1991 federail'register 26, 1991 · 1991 to continue to sell or distribute existing stocks at...

29362 Federail'Register / Vol. 56. No. 123 / Wednesday, June 26, 1991 / Notices

ENVIRONMENTAL PROTECTIONAGENCY

[OPP-38509; FRL-3846-4]

Existing Stocks of Pesticide Products;Statement of Policy

AGENCY: Environmental ProtectionAgency (EPA).ACTION: Notice; statement of policy.

SUMMARY: This Statement summarizesthe policies that will generally guideEPA in making individual decisionsconcerning whether, and under whatconditions, the Agency will permit thecontinued sale, distribution, and use ofexisting stocks of pesticide productswhose registrations under the FederalInsecticide, Fungicide, and RodenticideAct (FIFRA) are amended, cancelled, orsuspended. Although most of thepolicies reflected in this Statement havealready been applied by the Agency ona case-by-case basis, EPA now intendsto formalize these policies and issoliciting comments from interestedpersons. If, after reviewing anycomments, EPA determines that changesto this Statement are warranted, theAgency will issue a revised Statement ofPolicy in the Federal Register.DATES: The policies announced in thisStatement are currently in effect. TheAgency will review any comments onthese policies received by the Agency onor before August 26, 1991. Afterreviewing such comments, the Agencymay issue a revised Statement of Policy.ADDRESSES: By mail, submit commentsto: Public Docket and Freedom ofInformation Section, Field OperationsDivision (H7506C), Office of PesticidePrograms, Environmental ProtectionAgency, 401 M St., SW., Washington DC20460. In person, deliver comments to:Rm. 246, Crystal Mall #2, 1921 JeffersonDavis Highway, Arlington, VA 22202.FOR FURTHER INFORMATION CONTACT: Bymail: Martha Lamont, Special Reviewand Reregistration Division (H7508W),Office of Pesticide Programs,Environmental Protection Agency, 401 MSt., SW., Washington DC 20460. Officelocation and telephone number: SpecialReview Branch, rm. 31L3, CrystalStation 1, 2800 Crystal Drive, Arlington,VA 22202, (703)-308-8033.SUPPLEMENTARY INFORMATION: Thegeneral statement of policy on existingstocks of pesticide products whoseregistrations under FIFRA are amended.cancelled, or suspended follows.

GENERAL STATEMENT OF POLICY

Table of Contents

I. Application

II. Applicable Statutory ProvisionsIII. General Policies Applicable to AllExisting StocksA. Cancelled Pesticides

1. Cancellations where the Agencyhas identified particular risk concerns.

2. Cancellations where a registranthas failed to comply with an obligationof registration.

a. Failure to pay maintenance fees.b. Failure to pay reregistration fees.c. Failure to file information during

reregistration.d. Failure to comply with the terms of

a conditional registration.3. Cancellation of products while

subject to data call-in notices undersection 3(c)[2)(B).

4. Cancellation of registrations subjectto reregistration requirements and labelimprovement programs.

5. Other voluntary cancellations.B. Suspended PesticidesC. Amendments of Registration

I. Application

This Statement of Policy applies todeterminations the Agency will makeconcerning existing stocks of pesticideproducts whose registrations have beenamended, cancelled, or suspendedpursuant to sections 3, 4, or 6 of theFederal Insecticide, Fungicide andRodenticide Act as amended (FIFRA).This Statement also applies to existingstocks of products sold or distributedunder a supplemental distributoragreement. It is the responsibility of theregistrant to notify such distributors ofany applicable existing stock provisions.

For purposes of this Statement,existing stocks are defined as thosestocks of a registered pesticide productwhich are currently in the United Statesand which have been packaged, labeled,and released for shipment prior to theeffective date of the action.

This Statement establishes generalprinciples which the Agency generallywill apply in determining whether andunder what conditions to allow the saleand use of existing stocks. In general, ifthere are significant risk concernsassociated with a cancelled pesticide,the Agency will make a case-by-casedetermination as to whether to allow thecontinued sale or use of existing stocksof the pesticide. The Agency will notallow continued sale, distribution, or useof such a pesticide unless the benefitsassociated with such sale, distribution,or use exceed the risks.

Where there are no significant riskconcerns associated with thecancellation of a pesticide, the Agencywill generally allow unlimited use ofexisting stocks, and unlimited sale bypersons other than the registrant. Aregistrant will generally be allowed to

continue to sell existing stocks for 1 yearafter the date cancellation is requested,or I year after the date the registranthas ceased to comply with 'theresponsibilities that are placed uponregistrants, whichever date is sooner.

This policy will be implemented onthe date of publication of this notice.Because registrants were unaware of thepolicies contained in this notice, theAgency has decided to provide a 6-month "grace period" before certainaspects of this Policy become fullyeffective. Specifically, in cases wherethe Agency has not identified anysignificant risk concerns, the Agencywill allow registrants of productscancelled on or before December 26,1991 to continue to sell or distributeexisting stocks at least until December26, 1991, notwithstanding the fact thatapplication of the policies set forth inthis statement might result in a shorterexisting stocks period or an outrightprohibition against the sale ordistribution by the registrant of anyexisting stocks.

II. Applicable Statutory Provisions

Under FIFRA section 3, a pesticideproduct must be registered with EPAbefore it may be sold or distributed incommerce. EPA may not register apesticide unless, among other things, itfirst determines that the product and itsuse will not cause unreasonable adverseeffects on the environment. Once apesticide product is registered, FIFRAprovides a number of differentmechanisms for changing the status of aregistration. These mechanisms can begrouped into three categories: Changesrequested by a registrant; changesimposed by EPA for failure to complywith various obligations imposed uponregistrants; and changes imposed byEPA because of a determination by theAgency that use of the pesticide productresults in unreasonable adverse effectsto man or the environment.

A registrant may request at any time,for any reason, to voluntarily cancel aregistration (FIFRA section 6(f)) or toamend the terms and conditions of theregistration, most frequently byamending the pesticide product label(FIFRA sections 3(f) and 6(f)). Voluntaryamendments to registration can include,among other things, adding or deletinguses, increasing or decreasingapplication rates, changing theformulation of a pesticide, or changingthe label language (such as changingdirections for use, warning statements,etc.).

Other changes in registration statusare the result of Agency action becauseof the failure of a registrant to fulfill

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certain responsibilities adequately. Eachregistrant has a continuing obligation toensure that its registered productscomply with the standards forregistration. Note that the the term"registration" includes reregistration(see FIFRA section 2(z)). As part of thisobligation, a registrant may be requiredto submit to EPA additional informationwhich the Agency considers necessaryto support continued registration. SeeFIFRA section 3(c)(2)(B). Failure tosubmit information required by theAgency pursuant to section 3(c)(2)(B)may result in the suspension of aregistration until the information isprovided.

In addition, registrants of pesticideproducts containing active ingredientsfirst registered before November 1, 1984,must demonstrate, under FIFRA section4, that their products meet the currentstandards for registration and should bereregistered. Failure to comply withcertain provisions of section 4 can resultin the cancellation or suspension ofpesticide registrations. For example,registrations may be cancelled if aregistrant fails to pay fees mandated bysection 4(i) or fails to provide EPA withcertain information during the earlystages of the reregistration process (seeFIFRA sections 4(d)(5), 4(e)(3) and4(i)(7)(C)). Failure by registrants tosupply other information required duringreregistration may result in thesuspension of registrations until therequired information is provided to EPA(see, e.g., FIFRA sections 4(d)(6) and4(f)(3)).

If a registration is a conditionalregistration, the Agency may also takeaction to cancel the registrationpursuant to FIFRA section 6(e) if theregistrant fails to meet any of theconditions imposed upon the product atthe time of registration.

Finally, changes in the status of aregistration may be mandated by EPA toassure that the product or its use doesnot result in unreasonable adverseeffects on the environment. The Agencymay reevaluate a pesticide at any time.If EPA determines that a pesticideproduct (without change in its terms ofregistration) no longer meets thestandard for registration, the Agencymay propose cancellation of the productunder FIFRA section 6(b) or propose toclassify the product for restricted use.Such Agency proposals may at timesallow changes in the terms ofregistration (such as the deletion ofparticular uses or addition of specifiedprotective measures) as alternatives tocancellation or change in classification.If the Agency determines that use mayresult not only in unreasonable adverse

effects but in an "imminent hazard,"EPA may initiate action to suspend thepesticide registration during thependency of cancellation proceedings(FIFRA section 6(c)).

It is a violation of FIFRA section12(a)(1)(A) to sell or distribute anypesticide that has been cancelled orsuspended, except to the extent that saleor distribution is authorized by EPA. Itis also a violation of FIFRA section12(a)(2)(J) and (K) to violate the terms ofa suspension or cancellation order.Thus, unless expressly permitted by theAgency, distribution or sale of existingstocks of cancelled or suspendedpesticides is unlawful. Use of suchexisting stocks, on the other hand, is notunlawful unless specifically prohibitedby the Agency in a cancellation orsuspension order.

If a pesticide is cancelled undersection 6(b) or section 6(e), FIFRAprovides in section 6(a)(1) and (e) thatthe Administrator may permit thecontinued sale and use of existingstocks of the cancelled pesticide "tosuch extent, under such conditions, andfor such uses as he may specify if hedetermines that such sale or use is notinconsistent with the purposes of(FIFRA) and will not have unreasonableadverse effects on the environment."FIFRA section 2(bb) defines"unreasonable adverse effects" as "anyunreasonable risk to man or theenvironment, taking into account theeconomic, social, and environmentalcosts and benefits of the use of anypesticide." Thus, in determining whetherto permit distribution, sale, or use ofexisting stocks of pesticides cancelledunder sections 6(b) or 6(e), EPA mustapply the same risk/benefitconsiderations that are applicable toother Agency actions under FIFRA(except that such considerations wouldbe limited to the context of allowingdistribution, sale, or use of existingstocks).

FIFRA does not specify a standard forthe Agency to apply in determiningwhether to allow the distribution, sale,and use of existing stocks of pesticideproducts cancelled voluntarily pursuantto FIFRA section 6(f) or for failure of theregistrant to comply with therequirements of section 4. The Agencyhas decided to make existing stocksdeterminations with respect to productscancelled under sections 4 and 6(f)based upon whether distribution, sale,or use of existing stocks would beconsistent with the purposes of FIFRA.In determining whether suchdistribution, sale, or use would beconsistent with the purposes of FIFRA,the Agency will first determine whetHer

there are any significant risk concernsassociated with the cancelled product. Ifthere are such risk concerns, the Agencywill generally require a risk/benefitanalysis before allowing the sale,distribution, or use of existing stocks. Ifthere are no significant risk concerns,the Agency will generally not require arisk/benefit analysis before making anexisting stocks determination.

In the case of suspension of pesticideregistrations for failure to submit data,FIFRA has explicitly provided theAgency with broad discretion in thearea of existing stocks. Section 3(c)(2)(B)provides that the Administrator maymake such provisions for the sale anduse of existing stocks of a pesticidewhose registration is suspended forfailure to submit data as EPA "deemsappropriate."

As to existing stocks of pesticides thathave had their registrations amended,the Agency generally considers sale ordistribution of a pesticide bearing alabel or containing a-formula other thanthe label or formula currently approvedby the Agency to be a violation ofFIFRA section 12(a)(1)(B), (C), or (E).The Agency has, however, establishedregulations (at 40 CFR 152.130) whichprovide for the continued sale of aproduct bearing previously approvedlabeling for certain periods of timedepending upon the nature of theamendment. These regulations do notapply to changes in composition. TheAgency will treat sale and distributionof products containing a previouslyaccepted formula that is different fromthe currently accepted formula in themanner described in unit III.C(Amendments of Registration) of thisPolicy Statement.

Ill. General Policies Applicable to AllExisting Stocks

This Policy Statement contains thegeneral policies that the Agency intendsto apply in making determinationsconcerning the sale or use of existingstocks of pesticides, as defined in unit I(Application) of this statement. In anyindividual case, the Agency willconsider additional factors ifappropriate. To the extent that aparticular action or cancellation can fitinto more than one category discussedbelow, EPA will generally select themost restrictive existing stocksprovision that may apply. Whenever anexisting stocks provision is issued, theAgency reserves the right to amend thatprovision on its own initiative or at therequest of any interested person (eitherby allowing additional time to sell oruse stocks or by placing additionalrestrictions on the sale or use of existing

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stocks) if later circumstances warrant.Finally, unless an existing stocksprovision stipulates otherwise, any saleor use of existing stocks must be inaccordance with the previouslyapproved label and labeling on, oraccompanying, the product.

A. Cancelled PesticidesIn determining what existing stocks

provision is appropriate with respect toa pesticide whose registration has beencancelled, the Agency generally willbase its determination on the totalcircumstances affecting the cancelledregistration. The actual mechanismtriggering cancellation will not alwaysbe the controlling factor. Instead, theAgency generally will focus on threefactors: (1) Whether there are significantpotential risks which raise a question asto whether the use of the cancelledpesticide results in unreasonableadverse effects on man or theenvironment (this category consistsprimarily of cancellations where theregistration is the subject of a notice ofintent to cancel issued pursuant tosection 6(b) or a special review initiatedpursuant to 40 CFR part 154); (2)whether the registrant of the cancelledpesticide has failed to meet anobligation of registration (such aspayment of fees under section 4, orsubmission of data required undersection 3(c)(2)(B), 3(c)(7), or (4); and (3)whether the Agency has taken someregulatory position with respect to thecancelled registration (such as issuanceof a Registration Standard, LabelImprovement Program, or a documentdescribing the reregistration status of apesticide or active ingredient).Consideration of these factors in aparticular case may suggest differingprovisions for the sale, distribution, oruse of existing stocks. In such situations,the Agency generally will apply.themost restrictive existing stocksprovision to the cancelled product.

1. Cancellations where the Agencyhas identified particular risk concerns.Whenever a pesticide registration iscancelled, the Agency will determinewhether there are significant potentialrisk concerns associated with the use ofthe pesticide. If there are such concerns,the Agency generally will make a case-by-case determination as to whether toallow continued distribution, sale, or useof existing stocks of the cancelledpesticide. This likely will be the casewhether a product is cancelled byAgency mandate after issuance of arisk-based notice of intent to cancel,whether the product is cancelledbecause of the registrant's failure tocomply with the reregistrationrequirements of section 4, or whether

the cancellation was requestedvoluntarily by the registrant.

In most cases, the Agency will notpermit continued distribution, sale, oruse of existing stocks of a cancelledpesticide raising risk concerns unless itcan be demonstrated that the social,economic, and environmental benefitsassociated with such distribution, sale,or use exceed the social economic, andenvironmental risks. A risk/benefitanalysis for existing stocks purposes issomewhat different from the analysisthat is performed by the Agency indetermining whether or not to cancel aregistration. In making existing stocksdeterminations, the Agency mayconsider any or all of the followingcriteria, to the extent that information isprovided or available:

a. The quantity of existing stocks ateach level of the market (i.e., inpossession of registrants, distributors,retailers, end-users, etc.)

b. The risks resulting from the use ofsuch stocks. The examination of riskmay take into account the limited natureof use of existing stocks where relevant(such as where limited use might resultin a level of exposure that may notresult in much risk). In many cases,however, it may turn out that the risksposed by use of existing stocks will besimilar or identical to the risks posed bycontinued registration (such as, forexample, where the risk is primarily anacute risk from single exposure). Inassessing the risks posed by use ofexisting stocks, the Agency will, to theextent possible, also consider the risksposed by likely alternatives (if any).

c. The benefits resulting from the useof such stocks. In considering thebenefits of existing stocks, the Agencymay consider the short-term problems (ifany) in switching to alternatives,including the length of time beforewhich such alternatives could beavailable to retailers and users and anyhardships that might be presented tousers before alternatives are available.The consideration of benefits may alsoinclude {insofar as it affects existingstocks) the type of analysis of benefitsthat the Agency performs in its otherrisk/benefit analyses (i.e., whetheralternatives are available, how any suchalternatives compare in terms of costand efficacy, and what the economiceffects to the user will be if thecancelled product is unavailable).

d. The dollar amount users and othershave already spent on existing stocks(which would be lost if distribution,sale, or use were not permitted).

e. The risks and costs of disposal oralternative disposition of the pesticide ifdistribution, sale, or use are not

permitted. The Agency may assesswhether existing stocks could be usedfor other purposes. If disposal appearslikely, the Agency may considerrelevant aspects of disposal, includingthe nature, feasibility, and cost of properdisposal of the cancelled product.

f. The practicality of implementingrestrictions on distribution, sale, or useof existing stocks. For instance, it maybe that in some circumstances theAgency would allow continued use of aproduct because the product could not,as a practical matter, be retrieved.

In addition to the factors listed above,the Agency may consider any otherinformation relevant to either the risksposed by, or the benefits resulting from,the sale and use of existing stocks.

In performing a risk/benefit analysisthe Agency will consider all informationand/or comments from registrants andinterested persons regarding existingstocks that are received in response topublic documents that the Agency issuesin the course of its regulatory process.For example, where an active ingredientis in special review, the Agency willoften issue a Preliminary Determination(position document (PD) 2/3) andrequest public comment on all proposedregulatory actions. Where a registrant'srequest for voluntary cancellation isreceived prior to initiation of specialreview, but while one is underconsideration, the Agency will publish anotice in the Federal Registeracknowledging receipt of the requestand may solicit public commentsregarding existing stocks provisions.

If registrants or others indicate thatthere is an interest in the continued saleor use of existing stocks of cancelledpesticides raising risk concerns, and ifinformation is provided to the Agency tosupport such distribution, sale, or use,the Agency will generally conduct ananalysis of the risks and benefits of thedistribution, sale, and use of existingstocks. If information is not provided tothe Agency or no interest in continuedsale, distribution, or use is expressed tothe Agency, the Agency will generallynot conduct a risk/benefit analysis andwill not permit any sale, distribution, oruse of existing stocks.

While a risk/benefit analysis will bean important factor in the Agency'sdetermination of whether or not to allowdistribution, sale, and use of existingstocks of cancelled pesticides raisingrisk concerns, the Agency must alsodetermine that further distribution, sale,or use would be consistent with thepurposes of FIFRA. There may beunusual circumstances where theAgency will place restrictions on thedistribution, sale, and use of existing

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stocks beyond those limits otherwiseidentified in a risk/benefit analysis (e.g.,to prevent stockpiling by distributorsand users).

In addition, in determining whetherdistribution, sale, or use of existingstocks would be consistent with thepurposes of the Act, the Agency willgenerally look at the circumstancessurrounding the cancellation. If acancellation is the result of a finalAgency action after a special reviewand a hearing pursuant to section 6(b),the Agency is unlikely to allowcontinued sale or distribution (and quitepossibly, use) of the cancelled pesticide.In such circumstances, registrants, otherdistributors, and users of the pesticidehave had ample notice of the Agency'sintentions and sufficient time to takeappropriate steps accordingly (such asto procure alternatives, not stockpilelarge quantities of the pesticideinvolved, use up stocks already on hand,etc.). On the other hand, where avoluntary cancellation occurs wellbefore the Agency could take finalaction (i.e., prior to the completion of aspecial review or in lieu of a hearingunder section 6(b)), the Agency maytake into consideration the shorterperiod of notice sellers and users mayhave had before cancellation, the degreeto which the registrant's actionsaccelerated the removal of the pesticidefrom the market, and whether thecancellation would have occurred at allwithout an existing stocks provision.

In a special review situation, theAgency will publish its finaldetermination on whether to allow anysale, distribution, or use of existingstocks of cancelled pesticides, and if so,what conditions to place on such sale,distribution, or use, as part of the FinalDetermination (PD 4) and any otherdocuments the Agency may issue eitherwith or subsequent to the issuance ofthe PD 4 (such as notices of intent tocancel, cancellation orders, etc.). If achemical raising a risk concern iscancelled without issuance of a Noticeof Final Determination at the conclusionof a special review, the Agency willinclude a final existing stocksdetermination in a cancellation order.Existing stocks determinationscontained in cancellation orders will beenforced under section 12(a)(2)(K) or12(a)[1)(A) of FIFRA.

The Agency may allow the continuedsale, distribution, and use of existingstocks of a voluntarily cancelled productraising risk concerns without performinga risk/benefit analysis if similarproducts with substantial share of themarket remain on the market. Forexample, if a registration raising risk

concerns is cancelled voluntarily, theAgency may examine whether thecancelled registration comprises asignificant share of the market for theparticular active ingredient and usepattern, and the circumstancessurrounding the cancellation. If thecancelled registration does not comprisea significant share of the market, aprohibition on existing stocks would notbe likely to significantly reduceenvironmental risks, because similarproducts would continue to be sold andused. Further, the Agency believes thatit makes sense to encourage the early,voluntary cancellation of registrationswhen risk concerns arise.

If such an early cancellation is trulyvoluntary (i.e., the registration is notfacing imminent cancellation orsuspension), the Agency may allow theregistrant to sell and distribute existingstocks for 1 year without performing adetailed risk/benefit analysis, and mayallow other persons to distribute, sell,and use existing stocks until the stocksare exhausted. The Agency does notbelieve it should penalize registrants,distributors, or users in cases where aregistrant voluntarily cancels aregistration before other registrants arecompelled to do so. Moreover, it isunlikely that a detailed risk/benefitanalysis would yield a different result;so long as similar registrationscomprising a predominant share of themarket remain, it is unlikely thatdistribution, sale, or use of existingstocks of a relatively small volume ofcancelled product would significantly (ifat all) increase the risk of anyunreasonable adverse effect on theenvironment.

On the other hand, if registrationsconstituting a dominant share of themarket are cancelled, and the Agencydoes not believe that the remainingregistrants can fill the previous demandfor the product, the Agency willgenerally not allow continued sale,distribution, or use of existing stocksunless a risk/benefit analysis supportingsuch sale, distribution, or use isperformed.

In cases where the Agency allowscontinued sale and use of existingstocks of cancelled products raising riskconcerns because of the continuingnature of other registrations, it should beunderstood that the existing stocksallowance may be amended if theconditions concerning the registrationsof the remaining products change. (TheAgency in all cases reserves the right toamend existing stocks provisions whereappropriate.) If other registrations arecancelled or amended during an existingstocks period for a voluntarily cancelled

product, and the Agency establishesrestrictions on existing stocks of theseother registrations or requires relabelingof product made prior to theamendment, the Agency will likelyimpose similar restrictions on theexisting stocks of the earlier voluntarilycancelled registration.

2. Cancellations where a registranthas failed to comply with an obligationof registration. This category consists ofcancellations where the Agency doesnot have significant risk concerns withrespect to the cancelled pesticide, butwhere the registrant has failed torespond appropriately to an obligationof registration. In these situations, theAgency has no particular reason tobelieve that continued distribution, sale,or use of the cancelled product wouldresult in unreasonable adverse effectson the environment.

If a cancellation is not triggered bysection 6(b) or 6(e) of FIFRA, the Agencyis not required to perform a risk/benefitanalysis before determining whether toallow continued sale, distribution, or useof existing stocks. Unless there aresignificant risk concerns associated withthe cancelled pesticide, the Agencygenerally does not intend to performsuch an analysis. Even where acancellation is triggered by section 6(b)or 6(e), the Agency generally intends tomake existing stocks decisions forcancelled products without performing adetailed risk/benefit analysis if thereare no significant risk concernsassociated with the cancelled pesticide.EPA believes it would be a poor use ofresources to perform such an analysiswhen the Agency is not aware of anyrisk/benefit considerations that wouldserve as a basis for cancelling aregistration. The Agency believes ithighly unlikely that any analysis of risksand benefits of products not raisingsignificant risk concerns would result inprohibition of distribution, sale, or useof existing stocks.

EPA does, however, believe thatwhere registrants of cancelled productshave failed to comply with requirementsof registration, the nature ofnoncompliance with the particularobligation involved should be taken intoaccount in determining whetherdistribution, sale, or use of existingstocks would be consistent with thepurposes of FIFRA. Since suchnoncompliance does not itself raiseconcerns of unreasonable adverseeffects on the environment, EPA willgenerally allow persons other than theregistrant to continue to distribute, sell,or use stocks of cancelled products inthis category until such stocks areexhausted (although the Agency may

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place some restrictions on sale or use ifinventories are not exhausted in areasonable period of time). In the caseof the noncompliant registrant, however,EPA will generally apply the policies setforth below in determining whether toallow continued sale and distribution.Those policies would generally prohibita registrant from selling or distributingexisting stocks more than 1 year fromthe date the registrant first failed tocomply with an obligation ofregistration.

In any given case, multiple existingstocks dates might apply if a registranthas failed to comply with more than oneobligation of registration. In suchcircumstances, the most restrictive datewill generally apply, regardless of thetriggering mechanism for cancellation.For example, if a registrant of acancelled product failed to pay amaintenance fee due on March 1, 1990,and a reregistration fee due on June 1,1990, the registrant would likely not beallowed to sell or distribute any existingstocks of the product after March 1, 1991(regardless of whether the product wasactually cancelled for failure to paymaintenance fees or reregistration fees).

a. Failure to pay maintenance fees.FIFRA section 4(i)(5) requires allregistrants to pay annually by March Istcertain maintenance fees forregistrations. Failure to pay such feesmay result in the cancellation of aregistration by order without a hearing(although the cancellation itself does notbecome effective until the Agency issuesthe cancellation order). If a maintenancefee is not paid for any given year, theAgency will generally not allow aregistrant to continue to sell ordistribute existing stock of a cancelledproduct for more than 1 year after thedate when payment to support thecancelled registration Was due,regardless of when the actualcancellation occurs. For example, if aregistrant fails to pay a maintenance feedue March 1, 1991, to support aparticular registration, and theregistration is later cancelled, theAgency will generally not allow thatregistrant to sell or distribute existingstocks of the pesticide after March 1,1992.

b. Failure to pay reregistration fees.FIFRA section 4(i) also requires someregistrants to pay a reregistration fee(either in one or two deposits). This feeis to be apportioned among theapplicable registrants on the basis ofmarket share information thatregistrants are required to submit to theAgency. Failure to submit market shareinformation or to pay an appropriate feecan lead to cancellation of a registration

by order without a hearing (FIFRAsection 4(i}[)(7C)]. If a registrant fails topay the appropriate reregistration fee orsubmit the required market shareinformation, and an applicable productis later cancelled, a registrant willgenerally not be allowed to sell ordistribute existing stocks of thecancelled product more than I year afterthe date the market share data or feewere due.

c. Failure to file information duringreregistration. FIFRA section 4establishes a five-phased process forreregistration activities. If a registrantelects to pursue reregistration, aregistrant may have to commit to supply,and then supply, information to theAgency during Phases 2, 3, 4, and 5(sections 4(d), (e), (f), and (g)). Failure toprovide appropriate commitments orinformation can result in suspension orcancellation of a registration. If aregistrant fails to comply fully with anyparticular phase of reregistration, andan affected product is later cancelled,the Agency will generally not allow aregistrant to sell or distribute existingstocks of the cancelled product morethan I year after the date that aregistrant commitment for thatparticular product was due. Forexample, if an initial Phase 3 response isdue from a registrant on July 24, 1991,the registrant fails to submit anadequate response, and the product islater cancelled, the Agency willgenerally not allow the registrant to sellexisting stocks of the product after July24, 1992.

Registrants will not be penalized forvoluntarily cancelling a product at thebeginning of any'particular phase ofreregistration (i.e., a registrant whocancels as of the commitment date willhave a full year from the commitmentdate to sell or distribute existing stocks).Noncompliance in any phase, however,will generally be treated as if theregistrant had requested voluntarycancellation at the beginning of thephase.

Agency policy with respect to existingstocks of suspended products that failedto comply with the requirements ofreregistration are discussed later in thisdocument.

d. Failure to comply with the terms ofa conditional registration. FIFRAsection 3(c)(7) allows the Agency toissue registrations before all applicablesupporting data are provided. Suchregistrations, however, are conditionalupon submission of the missing data in atimely manner (and upon compliancewith any other conditions contained inthe registration at the time of issuance).Failure to comply with the terms of a

conditional registration can lead toissuance of a notice of intent to cancelunder section 6(e).

Where a conditional registration iscancelled (and the Agency has notidentified significant risk concerns), theAgency will base its existing stocksdecision on the nature of any conditionsthat have not been met by the registrant.For purposes of this analysis, conditionsof registration can be categorized as"general" conditions or "specific"conditions. A general condition,frequently applied to conditionalregistrations issued pursuant to FIFRAsection 3(c)(7)(A) (i.e., registrationsissued to products that are identical orsubstantially similar in chemicalcomposition and use to one or moreexisting registered products), requires aregistrant to submit required data whenall other registrants of the similarproduct are required to do so. Such ageneral condition neither establishesspecific data requirements nor specificdates; the condition is generallytriggered by issuance of a data call-innotice. On the other hand, someconditional registrations, particularlythose issued pursuant to FIFRA section3(c)(7)(B) and {C) (i.e., conditionalregistrations of products containing newchemicals or bearing significant newuses), contain conditions requiring thesubmission of specified studies orinformation by specified dates. Wheredata requirements and submission datesare specifically identified in theconditional registration, suchrequirements are considered "specific"conditions.

The Agency will treat the failure tocomply with a general condition of aconditional registration in the samemanner as a failure by a registrant tocomply with the terms of any other datacall-in. If a registrant of a conditionalregistration with a general condition tosubmit data upon request does notthereafter submit data after issuance ofa data call-in, and the registration iscancelled for any reason, the registrantwould generally be allowed to continueto sell or distribute existing stocks for 1year after either the day the 90-dayresponse to the data call-in was due orthe date at which the registrant ceasedto remain in compliance with the termsof the data call-in, whichever date islater. (See unit III.A.3 below).

On the other hand, if a registrant of aconditional registration fails to complywith a specific condition identified atthe time the registration was issued, theAgency does not believe it is generallyappropriate to allow any sale and use ofexisting stocks if the registration iscancelled. Accordingly, the Agency does

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Federal Register ,/ Vol. 56, No. 123 I Wednesday, lune 26, 1991 'I Notices.237

not anticipate allowing a registrant tosell or distribute existing stocks ofcancelled products that wereconditionally registered if the registrantfails to demonstrate compliance Withany specific requirements set forth inthe conditional registration.

3. Cancellation of products whilesubject to data call-in notices undersection 3(c)(2)(B). Section 3(c)(2)(B)allows the Agency to require datafromregistrants. Registrants are required-tomake an-initial response to data call-innotices in 90 days, and thereafter'tosubmit the required data in accordancewith the schedule established by theAgency.Failure to respondappropriately can result in thesuspension of any registration sdbject' tothe data call-in.

Similar to reregistration, data call-innotices require a commitmentfrom aregistrant to supply data, and the timelysubmission of data, to maintain anactive registration. Accordingly,' theAgency will generally not allowregistrants to-sell existing stocks ofcancelled products more than 1-yearafter the date a 90-day response-to adata call-in notice is due unless theregistrant remains in compliance withthe terms-of the notice. For example,'if aregistrant commits to submit a 3-yearstudy and the product registration isthereafter cancelled upon request'by theregistrant pursuant to section Off) 9months after the 90-day response date,sale and distribution of existing-stocksby the registrant will be permitted for nomore than 3 months (1 year from the'-90-day response date).-However, if aproduct subject to a data call-in iscancelled and the registrant candemonstrate full compliance With therequirements'of the datacall-in up.to acertain date,'the Agency will likelyallow the registrant to continue to selland distribute existing stocks for -1yearfrom the date that compliance ended.For example, if the registrant hadcontracted with a lab to peiform a 3-year study,'the* lab had.commencedwork, and the registrant instructed thelab to cease woik 6 months later, theregistrant would generally be'allowed tosell and distribute existing stocks-dfcancelled products for 1 year:from thedate'the.lab was asked to cease work. onthe requiredotudy. The Agency Willgenerally allow persons other than: theregistrant to, continue to distribute, sdll.or use stocks of cancelled products inthis category until such stocks areexhausted (although the Agency-mayplace restrictions if such stocks are notexhausted in a reasonable time).

The preceding discussion assumesthat data generated- under the data call-

in-have-not disclosed significantpotential risks associated-with theproduct. Registrants should'be advisedthat voluntary cancellation of a productduring a data call-in response perioddoes not-excuse the registrant:fromcompliance with the requirements ofFIFRA section 6(a)(2) to report to theAdministrator any information regardingunreasonable adverse effects on theenvironment.

4. Cancellation of registrationssubject to reregistration requirementsand label improvement programs. In thecase of a registration subject'to a LabelImprovement'Program, (LIP). ordetermination resulting from decisionsmade during reregistration, the Agencyhas' determined that the registration ofthe product may continue, provided'thatcertain changes are made to the terms ofregistration (generally involving theproduct label). If a product subject to anLIP or reregistration requirement iscancelled, whether voluntarily or uponaction'by~the Agency,(eg.,for failure topay fees), the Agency will generallynotallow a registrant or any other,person tosell.ordistribute existing stocks unlesssuh sale or. distribution is. consistentwith the-terms.of the.LIP.orreregistration determination.

For example,, if an LIP states thatregistrants may not sellhor, distribute aproduct after January 1, 1992,-without acertain labelchange and slates thatother persons.may ndt sell- or distributeproduct without the new label afterJanuary 1, 1994, and a product subject-tothe LIP is voluntarily cancelled on-July 1.1991, the registrant'of the cancelledproduct will-not be allowed to-sdll or-distribute existing stocks of-thecancelled product after:January 1, 1992,unless theexisting, tocks are relabeledto be in compliance with'the LIP.Similarly, no otherlpersons would likelybe allowed to sell, or, distribute existingstocks of the cancelled product afterJanuary 1, 1994, unless the, stocks werein compliance with the terms of the LIP.

5. Other voluntary.cancellations.If aregiatrant requests tovoluntafily cancela registration where the Agency:hasidentified no particular risk concerns,the registrant. has:complied -With allapplicable conditions of reregistration,conditional registration,. and datatcdll-ins, and the registration is not-subject'toa Registration Standard, LabdlImprovement Program, orreregistrationdecision, the.Agency-Will generallypermit a registrant to.sell or distributeexistingostocks'for 1-year after thecancellation request was recdived.Persons other than registrants willgenerally be allowed tosell,' distribute,

or use existing.-stocks until such stocksare.exhausted.

B. SuspendedPesticides

FIFRA provides for two differenttypes, of-suspension. Under. section'6(c),EPA may suspend a pesticideregistration if use of the pesticide resultsin.an imminent'hazard. Under section3(c)(2}(B), EPA may.suspend aregistration.if a registrant:fails to. submitrequired-data to'the Agency-in:a,timelyfashion.. Section 4(d)(6) and-4(f)(3)provide for. suspensions pursuanV tosection 3(d)(2)(B)if.registrants fail tomake timely progress of, datadevelopmeitto meetcommitments'fordata submission, tests are not initiatedwithin-l ,year.after;issuance.of'a.Phase'4data.call'in notice,.or, data are notsubmitted!by the due.date.

MWhere-a-pesticide is suspendedbecause: of-an'imminent hazard,]EPAwill applythe policies applicable:tocancellationsWhere'the Agencyhasidentified significant risk concems:TheAgency.is-highly unlikely to allowsigiificant, sale,. distribution,; or. use dfpesticides suspended'because ofimminent'hazard; concerns.

Where a:pesticiae'is-suspendedbecause of failure to-comply with theprovisions of'a-data-call-in orreregistration requirement, the Agencywillgenerally not allow the registrant-tosell or distribute any existing stodksduring the pendency of the:suspension.Registrants who'sell-or distribute apesticide which'has been'suspendedunder.FIFRA section 3(c}(2)(B) will-be inviolation of FIFRA section 12(a)(2)(J).Unlike imminent hazard suspensions,the Agency does not anticipategenerilly placing restfictions onthesale, distribution, or use of existingstocks by persons other than theregistrant where a pesticide issuspended because of failure to complywith the'provisions'of adata call4n orreregistration requirement unless riskconcerns-were 'identified.

C. Amendments of-Begistrations

The Agency'has promulgatedregulations'{(t'40 CFR 152.130) dealingwith'the-saleor distribution of productsbearinglabeling, other than thelabelingcurrently approved'by-the Agency.Section 1521.30( }-df the CFR'stdtes, thatthe Agency will "normally" allowregistrantsto sell products beaiing oldlabeling for'18 moriths after Agencyapproval'of a revised label'and'allowothers to sell products bearing'the oldlabel-until all such-products'are'sld,-ifthe product-labeling is amended "on-theinitiative of the registrant:"'Section152.130(d) goes on to say that-if a

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revision is the result of a RegistrationStandard, Label Improvement Program,or notice concluding a Special Review,the Agency may establish alternatedates after which product sold by aregistrant, or sold by others, must bearcurrently approved labeling.

The regulations do not address theissue of time periods for sale of productsbearing a different composition orpackaging from that currently approvedby the Agency. The Agency believesthat if the composition or packaging isrequired to be changed by the Agency,the policies expressed below concerninglabel changes should apply. However, ifthe composition or packaging of aproduct is changed by a registrantvoluntarily, the Agency will generallyallow registrants to sell or distributeproduct for 18 months after the Agencyapproves the change; other persons willgenerally be allowed to sell productusing the old composition or packaginguntil all such product is sold.

Changes in labeling made at thebehest of the Agency are covered byparagraph (d) rather than paragraph (c)of 40 CFR 152.130. Thus, if label changesare imposed in a document issuedduring Phase 5 of reregistration (underFIFRA section 4(g)(2)(A)) or if labelrevisions (or other changes) are in partattributable to concerns that the productmay pose unreasonable adverse effectswithout the change, the Agency mayimpose appropriate restrictions on thesale or distribution of products not onlyby the registrant but by others in thedistribution chain as well ("channels oftrade" dates).

The Agency believes that, althoughsuch channels of trade dates may berelatively lengthy, they are necessary toeffective enforcement, serving as a formof "closure" on old labeling. In theAgency's enforcement experience,products bearing old labels can be foundin channels of trade far longer thanforeseen. Besides enforcementdifficulties, lack of an absolute cutoffpoint for needed label changes prolongsinconsistency among similar products,leading to confusion among users as towhat label instructions are correct. Moreimportantly, the lack of a channels oftrade date creates uncertainty thatproduct labels actually represent currentand protective standards. Under FIFRA,the assurance of risk reduction dependsheavily on expectations that labelinginstructions will be followed.Uncertainty that such compliance isoccurring and inconsistency amonglabels can frustrate efforts by both theAgency and registrants to effect real andconsistent risk reduction. Accordingly,in each label change either imposed by

the Agency, or attributed in part to riskconcerns under review by the Agency,EPA intends to impose both a date forintroduction of new labeling intochannels of trade (a registrant sale anddistribution date), and a date forremoving old labeling from channels oftrade. Except in the case of labelingchanges imposed through SpecialReview, EPA is unlikely to imposerestrictions upon use of product bearingold labeling.

The exact restrictions that the Agencymay impose will, of course, depend uponthe particular circumstances involved.Nonetheless, the Agency can identifycertain principles it generally will applyto label changes directed by the Agency.Label changes directed by the Agencyare currently imposed under threespecific activities:

1. The Special Review Process.Special reviews often culminate in anAgency determination that use of thepesticide without labeling changeswould cause unreasonable adverseeffects. Also, registrants of pesticides inspecial review may propose label "changes prior to the conclusion of aspecial review to reduce the risks thatare the focus of the review. When labelchanges are approved in such situations,existing stocks provisions will bedetermined on a case-by-case basis. Indetermining what provisions areappropriate, the Agency may considerany or all of the following factors:

a. The nature of the risk posed by thepesticide.

b. The nature of the labeling changerequired.

c. Whether an amendment to effectthe labeling change was submitted in atimely manner.

d. The potential adverse effectsassociated with continued sale ofproduct not bearing the revised labeling.

e. The volume and location of affectedproducts in the distribution chain.

f. The feasibility, expense, andeffectiveness of either requiringrelabeling of existing stocks, or ofrestricting sale and distribution ofproduct not bearing the revised labeling.

2. Reregistration of current products.Under FIFRA section 4(g), Phase 5 of thereregistration scheme requires thatproducts containing active ingredientsfirst registered before November 1, 1984,be reregistered. The Agency anticipatesthat labeling changes (amendments) willlikely be required upon issuance of adocument stating the Agency'sdetermination of the reregistrability ofan active ingredient under FIFRAsection 4(g)(2)(A). This ReregistrationEligibility Document (RED) will ask forlabel changes to be submitted within

one of two timeframes-normal orexpedited.

In the first instance, the reregistrationprocess envisioned in Phase 5 willnormally encompass changes inlabeling, composition, or packaging.These changes will be of a more routinenature, or will depend upon thedevelopment of product-specific data,such as acute toxicity or efficacy data.Dates for submission of labeling,timeframes for Agency review oflabeling changes, and existing stocksprovisions will be specified in the RED.Generally, submission of labelingchanges will be required 8 months fromthe date of submission of the RED, andAgency review will be completed 6months following submission.Registrants will generally be permittedto sell or distribute products bearing oldlabeling (or composition or packaging)for 1 year after the timeframeestablished in the RED for Agencyapproval, and persons other thanregistrants will generally be permitted tosell or distribute those products for anadditional 24 months. Thus, existingstocks dates for sale and distribution ofproducts bearing old labeling willgenerally be 26 months from the date ofissuance of the RED for registrants and50 months from the date of issuance ofthe RED for persons other thanregistrants.

In the second instance, the Agencymay require expedited labeling changesif it has significant concerns about therisks of the active ingredient that do notwarrant placing it into the SpecialReview process, but that labelingchanges could mitigate. Although EPAbelieves this situation will be rare,nonetheless the significance of Agencyconcerns will dictate early submissionand review of labeling, and relativelyshort existing stocks provisions. Existingstocks timeframes will be establishedcase-by-case, depending on the numberof products involved, the number oflabel changes needed, and other factors.

3. The Label Improvement Program(LIP). An LIP provides a framework forupgrading labeling that is unconnectedwith reregistration, and can be initiatedat any time that circumstances warrant.The LIP was established to provide amechanism for the Agency to target aparticular labeling problem or a group ofproducts having a common labelelement and to implement a labelingsolution uniformly for all affectedproducts. In that respect it should beviewed as neither active ingredient-specific nor product-specific, but rather"problem-specific." Fundamental to thisapproach is that the program does notdepend upon the development or

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interpretation of data, such as isrequired for reregistration. With such across-cutting but focussed approach, theLIP generally endeavors to imposelabeling requirements that can bespecified exactly or with a minimum ofvariability. Although labeling may berequired to be submitted and reviewedin a LIP, EPA's preferred approach is toobtain agreement via certification thatregistrants will make the changes. Thus,registrants can rapidly beginimplementing the changes in productsthey distribute and sell. EPA anticipatesthat any submission of labeling orcertification would be required in acomparatively short.time, after issuanceof the LIP. Unless the LIP is a singularly

complex one or involves large numbersof products or registrants, submissionsof labeling or certifications willnormally be required within 3 months.Registrants will generally be allowed tosell or distribute products bearing oldlabeling for 1 year after issuance of theLIP and persons other than registrantsfor 3 years after issuance of the LIP.

The Agency acknowledges the impactmultiple and frequent required labelchanges have in escalating registrantcosts, potentially disrupting thedistribution chain, and creating userconfusion. EPA will make every effort toconsolidate labeling efforts resultingfrom reregistration with those that may

be under way from LIPs or from parallelregulatory activities.

Interested persons are invited tosumbit written comments on this noticeof statement of policy on or beforeDecember 26, 1991. Comments must beara notation indicating the documentcontrol number, (OPP-38509). Writtencomments should be addressed to thePublic Docket and Freedom ofInformation Section, Field OperationsDivision, at the address given above.

Dated: June 17, 1991.

Douglas D. Campt,Director, Office of Pesticide Programs.

[FR Doc. 91-14958 Filed 6-25-91; 8:45 am]BILLING CODE 6560-50-F

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