exported during the control period;
(7) For the fourth quarter report only, the quantity of each
controlled substance, in kilograms, held in inventory, that was
acquired with essential use allowances in all control periods;
(8) For the fourth quarter report only, the quantity of each
controlled substance, in kilograms, in a stockpile that is owned by the
company or is being held on behalf of the company under contract, and
was produced or imported through the use of production allowances and
consumption allowances prior to the phaseout; and
(9) For Metered Dose Inhalers, for the fourth quarter report only,
the total number of units of each specific product manufactured in the
control period, (including marketable and defective units).
(v) Any distributor of laboratory supplies receiving class I
controlled substances under the global laboratory essential-use
exemption for sale to laboratory customers must report quarterly the
quantity received of each class I controlled substance from each
producer or importer.
(w) Any distributor of laboratory supplies who purchased controlled
substances under the global laboratory essential-use exemption must
maintain as records copies of certifications from laboratory customers
provided to the distributor pursuant to paragraph (y) of this section.
(x) Any distributor of laboratory supplies who purchased controlled
substances under the global laboratory essential-use exemption must
submit quarterly (except distributors following procedures in
Sec. 82.4(z)) the quantity of each controlled substance purchased by
each laboratory customer whose certification was previously provided to
the distributor pursuant to paragaph (y) of this section.
* * * * *
(z) Any distributor of laboratory supplies, who purchased class I
controlled substances under the global laboratory essential-use
exemption, and who only sells the class I controlled substances as
reference standards for calibrating laboratory analytical equipment,
may write a letter to the Administrator requesting permission to submit
the reports required under paragraph (x) of this section annually
rather than quarterly. The Administrator will review the request and
issue a notification of permission to file annual reports if, in the
Administrator's judgment, the distributor meets the requirements of
this paragraph. Upon receipt of a notification of extension from the
Administrator, the distributor must submit annually the quantity of
each controlled substance purchased by each laboratory customer whose
certification was previously provided to the distributor pursuant to
paragraph (y) of this section.
9. Appendix C to Subpart A is revised to read as follows:
Appendix C to Subpart A--Parties to the Montreal Protocol (as of
February 19, 1998)
------------------------------------------------------------------------
Montreal London Copenhagen
Foreign state protocol amendments amendments
------------------------------------------------------------------------
Algeria....................... ............
Antigua and Barbuda...........
Argentina.....................
Australia.....................
Austria.......................
Azerbaijan....................
Bahamas.......................
Bahrain.......................
Bangladesh.................... ............
Barbados......................
Belarus....................... ............
Belgium.......................
Belize........................
Benin......................... ............ ............
[[Page 41649]]
Bolivia.......................
Bosnia and Herzegovina........ ............ ............
Botswana......................
Brazil........................
Brunei Darussalam............. ............ ............
Bulgaria...................... ............ ............
Burkina Faso..................
Burundi....................... ............ ............
Cameroon......................
Canada........................
Central African Republic...... ............ ............
Chad.......................... ............ ............
Chile.........................
China......................... ............
Colombia......................
Comoros....................... ............
Congo......................... ............
Congo, Democratic Republic of.
Costa Rica.................... ............ ............
Cote d'Ivoire................. ............
Croatia.......................
Cuba.......................... ............ ............
Cyprus........................ ............
Czech Republic................
Denmark.......................
Dominica...................... ............
Dominican Republic............ ............ ............
Ecuador.......................
Egypt.........................
El Salvador................... ............ ............
Equatorial Guinea............. ............ ............ ............
Estonia....................... ............ ............
Ethiopia...................... ............ ............
European Community............
Federated States of Micronesia ............ ............
Fiji.......................... ............
Finland.......................
France........................
Gabon......................... ............ ............
Gambia........................ ............
Georgia....................... ............ ............
Germany.......................
Ghana......................... ............
Greece........................
Greneda....................... ............
Guatemala..................... ............ ............
Guinea........................ ............
Guyana........................ ............ ............
Honduras...................... ............ ............
Hungary.......................
Iceland.......................
India......................... ............
Indonesia..................... ............
Iran, Islamic.................
Ireland.......................
Israel........................
Italy.........................
Jamaica.......................
Japan.........................
Jordan........................
Kenya.........................
Kiribati...................... ............ ............
Korea, Democratic People's
Republic of.................. ............ ............
Korea, Republic of............
Kuwait........................
Latvia........................ ............ ............
Lebanon....................... ............
Lesotho....................... ............
Liberia.......................
Libyan Arab Jamahiriya........ ............ ............
Liechtenstein.................
Lithuania.....................
[[Page 41650]]
Luxembourg....................
Madagascar.................... ............ ............
Malawi........................
Malaysia......................
Madives....................... ............
Mali.......................... ............
Malta......................... ............
Marshall Islands..............
Mauritania.................... ............ ............
Mauritius.....................
Mexico........................
Modlova....................... ............ ............
Monaco........................ ............
Mongolia......................
Morocco.......................
Mozambique....................
Myanmar....................... ............
Namibia....................... ............
Nepal......................... ............
Netherlands...................
New Zealand...................
Nicaragua..................... ............ ............
Niger......................... ............
Nigeria....................... ............ ............
Norway........................
Pakistan......................
Panama........................