Federal Register Vol. 81, No.7,

This proposed rule is intended to: (1) Establish a timeframe for filing legal action for judicial review of OPM or employing agency final action on FEGLI claims; and (2) provide a 3-year time limit for filing a court claim for review of agency or retirement system final decisions.

OPM intends to amend the FEGLI Program regulation to provide a timeframe for individuals seeking judicial Current OPM regulations provide a 31-day time limit for administrative review under FEGLI but do not state a time limit for seeking judicial review of FEGLI decisions. Accordingly, OPM has specified a 3-year time limit for filing a claim for court review of FEGLI decisions.

OPM is granted the authority in 5 U.S.C. 8716 to prescribe regulations to carry out the FEGLI Program. Thus, we propose to amend the FEGLI regulation to add section 5 CFR 870.106 concerning court review of final administrative life insurance decisions. The proposed rule also reinforces that individuals must first exhaust administrative appeal rights before seeking judicial review.

OPM has examined the impact of this proposed rule as required by Executive Order 12866 and Executive Order 13563, which directs agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public, health, and safety effects, distributive impacts, and equity). A regulatory impact analysis must be prepared for major rules with economically significant effects of $100 million or more in any one year. This rule is not considered a major rule because there will be a minimal impact on costs to Federal agencies.

I certify that this regulation will not have a significant economic impact on a substantial number of small entities because the regulation only affects life insurance benefits of Federal employees and retirees.

This rule has been reviewed by the Office of Management and Budget in accordance with Executive Order 12866.

We have examined this rule in accordance with Executive Order 13132, Federalism, and have determined that this rule will not have any negative impact on the rights, roles and responsibilities of State, local, or tribal governments.

Accordingly, OPM is proposing to amend 5 CFR part 870 as follows:

Executive Order 12866

This rule has been determined to be not-significant for the purposes of Executive Order 12866 and, therefore, it has not been reviewed by the OMB.

Pursuant to the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 35, subchapter I), the collections of information in this rule have been approved by OMB under control number 0563-0053.

FCIC is committed to complying with the E-Government Act of 2002, to promote the use of the Internet and other information technologies to provide increased opportunities for citizen access to Government information and services, and for other purposes.

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local, and tribal governments and the private sector. This rule contains no Federal mandates (under the regulatory provisions of title II of the UMRA) for State, local, and tribal governments or the private sector. Therefore, this rule is not subject to the requirements of sections 202 and 205 of UMRA.

It has been determined under section 1(a) of Executive Order 13132, Federalism, that this rule does not have sufficient implications to warrant consultation with the States. The provisions contained in this rule will not have a substantial direct effect on States, or on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.

This rule has been reviewed in accordance with the requirements of Executive Order 13175, Consultation and Coordination with Indian Tribal Governments. The review reveals that this regulation will not have substantial and direct effects on Tribal governments and will not have significant Tribal implications.

FCIC certifies that this regulation will not have a significant economic impact on a substantial number of small entities. Program requirements for the Federal crop insurance program are the same for all producers regardless of the size of their farming operation. For instance, all producers are required to submit an application and acreage report to establish their insurance guarantees and compute premium amounts, and all producers are required to submit a notice of loss and production information to determine the amount of an indemnity payment in the event of an insured cause of crop loss. Whether a producer has 10 acres or 1000 acres, there is no difference in the kind of information collected. To ensure crop insurance is available to small entities, the Federal Crop Insurance Act authorizes FCIC to waive collection of administrative fees from limited resource farmers. FCIC believes this waiver helps to ensure that small entities are given the same opportunities as large entities to manage their risks through the use of crop insurance. A Regulatory Flexibility Analysis has not been prepared since this regulation does not have a significant impact on a substantial number of small entities, and, therefore, this regulation is exempt from the provisions of the Regulatory Flexibility Act (5 U.S.C. § 605).

This program is listed in the Catalog of Federal Domestic Assistance under No. 10.450.

This program is not subject to the provisions of Executive Order 12372, which requires intergovernmental consultation with State and local officials. See 2 CFR part 415, subpart C.

This rule has been reviewed in accordance with Executive Order 12988 on civil justice reform. The provisions of this rule will not have a retroactive effect. The provisions of this rule will preempt State and local laws to the extent such State and local laws are inconsistent herewith. With respect to any direct action taken by FCIC or action by FCIC directing the insurance provider to take specific action under the terms of the crop insurance policy, the administrative appeal provisions published at 7 CFR part 11 must be exhausted before any action against FCIC for judicial review may be brought.

This action is not expected to have a significant economic impact on the quality of the human environment, health, or safety. Therefore, neither an Environmental Assessment nor an Environmental Impact Statement is needed.

FCIC proposes to amend the Common Crop Insurance Regulations (7 CFR part 457) by revising 7 CFR 457.119 Texas Citrus Fruit Crop Insurance Provisions, to be effective for the 2018 and succeeding crop years. Changes are intended to improve the insurance coverage offered, address program integrity issues, simplify program administration, and improve clarity of the policy provisions. Specifically, this proposed rule intends to modify or clarify certain definitions, clarify unit establishment, clarify substantive provisions for consistency with terminology changes, modify the insured causes of loss, clarify required timing for loss notices, modify portions of loss calculation formulas, and address potential misinterpretations or ambiguity related to these issues.

Some of the proposed changes result from the United States Department of Agriculture (USDA) Acreage Crop Reporting Streamlining Initiative (ACRSI), which has an objective of using common standardized data and terminology to consolidate and simplify reporting requirements for producers. Specifically, ACRSI is an initiative to reengineer the procedures, processes, and standards to simplify commodity, acreage, and production reporting by producers, eliminate or minimize duplication of information collection by multiple agencies, and reduce the burden on producers, allowing the producers to report this information through FSA county office service centers, insurance agents or through precision agriculture technology capabilities. USDA has made a concerted effort to standardize terms across USDA agencies as much as possible to allow the sharing of data, thereby reducing the burden on producers in reporting their information. Many of the changes proposed in this rule are a part of that effort. For example, as part of ACRSI, FCIC is proposing to change the term “crop” to “citrus fruit commodity” and to rename the “citrus fruit commodities” to be consistent with the crop names used by other USDA agencies. FCIC has been working with other USDA agencies to agree on appropriate terminology for crop reporting. These terms are part of a Commodity Validation Table that is updated as these terms are agreed upon. This change will help facilitate information sharing among agencies, a step that is necessary to achieve an ACRSI goal of relieving producers of the burden of reporting the same information multiple times to different USDA agencies. The addition of the term “citrus fruit group” is intended to negate the impact of changes to “citrus fruit commodity” names on coverage levels, unit structure, and administrative fees. The “citrus fruit groups” for each “citrus fruit commodity” will be listed in the Special Provisions. The “citrus fruit groups” will be the basis for determining coverage levels and identifying the insured crop. These proposed changes are not expected to change the current basis by which coverage levels are selected, basic units are established, and administrative fees are assessed.

For consistency with ACRSI objectives, FCIC proposes to expand the category of “type” in the actuarial documents to include four subcategories named “commodity type,” “class,” “subclass,” and “intended use.” FCIC is also planning to expand the category of “practice” in the actuarial documents to include four subcategories named “cropping practice,” “organic practice,” “irrigation practice,” and “interval.” Proposed changes to the Texas Citrus Fruit Crop Insurance Provisions, such as replacing references to the term “type” with the term “commodity type” will provide a method for this transition.

The proposed changes are as follows:

1. FCIC proposes to remove the paragraph immediately preceding section 1, which refers to the order of priority if a conflict exists among the policy provisions. This same provision is contained in the Basic Provisions. Therefore, the appearance here is duplicative and should be removed from the Texas Citrus Fruit Crop Insurance Provisions.

FCIC proposes to remove all references to section titles of the Basic Provisions used in the Texas Citrus Fruit Crop Insurance Provisions, while retaining the section numbers. The section titles are not necessary to reference the section and removing these titles will prevent FCIC from having to revise the Crop Provisions should these section titles change in the Basic Provisions. This information proposed to be removed is currently contained in parenthesis following references to section numbers of the Basic Provisions throughout the Texas Citrus Fruit Crop Insurance Provisions.

2. Section 1 (“Definitions”)—FCIC proposes to remove the definition of “crop” and replace it with a definition of “citrus fruit commodity” because the actuarial documents refer to commodities rather than crops. FCIC proposes to replace the term “crop” with the term “insured crop” where appropriate throughout the Crop Provisions. The insured crop will be based on the “citrus fruit group” in accordance with the proposed revisions to section 7. FCIC proposes to include the “citrus fruit commodity” names in the definition to enable the insured to more easily determine the citrus fruit commodities that are insurable under the Texas Citrus Fruit Crop Insurance Provisions. The new “citrus fruit commodity” names will combine several current “crops” into a single “citrus fruit commodity.” For example, the current crops “Early & Midseason Oranges” and “Late Oranges” will become insurable types under the new “citrus fruit commodity” of “oranges.” FCIC proposes this change because of ACRSI. FCIC has been working with other USDA agencies to agree on appropriate terminology for crop reporting. These terms are part of a Commodity Validation Table that is updated as these terms are agreed upon. This proposed change in terminology does not change the varieties of citrus that are insurable.

FCIC proposes to add the definition of “citrus fruit group.” The term “citrus fruit group” refers to a method of grouping combinations of commodity types and intended uses within the citrus fruit commodity through the Special Provisions for the purposes of electing coverage levels and determining the insured crop, which is the basis for establishing basic units, guarantees, and assessing administrative fees. FCIC proposes this change because of ACRSI. Because producers will be reporting using the terminology contained in the Commodity Validation Table, FCIC has changed the commodity names to match this agreed upon terminology. However, the citrus fruit group concept is being implemented to prevent changes to how the crop can be insured. For example, this change will allow producers who report Valencia oranges with an intended use of juice and Navel oranges with an intended use of fresh to continue to insure these as separate crops even though they will both be categorized for reporting under the commodity of oranges.

FCIC proposes to add the definition of “commodity type” because this is a new category that will be added to the actuarial documents for citrus fruit commodities for the 2018 crop year. Commodity type will initially be displayed in the actuarial documents as a subcategory of type. The expected combinations of commodity types and intended uses will be grouped into citrus fruit groups as shown in the table below.

FCIC proposes to revise the definition of “excess wind” by: Specifying the equivalent wind speed in knots; clarifying wind speed reporting at U.S. National Weather Service (NWS) reporting stations; and adding a clause to allow additional acceptable wind reporting stations to be identified in the Special Provisions. FCIC proposes these changes to provide clarity and add flexibility to use other weather reporting stations if additional data points are needed in the future.

FCIC proposes to add a definition of “intended use.” Currently, insureds can select between the two types of fresh and juice. For the 2018 crop year, the type category in the actuarial documents will be expanded to include subcategories for “commodity type,” “class,” “subclass,” and “intended use.” Insureds will continue to be able to select types for fresh and juice, but the intended use will be specified in both the type category and the new intended use category. This change only affects how they types are presented in the actuarial documents and will not affect available coverage or reporting requirements. The proposed definition is consistent with the definition contained in the Florida Citrus Fruit Crop Insurance Provisions.

FCIC proposes to revise the definition of “interplanted” to specify that the Crop Provisions definition is used in lieu of the Basic Provisions definition. In the revised definition, FCIC proposes to change the term “crop” to “agricultural commodity.” Agricultural commodity is currently defined in the Basic Provisions as any crop or other commodity produced, regardless of whether or not it is insurable. As stated previously, FCIC is changing the term “crop” to “insured crop” as appropriate throughout the Crop Provisions. However, for the definition of interplanted acreage, changing “crop” to “insured crop” would change the meaning of the provision by preventing interplanted from applying to insurable crops interplanted with agricultural commodities not insured under the Texas Citrus Fruit Crop Provisions. Therefore, FCIC proposes to change the term “crop” to “agricultural commodity” in the definition of interplanted acreage. This proposed change will allow “interplanted” to apply to acreage in which an insured crop is interplanted with another insured crop or uninsured agricultural commodity, regardless of whether or not the additional insured crop or uninsured agricultural commodity is insurable under the Texas Citrus Fruit Crop Insurance Provisions or any other Crop Provisions.

FCIC proposes to remove the definition of “local market price.” FCIC proposes to remove this definition because FCIC proposes to remove the only reference to local market price in the Texas Citrus Fruit Crop Provisions, contained in paragraph 12(e).

FCIC proposes to revise the definition of “production guarantee (per acre)” to clarify that the Crop Provisions definition is used in lieu of the Basic Provisions definition. The Basic Provisions contains a different definition of “production guarantee (per acre)” and the Crop Provisions definition has already replaced that definition, but this additional language confirms that interpretation. FCIC also proposes to clarify this “production guarantee (per acre)” definition in the Crop Provisions by specifying that requirements of section 3(e) determine the yield used for calculating the production guarantee.

FCIC proposes to remove the definition of “varieties” because all references to the term are proposed for removal and replacement with the term “commodity type” in the Crop Provisions.

3. Section 2 (“Unit Division”)—FCIC proposes to revise paragraph 2(a) to state that basic units will be established for each insured crop in accordance with section 1 of the Basic Provisions. The definition of basic unit in section 1 of the Basic Provisions states that basic units include all insurable acreage of the insured crop in the county on the date coverage begins for the crop year: (1) In which you have 100 percent crop share; or (2) which is owned by one person and operated by another person on a share basis. Separate basic units will be established for each citrus fruit group because FCIC proposes to treat each citrus fruit group as a separate insured crop. For example, under the new citrus fruit commodity of oranges, all early and midseason oranges will be further classified under one citrus fruit group and all late oranges will be further classified under another citrus fruit group. These designations mean all of the insured's early and midseason orange acreage can be insured as one basic unit and all of the insured late orange acreage can be insured as a separate basic unit. This proposed change in terminology will allow insureds to keep their current unit structure under the new classification system.

FCIC proposes to revise paragraph 2(c) to state that optional units may be established by either of the following options, but not both options: (1) In accordance with Section 34(c) of the Basic Provisions, except as provided in section 2(b) of these Crop Provisions; or (2) non-contiguous land. FCIC proposes this revision to clarify that the insured has a choice of optional units as allowed by the Basic Provisions (except irrigated or non-irrigated practices) or by non-contiguous land. As currently worded, the provision could be misinterpreted to mean that optional units as allowed in the Basic Provisions are not allowed under the Texas Citrus Fruit Crop Insurance Provisions. In addition, the official Code of Federal Regulations publication appears to have inadvertently omitted the following language from the existing version that appeared in the applicable Federal Register Notice establishing this language: The words “. . . optional units may be established if each . . .” should have previously appeared immediately following the word “number,” and immediately before the provision ending phrase, “. . . optional unit is located on non-contiguous land.” See 62 FR 65,130, 65,169 (Dec. 10, 1997). This omission by the official Code of Federal Regulations could contribute to this potential misinterpretation that FCIC proposes to correct.

4. Section 3 (“Insurance Guarantees, Coverage Levels, and Prices for Determining Indemnities”)—FCIC proposes to revise paragraph 3(a) by adding language to allow the insured to continue selecting separate coverage levels and price elections by insured crop (i.e., citrus fruit group) under the new definitions. For example, under the new designation of citrus fruit commodity oranges, all early and midseason oranges will be further classified together as one citrus fruit group which requires the insured to select the same coverage level and percent of price election for all fruit insured under this citrus fruit group. Under the new designation of citrus fruit commodity oranges, late oranges will be further classified under a separate citrus fruit group, which will allow the insured to continue selection of a different coverage level and percent of price election than selected for its early and midseason orange acreage. These terminology revisions will allow the insured to continue electing coverage levels and price elections on the same basis as they currently elect coverage levels and price elections, while continuing to further ACRSI goals. FCIC also proposes to update the example in paragraph 3(a) for consistency with these proposed changes.

FCIC proposes to revise paragraph 3(b) by removing the instructions for calculating the production guarantee per acre from paragraphs 3(b)(1) and 3(b)(2). FCIC proposes this change because the same information is already contained in the definition of “production guarantee (per acre).” Removing these instructions from 3(b)(1) and 3(b)(2) will prevent perceived conflict between these provisions and that definition because the information contained in paragraphs 3(b)(1) and 3(b)(2) for calculating the production guarantee was intended as duplicative, yet is stated differently than the information contained in the definition of “production guarantee (per acre).” FCIC also proposes to revise paragraph 3(b) to state that the production guarantee is progressive and increases from the first stage to the second stage guarantee. FCIC also proposes to remove the term “final,” and leave only the term “second,” in paragraph 3(b)(2). Both final stage and second stage have the same meaning in the Texas Citrus Fruit Crop Insurance Provisions because there are only two stages and the terms are used interchangeably. Therefore, FCIC proposes to remove the term “final” to prevent potential confusion if the terms “second” and “final” are erroneously perceived to have different meanings.

FCIC proposes to revise paragraph 3(d) by removing the term “type” and replacing the term “type” with the phrase “commodity type and intended use.” This change will provide consistency with the terminology revisions implemented to further ACRSI goals. FCIC proposes to revise paragraphs 3(d)(4) and 3(d)(4)(i) by removing references to “perennial crop” and “crop” and replacing these terms with the term “agricultural commodity.” This change will provide consistency with the proposed changes to the definition of “interplanted.” The proposed change will allow the term “interplanted” to apply to acreage in which an insured crop under these Crop Provisions (e.g., citrus fruit group) is interplanted with another insured crop or uninsured agricultural commodity, regardless of whether or not the other agricultural commodity is insurable under the Texas Citrus Fruit Crop Insurance Provisions or any other Crop Provisions.

FCIC proposes to designate the undesignated paragraph following paragraph 3(d)(4)(iii) as paragraph 3(e) and redesignate paragraphs 3(e) and 3(f) as paragraphs 3(f) and 3(g). FCIC proposes to revise newly designated paragraph 3(e) to specify the yield adjustment timing and method used, if circumstances occur that may reduce the yield potential, based on when the circumstance occurred. The current provision states that the Approved Insurance Provider will reduce the yield used to establish the production guarantee, but does not explicitly provide additional explanation for timing and method of certain specific circumstances. The proposed paragraph 3(e)(1) addresses circumstances that occurred before the beginning of the insurance period and requires reduction of the yield used to establish the production guarantee for the current crop year regardless of whether the circumstance was due to an insured or uninsured cause of loss and requires the Insured to report these circumstances that occurred prior to the insurance period no later than the production reporting date. The proposed paragraph 3(e)(2) addresses circumstances that occurred after the beginning of the insurance period and the insured notifies the Approved Insurance Provider of these circumstances by the production reporting date. The proposed paragraph 3(e)(2) will require the yield used to establish the production guarantee to be reduced for the current crop year only if the potential reduction in the yield used to establish the production guarantee is due to an uninsured cause of loss. The proposed paragraph 3(e)(3) addresses circumstances that may reduce the yield that occurred after the beginning of the insurance period and the insured fails to notify the Approved Insurance Provider of these circumstances by the production reporting date. The proposed paragraph 3(e)(3) requires an amount equal to the reduction in the yield to be added to the production to count calculated in paragraph 12(c) of these Crop Provisions due to uninsured causes. Additionally, the proposed paragraph 3(e)(3) requires reduction of the yield used to establish the production guarantee for the subsequent crop year to reflect any reduction in the productive capacity of the trees or the yield potential of the insured acreage. These provisions are similar to provisions that FCIC has recently added to other perennial crop policies, such as the Arizona-California Citrus Crop Insurance Provisions. Adding these provisions is intended to remove potential ambiguity regarding the consequences when circumstances occur that will reduce the yield potential and to promote consistency with administration of similar policies such as the Arizona-California Citrus Crop Insurance Provisions.

FCIC proposes to revise newly designated paragraph 3(g) by removing the reference to “one-year lag period.” The phrase is not necessary to describe when production must be reported. Therefore, FCIC proposes to delete this reference to prevent confusion regarding production reporting. FCIC also proposes to update the example in this paragraph with contemporary dates. This proposed change is intended to prevent the policy from appearing outdated. FCIC also proposes to revise the sentence structure of this provision to provide clarity and consistency with similar provisions in these Crop Provisions that are used in lieu of the Basic Provisions.

5. Section 7 (“Insured Crop”)—FCIC proposes to redesignate the introductory paragraph of section 7 as paragraph (a) and redesignate paragraphs 7(a) through 7(f) as 7(a)(1) through 7(a)(6). FCIC proposes to revise the newly designated paragraph (a) by revising language to designate the insured crop as each “citrus fruit group” the insured elects to insure. This change in section 7 is necessary to prevent changes to assessment of administrative fees because of revisions to commodity names. This change will also allow the insured to continue to elect to insure some citrus acreage and not insure other citrus acreage on the same basis as is currently allowed.

FCIC proposes to revise the newly designated paragraph 7(a)(2) to clarify that the insured crop must be grown on trees adapted to the area. The current provision states the acreage must be adapted to the area. However, the trees on which the insured crop is grown must be adapted to the area.

FCIC proposes to revise the newly designated paragraph 7(a)(3) by removing the term “are” and adding the term “is” in its place. FCIC proposes this change to maintain verb usage consistent with the language in newly redesignated paragraph 7(a).

FCIC proposes to add a new paragraph 7(b) to clarify assessment of administrative fees. FCIC has received requests to clarify how administrative fees are assessed in the Crop Provisions. Because each citrus fruit group will be designated as a separate insured crop, each citrus fruit group will be assessed a separate administrative fee in accordance with section 7 of the Basic Provisions and section 6 of the Catastrophic Risk Protection Endorsement.

6. Section 8 (“Insurable Acreage”)—FCIC proposes to revise section 8 by adding the words “fruit group” immediately following the word “citrus” and removing references to the term “crop” and replacing them with the term “agricultural commodity,” except FCIC will replace the first instance of “crop” appearing in section 8 with “insured crop.” These changes will provide consistency with the proposed changes to the definition of “interplanted.” FCIC also proposes to add language to clarify interplanted acreage is not insurable unless a citrus fruit group is interplanted with another perennial agricultural commodity.

7. Section 10 (“Causes of Loss”)—FCIC proposes to add provisions in paragraph 10(a) that allow insects and disease as insurable causes of loss unless excluded or otherwise restricted through the Special Provisions, provided production losses are not due to damage resulting from insufficient or improper application of control measures recommended by agricultural experts. FCIC proposes to remove the provisions in paragraph 10(b)(1) that only provide coverage against damage or loss of production due to insects and disease if an insurable cause of loss prevents the proper application of control measures, causes properly applied control measures to be ineffective, or causes disease or insect infestation for which no effective control mechanism is available. For Texas citrus fruit, the language contained in paragraph 10(b)(1) requires a determination that can be difficult to make with regard to whether an underlying cause of loss prevented the proper application of control measures, caused properly applied control measures to be ineffective, or caused a disease or insect infestation for which no effective control mechanism is available. The proposed change removes this language and provides more comprehensive coverage for citrus growers. This proposed change is similar to changes FCIC has made to other perennial APH policies, such as the Arizona-California Citrus Crop Insurance Provisions, as they have been revised.

The proposed language provides FCIC with greater flexibility to exclude or restrict coverage through the Special Provisions. This greater flexibility is intended to protect program integrity and insured interests by allowing FCIC to exclude or restrict coverage for certain diseases for which limited controls or mitigation practices are available. For example, FCIC plans to exclude citrus greening (Huanglongbing) from coverage through the Special Provisions. However, FCIC seeks input from interested persons regarding exclusion of coverage for this disease through the Special Provisions.

Citrus greening is a deadly bacterial disease that can infect nearly all citrus species (Chung, K-R., and R. H. Brlansky. “Citrus diseases exotic to Florida: Huanglongbing (citrus greening).” (2009).). The bacteria disrupts the vascular system of the trees and eventually leads to tree death (Jagoueix, Sandrine, Joseph Marie Bové, and Monique Garnier. “PCR detection of the two <<Candidatus>> liberobacter species associated with greening disease of citrus.” Molecular and cellular probes 10.1 (1996): 43-50.). Currently, no known adequate cure exists for citrus greening (Kobori, Youichi, et al. “Dispersal of adult Asian citrus psyllid, Diaphorina citri Kuwayama (Homoptera: Psyllidae), the vector of citrus greening disease, in artificial release experiments.” Applied entomology and zoology 46.1 (2011): 27-30.). Trees infected with citrus greening exhibit symptoms that include blotchy yellow leaves and misshapen, poorly developed green fruit with aborted seeds and bitter taste (Graca, JV da. “Citrus greening disease.” Annual Review of Phytopathology 29.1 (1991): 109-136.). However, identification of the disease can be difficult because symptoms resemble nutrient deficiencies (Li, Wenbin, John S. Hartung, and Laurene Levy. “Quantitative real-time PCR for detection and identification of Candidatus Liberibacter species associated with citrus huanglongbing.” Journal of microbiological methods 66.1 (2006): 104-115.).

Citrus greening is vectored by the Asian citrus psyllid (Diaphorina citri) (French, J. V., C. J. Kahlke, and J. V. Da Graça. “First record of the Asian citrus psylla, Diaphorina citri Kuwayama (Homoptera: Psyllidae) in Texas.” Subtropical Plant Science 53 (2001): 14-15.). There are pesticides available that, if applied correctly, can help minimize the spread of the disease by controlling the psyllid (Grafton-Cardwell, Elizabeth E., Lukasz L. Stelinski, and Philip A. Stansly. “Biology and management of Asian citrus psyllid, vector of the huanglongbing pathogens.” Annual review of entomology 58 (2013): 413-432.). Properly applied pesticides may be the best current option growers have to help minimize the spread of the disease. However, even if pesticides are applied properly and infected trees are removed from commercial orchards, there are other factors that make control and eradication of the disease problematic. Disease control is complicated by delay of disease symptom appearance in infected trees (Stokstad, Erik. “Dread citrus disease turns up in California, Texas.” Science 336.6079 (2012): 283-284.). Therefore, a tree may be infected and the disease may spread to other trees before disease presence is identified. Disease eradication can be challenging due to adjacent or nearby abandoned or improperly managed groves, and yard trees in residential areas (Tiwari, Siddharth, et al. “Incidence of Candidatus Liberibacter asiaticus infection in abandoned citrus occurring in proximity to commercially managed groves.” Journal of economic entomology 103.6 (2010): 1972-1978.). Trees in these areas can serve as reservoirs for the disease inoculum. Although the Asian citrus psyllid can only fly relatively short distances, it can be carried greater distances by wind (Hall, D. G., and M. G. Hentz. “Seasonal flight activity by the Asian citrus psyllid in east central Florida.” Entomologia experimentalis et applicata 139.1 (2011): 75-85.). Therefore, extreme wind events such as hurricanes and tornados may also exacerbate the spread of citrus greening.

Citrus greening was first discovered in Florida in August 2015 and since spread to nearly all counties in Florida with citrus (Brlansky, R. H., et al. “2006 Florida citrus pest management guide: Huanglongbing (citrus greening).” UF/IFAS Extension (2012).). The Asian citrus psyllid was first detected in Texas in 2001 (French, J. V., C. J. Kahlke, and J. V. Da Graça. “First record of the Asian citrus psylla, Diaphorina citri Kuwayama (Homoptera: Psyllidae) in Texas.” Subtropical Plant Science 53 (2001): 14-15.). The presence of the psyllid in Texas has resulted in quarantines restricting movement of citrus plant material and citrus nursery stock. Citrus greening research is currently occurring, including 2014 Farm Bill funding which authorized approximately $125 million of the USDA Specialty Crop Research Initiative toward citrus health research over the next five years. USDA Farm Service Agency (FSA) does currently provide assistance to cover the replacement and establishment of infected trees through its Tree Assistance Program.

The current Texas Citrus Fruit Crop Insurance Provisions may appear to provide some level of protection against production loss from citrus greening, but the current policy is unlikely to allow loss payment for citrus greening. The current policy language requires linkage of production loss from insects and disease to another underlying covered cause of loss. For example, a hurricane may occur that could prevent or otherwise negatively impact control measures by spreading the disease to outbreak levels. However, it is unlikely that citrus greening would trigger an indemnity under this scenario because citrus greening symptom latency is unlikely to satisfy the policy provision in section 9 of the Crop Provisions allowing an indemnity payment only for losses occurring within the insurance period. Therefore, if a hurricane spreads the disease into a grove and symptoms do not appear until the next crop year, the current policy would not cover production loss because the insured cause of loss (i.e., hurricane) that prevented or impacted control measures occurred outside the insurance period in which production loss occurred.

Specifically, under circumstances that prevented the proper application of control measures or caused properly applied control measures to be ineffective, it is unlikely that losses in a given year would exceed the deductible under the current policy due to slow disease progression. For example, if excess precipitation prevented or rendered ineffective proper pesticide application, the production loss from trees infected by this event are unlikely to exceed the deductible for the current crop year, even if the highest coverage level was selected. In addition, even if events happened in successive years, the Crop Provisions also authorize underwriting controls that require acreage adjustment when trees are removed or the guarantee to be reduced for existing damage. These underwriting controls would likely prevent or reduce losses due to citrus greening from exceeding the deductible in most situations. Although it may be possible, under some circumstances, that indemnities due to citrus greening could be triggered, the current policy provides subjective or little assurance of protection against citrus greening for the reasons stated above.

When changes to the Texas Citrus Fruit Crop Provisions are finalized, FCIC intends to conduct a full rate review to examine the impact of all policy changes combined with past loss experience, which could increase or decrease premium rates. However, if the proposed language covered citrus greening, FCIC would likely have to increase premium rates to account for this risk, with additional rate increases possible based on loss experience to maintain actuarial soundness under section 506(n)(2) (7 U.S.C. 1506(n)(2)) of the Federal Crop Insurance Act (FCIA or the Act). The benefit of the coverage may not be perceived by growers to be worth the additional premium cost because underwriting controls necessary to protect program integrity are unlikely to allow citrus greening indemnities in most scenarios. Consequently, allowing such coverage may require Approved Insurance Providers to explain underwriting controls precluding indemnity payment when the insured believed it had coverage against citrus greening. In addition, if citrus greening indemnities became widespread and underwriting controls were insufficient to limit indemnities, premium rates could increase rapidly. Texas citrus producers have expressed concern to FCIC about citrus greening coverage contributing to increasing premium rates. FCIC plans to exclude citrus greening as an insurable cause of loss through the Special Provisions to protect program integrity and prevent adverse impacts on the crop insurance delivery system for Texas citrus fruit policies.

7. Section 11 (“Duties in the Event of Damage or Loss”)—FCIC proposes to revise section 11 by adding a new paragraph (a), designating the introductory paragraph as (b), and redesignating paragraphs (a) and (b) as (b)(1) and (b)(2) respectively. FCIC proposes the new paragraph (a) to clarify that, in accordance with section 14 of the Basic Provisions, the insured must leave representative samples for appraisal purposes. The Basic Provisions stipulate representative samples must be left if required by the Crop Provisions or the Special Provisions. Representative samples are necessary to appraise damaged production for indemnity claim purposes. FCIC also proposes new paragraph (a) will state that in lieu of the requirements of section 14(c)(3) of the Basic Provisions, the Approved Insurance Provider will determine which trees must remain unharvested so that the Approved Insurance Provider may inspect these trees in accordance with FCIC procedures. Section 14(c)(3) of the Basic Provisions states that unless otherwise specified in the Crop Provisions or Special Provisions, the samples of the crop in each field in the unit must be 10 feet wide and extend the entire length of the rows, if the crop is planted in rows, or if the crop is not planted in rows, the longest dimension of the field. These requirements in the Basic Provisions are not appropriate for crops insured under these Crop Provisions. Therefore, FCIC intends the proposed revision to allow FCIC to issue crop specific guidance for the insurance provider to use to instruct the insured on which trees must remain unharvested.

FCIC proposes to revise the newly designated paragraph 11(b)(2) to clarify that if the insured intends to claim an indemnity on any unit, the insured must notify the Approved Insurance Provider at least 15 days prior to the beginning of harvest, or within 24 hours if damage is discovered during harvest, so the Approved Insurance Provider may have an opportunity to inspect the unit. This change provides a required timeframe for reporting damage and is consistent with revisions to other perennial crop policies, such as the Arizona-California Citrus Crop Insurance Provisions.

8. Section 12 (“Settlement of Claim”)—FCIC proposes to revise paragraph 12(b) by removing the phrase “crop, or variety if applicable” and inserting the phrase “combination of commodity type and intended use” in its place. FCIC proposes this change because “commodity type” listed in the actuarial documents will coincide with the current crop names and the price elections for each combination of commodity type and intended use will determine insurance elections for the unit.

FCIC proposes to revise paragraph 12(d) to clarify the provision applies only to citrus fruit insured with an intended use of juice. FCIC proposes this change to clarify the applicable citrus fruit type subcategory for applying this adjustment. Fresh and juice are currently type designations in the actuarial documents. However, for the 2018 crop year for citrus fruit groups insured under the Texas Citrus Fruit Crop Insurance Provisions, FCIC plans to expand the type category in the actuarial documents to include additional subcategories such as commodity type and intended use. Fresh and juice designations will be contained in the intended use category.

FCIC proposes to revise paragraph 12(e) by removing the fresh fruit terminology and replacing it with the intended use of fresh terminology. FCIC proposes this change because the fresh fruit option will be identified in the actuarial documents under the intended use category. The fresh fruit option will be elected by reporting the intended use of fresh. Therefore, to provide consistency with terms used in actuarial documents, FCIC proposes to remove the fresh fruit terminology and replace this terminology with intended use of fresh.

FCIC also proposes to revise paragraph 12(e) by revising the calculation for adjusting production to count for fruit insured as fresh that is not marketable as fresh due to insured causes of loss. The current provision states to use the local market price for the week before damage occurred, but does not specify procedures if a local market price is not available. FCIC publishes an annual bulletin that provides prices for settling claims because local market prices are not available for a portion of the year when processing plants are idle. FCIC proposes to revise the calculation to require the number of tons of damaged citrus to be multiplied by a Fresh Fruit Factor contained in the Special Provisions. The Fresh Fruit Factor will represent the ratio of the value of damaged fruit to the value of undamaged fresh fruit. The Fresh Fruit Factor will be determined using historical prices and other available data as applicable. This proposed change will provide consistency in the loss adjustment process, prevent delays in claims, and lessen the burden on the Approved Insurance Providers and FCIC.

Accordingly, as set forth in the preamble, the Federal Crop Insurance Corporation proposes to amend 7 CFR part 457 effective for the 2018 and succeeding crop years as follows:

The revisions and additions read as follows:

We invite you to send any written relevant data, views, or arguments about this proposed AD. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2015-8131; Directorate Identifier 2015-NM-073-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this proposed AD. We will consider all comments received by the closing date and may amend this proposed AD because of those comments.

We will post all comments we receive, without change, to http://www.regulations.gov, including any personal information you provide. We will also post a report summarizing each substantive verbal contact we receive about this proposed AD.

On February 20, 2008, we issued AD 2008-05-06, Amendment 39-15400 (73 FR 11538, March 4, 2008), for certain The Boeing Company Model 737-100, -200, -300, -400, and -500 series airplanes. AD 2008-05-06 requires repetitive inspections for fatigue cracking in the longitudinal floor beam web, upper chord, and lower chord located at certain body stations, and repair if necessary. AD 2008-05-06 refers to Boeing Service Bulletin 737-57-1296, dated June 13, 2007, as an appropriate source of service information for accomplishing the required actions. AD 2008-05-06 resulted from reports of cracks in the center wing box longitudinal floor beams, upper chord, and lower chord. We issued AD 2008-05-06 to detect and correct fatigue cracking of the upper and lower chords and web of the longitudinal floor beams, which could result in rapid loss of cabin pressure.

Since we issued AD 2008-05-06, Amendment 39-15400 (73 FR 11538, March 4, 2008), Boeing issued Boeing Service Bulletin 737-57-1296, Revision 1, dated September 26, 2012, which is an alternative method of compliance (AMOC) for the actions required by AD 2008-05-06. We have determined that Boeing Service Bulletin 737-57-1296, Revision 1, dated September 26, 2012, inadvertently omitted installation of tapered fillers during the repair and preventive modification of certain longitudinal floor beam webs. Omission of the tapered fillers creates a preload condition that may promote undetected fatigue cracking and subsequent failure of the longitudinal floor beams at buttock line (BL) 24.82 and BL 45.57.

We reviewed Boeing Alert Service Bulletin 737-57A1296, Revision 2, dated April 1, 2015. The service information describes procedures for various inspections for fatigue cracks in the longitudinal floor beam web, upper chord, and lower chord, located at the applicable body stations, repairs (including related investigative and corrective actions), and preventive modifications (including related investigative and corrective actions) that terminate the repetitive inspections. The service information also describes procedures for an inspection to determine if tapered fillers are installed, and related investigative and corrective actions. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section of this NPRM.

We are proposing this AD because we evaluated all the relevant information and determined the unsafe condition described previously is likely to exist or develop in other products of these same type designs.

This proposed AD would retain all requirements of AD 2008-05-06, Amendment 39-15400 (73 FR 11538, March 4, 2008). This proposed AD would also require accomplishing the actions specified in the service information described previously, except as discussed under “Differences Between this Proposed AD and the Service Information.” For information on the procedures and compliance times, see this service information at http://www.regulations.gov by searching for and locating Docket No. FAA-2015-8131.

The phrase “related investigative actions” is used in this proposed AD. “Related investigative actions” are follow-on actions that (1) are related to the primary action, and (2) further investigate the nature of any condition found. Related investigative actions in an AD could include, for example, inspections.

The phrase “corrective actions” is used in this proposed AD. “Corrective actions” are actions that correct or address any condition found. Corrective actions in an AD could include, for example, repairs.

Since AD 2008-05-06, Amendment 39-15400 (73 FR 11538, March 4, 2008), was issued, the AD format has been revised, and certain paragraphs have been rearranged. As a result, the corresponding paragraph identifiers have been redesignated in this proposed AD, as listed in the following table:

In addition, airplane groups identified in Boeing Service Bulletin 737-57-1296, dated June 13, 2007, which is referred to as the appropriate source of service information for accomplishing the actions required by AD 2008-05-06, Amendment 39-15400 (73 FR 11538, March 4, 2008), do not, in all cases, match the airplane groups for Boeing Alert Service Bulletin 737-57A1296, Revision 2, dated April 1, 2015, which is the appropriate source of service information for accomplishing the new actions specified in this proposed AD.

Also, operators of Group 5 airplanes identified in Boeing Alert Service Bulletin 737-57A1296, Revision 2, dated April 1, 2015, must contact the FAA for actions instead of accomplishing the actions specified in Boeing Alert Service Bulletin 737-57A1296, Revision 2, dated April 1, 2015. The procedures for inspections and corrective actions specified in Boeing Alert Service Bulletin 737-57A1296, Revision 2, dated April 1, 2015, do not apply to these airplanes (line numbers 1 through 291).

Boeing Alert Service Bulletin 737-57A1296, Revision 2, dated April 1, 2015, specifies to contact the manufacturer for instructions on how to repair certain conditions, but this proposed AD would require repairing those conditions in one of the following ways:

• In accordance with a method that we approve; or

• Using data that meet the certification basis of the airplane, and that have been approved by the Boeing Commercial Airplanes Organization Designation Authorization (ODA) whom we have authorized to make those findings.

We estimate that this proposed AD affects 652 airplanes of U.S. registry.

We estimate the following costs to comply with this proposed AD:

We estimate the following costs to do any necessary repairs that would be required based on the results of the proposed inspection. We have no way of determining the number of aircraft that might need these repairs:

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, Section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority.

We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701, “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

We have determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed above, I certify that the proposed regulation:

(1) Is not a “significant regulatory action” under Executive Order 12866,

(2) Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979),

(3) Will not affect intrastate aviation in Alaska, and

(4) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:

In July 2012, the Commission published a Federal Register notice initiating a comprehensive regulatory review of the Jewelry Guides.1 As part of this review, the Commission has reviewed the public comments it received in response to the notice, as well as the transcript of a public roundtable it conducted to obtain additional input.2 During the review, the Commission received information regarding technological developments and related changes in industry standards and practices and consumer perceptions that affected certain provisions of the Guides.

Under Section 5 of the FTC Act,3 an act or practice is deceptive if it involves a material statement or omission that would mislead a consumer acting reasonably under the circumstances.4 Therefore, to prevent deceptive acts and practices pursuant to Section 5, the Commission's guidance should be based on how consumers reasonably interpret claims. The Commission has tried to use available consumer perception evidence whenever possible to develop its guidance. Because marketers have relied on these Guides for decades and have made significant expenditures based on this guidance, the Commission proposes revising existing provisions only when there is a firm record supporting revision. Additionally, the Commission proposes new guidance only when supported by solid evidence of deception to avoid chilling the use of truthful terms that may be useful to consumers.

Based on this framework, the Commission now proposes several amendments to the Guides. Specifically, the Commission proposes revisions in the following areas: (I) Surface application of precious metals; (II) products containing more than one precious metal; (III) alloys with precious metals in amounts below minimum thresholds; (IV) lead-glass-filled stones; (V) varietals; (VI) “cultured” diamonds; (VII) use of the term “gem”; and (VIII) treatments to pearl products.

The Commission proposes three revisions to its guidance on precious metal surface applications. First, based on the comments, to address the deceptive use of precious metal terms for silver and platinum products that are not composed throughout of the advertised metal, the Commission proposes to advise marketers against using silver or platinum terms to describe all, or part of, a coated product unless they adequately qualify the term to indicate the product has only a surface layer of the advertised precious metal.5

Second, based on new durability testing, the Commission proposes to update the safe harbors for surface applications of gold.6 Specifically, this testing shows that the durability marketers intend to convey can be assured only at thicknesses higher than those specified in the current Guides. Additionally, this testing demonstrates that, for electrolytic applications, durability is assured only when marketers use gold or gold alloy of at least 22 karat fineness, rather than the 10 karat fineness currently provided. The Commission seeks evidence about consumer expectations regarding the durability of products with a surface application of precious metals as compared to products composed throughout of precious metals. As discussed in the Statement, the Commission does not propose guidance for new terms to describe surface applications of silver and platinum group metals not addressed in the Guides, nor does it propose guidance for new surface-application terms, such as “clad” and “bonded,” to describe gold and other surface applications. The Commission lacks sufficient evidence on which to base such guidance.

Third, based on consumer perception evidence, the Commission proposes a new section advising marketers to disclose rhodium surface applications on products marked or described as precious metal, such as rhodium plated items marketed as “white gold” or silver.” 7

Consistent with consumer perception evidence, the Commission proposes adding a new section that states it is unfair or deceptive to misrepresent the relative quantity of each precious metal in a product that contains more than one precious metal.8 The proposed guidance advises marketers generally to list precious metals in the order of their relative weight from greatest to least (i.e., leading with the predominant metal). However, it includes examples illustrating that, in some contexts, consumers likely understand that a product contains a greater amount of one metal, even though another metal is listed first (e.g., “14k gold-accented silver”). It also provides examples of marking and descriptions of terms that may be misleading (e.g., use of the term “Platinum + Silver” to describe a product that contains more silver than platinum by weight).

The Commission proposes to revise the Guides to address gold and silver products containing precious metal in amounts below the levels currently specified in the Guides. The current Guides advise marketers to avoid using the terms “gold,” “silver,” or “platinum,” or their abbreviations, to describe or mark a product unless it contains the precious metal in an amount that meets or exceeds the levels specified in Section 23.4 (gold), 23.6 (silver), and 23.7 (platinum group metals). The Commission proposes adding new guidance to the gold and silver sections regarding marketers who have competent and reliable scientific evidence that below-threshold products have materially similar properties (e.g., corrosion- and tarnish-resistance) to at- or above-threshold products. This proposed guidance advises that these marketers may non-deceptively reference these precious metals without additional disclosures other than purity.9 Further, the proposed guidance advises marketers selling below-threshold gold and silver alloys that materially differ from at- or above-threshold products (e.g., 8 karat gold items that tarnish) that they may non-deceptively reference these metals if they disclose that the product may not have the same attributes or properties as jewelry made with the same precious metal at or above the threshold.10 Finally, the notes advise marketers to accurately disclose the purity of the metal.11 These changes should enable marketers to provide truthful information about precious metal content while dispelling the impression that a product will perform as well as one made with that precious metal in amounts at or above the threshold. For reasons described in the Statement, the Commission does not propose a corresponding note for platinum alloys containing less than 500 parts per thousand platinum.

The Commission proposes adding a new note to the section on “Misuse of the words `ruby,' `sapphire,' etc.” 12 Based on consumer perception evidence, this proposed note states it would be unfair or deceptive to describe products filled with a substantial quantity of lead glass: With the unqualified word “ruby” or name of any other precious or semi-precious stone; as a “treated ruby” or other “treated” precious or semi-precious stone; as a “laboratory-grown,” “laboratory-created,” “[manufacturer name]-created,” or “synthetic” ruby or other natural stone; or as a “composite ruby,” “manufactured ruby,” “hybrid ruby,” or other precious or semi-precious stone without qualification. The Commission also proposes some examples of terms marketers could use to describe these products non-deceptively (e.g., use of the term “lead-glass-filled ruby” to describe a product made with ruby that is infused with lead glass).13

The Commission proposes adding a new section that states it is unfair or deceptive to mark or describe a product with an incorrect varietal name.14 Varietal names describe a division of gem species or genus based on color, type of optical phenomenon, or other distinguishing characteristic of appearance (e.g., crystal structure). Based on consumer perception evidence, this proposed section provides two examples of markings or descriptions that may be misleading: (1) Use of the term “yellow emerald” to describe a golden beryl or heliodor, and (2) the use of the term “green amethyst” to describe prasiolite.

Based on consumer perception evidence, the Commission proposes adding a new diamond example that states it is not unfair or deceptive to use the term “cultured” to describe laboratory-created diamonds if the term is immediately accompanied by “laboratory-created,” “laboratory-grown,” “[manufacturer name]-created,” “synthetic,” or by another word or phrase of like meaning.15

Based on comments noting that the guidance on the term “gem” is circular and subjective, the Commission proposes eliminating Section 23.25 (“Misuse of the word `gem' ”). In its place, the Commission proposes adding the term “gem” to Section 23.23 16 (Misuse of the words “ruby,” “sapphire,” “emerald,” “topaz, “stone,” “birthstone,” “gemstone,” etc.). The Commission also proposes eliminating Section 23.20(j) (misuse of the word “gem” as to pearls). As discussed in the Statement, the Commission does not propose further guidance for the term “gem” with regard to pearls.

Based on comments, the Commission proposes a new section addressing disclosures of treatments to pearls and cultured pearls. This section advises marketers to disclose treatments to such products if the treatment: (a) Is not permanent; (b) creates special care requirements or (c) has a significant effect on the product's value.17 The guidance largely tracks the current guidance regarding gemstone treatments.18

For further analysis of comments and the proposed revised guidance, please see the Statement of Basis and Purpose on the FTC's Web site, available at https://www.ftc.gov/public-statements/2015/12/statement-basis-purpose-proposed-revisions-jewelry-guides.

For the reasons set forth in the preamble, and in the Statement of Basis and Purpose on the FTC's Web site, available at https://www.ftc.gov/public-statements/2015/12/statement-basis-purpose-proposed-revisions-jewelry-guides, the Commission proposes to revise 16 CFR part 23, as set forth below:

Subject to certain exceptions and exclusions, persons engaging in specified activities involving commodity interests 3 are required pursuant to the Commodity Exchange Act (“CEA” or “Act”) and/or Commission regulations 4 to register with the Commission in certain registration categories. These include registration as a futures commission merchant (“FCM”), retail foreign exchange dealer (“RFED”), introducing broker (“IB”), commodity pool operator (“CPO”), commodity trading advisor (“CTA”), swap dealer (“SD”), major swap participant (“MSP”), leverage transaction merchant (“LTM”), floor broker (“FB”), and floor trader (“FT”).5 One of the critically important functions of registration is to allow the Commission to ensure that all futures and swaps industry professionals who deal with the public meet minimum standards of fitness and competency.6 The fitness investigations that are part of the registration process permit the Commission and/or its delegatees to (a) uncover past misconduct that may disqualify an individual or entity from registration and (b) help determine if such persons have disclosed all matters required to be disclosed in their applications to become registered with the Commission.7

Pursuant to the registration process for determining a registrant's fitness in part 3 of the Commission's regulations, natural persons 8 that wish to be principals 9 or associated persons 10 of Commission registrants, or who are responsible for entry of orders from an FB's or FT's own account, are required to submit their fingerprints 11 (the “Fingerprinting Requirement”).12

The Commission has delegated to National Futures Association (“NFA”), a registered futures association under Section 17 of the CEA, the registration functions set forth in subparts A, B, and C of part 3 of the Commission's regulations, including the collection and review of a completed Form 8-R 13 and related fingerprint submissions from each natural person completing a Form 8-R.14 NFA, working with law enforcement agencies, uses these fingerprints to conduct background checks on these natural persons to assist in determining their fitness.

In December 2012, the Commission's Division of Swap Dealer and Intermediary Oversight (“DSIO”), in response to concerns raised by industry participants that the Fingerprinting Requirement was unduly burdensome to foreign natural persons and after considering those concerns in light of the continued need to evaluate the fitness of those persons, issued a no-action letter, CFTC Staff Letter No. 12-49.15 CFTC Staff Letter No. 12-49 provides an alternative to complying with the Fingerprinting Requirement for principals of LTMs, FCMs, RFEDs, IBs, CPOs, CTAs, SDs, and MSPs that have not resided in the United States since reaching 18 years of age. Subject to certain conditions specified in the letter, DSIO staff stated that it would not recommend that the Commission commence an enforcement action against any such firm based solely upon that firm's failure to submit with its registration application a fingerprint card for each such principal.

To rely on the relief provided in CFTC Staff Letter No. 12-49, DSIO staff required that any such firm submit, for each principal, either a fingerprint card (as required under Commission regulation 3.10(a)(2)) or a certification, signed by a person with authority to bind such firm, stating that: (1) A reasonable criminal history background check using a reputable commercial service had been conducted; (2) such criminal history background check did not reveal any matters that constitute a disqualification under Sections 8a(2) or 8a(3) of the CEA,16 other than those disclosed; and (3) such firm would maintain, in accordance with Commission regulation 1.31, records documenting that such criminal history background check was performed and the results of such background check.17

After issuing CFTC Staff Letter No. 12-49, DSIO staff issued similar no-action relief from the Fingerprinting Requirement for associated persons of FCMs, RFEDs, IBs, CTAs, CPOs, and LTMs that have not resided in the United States since reaching 18 years of age in CFTC Staff Letter No. 13-29 18 (CFTC Staff Letter No. 13-29, together with CFTC Staff Letter No. 12-49, are the “DSIO No-Action Letters” and the relief provided by such letters is the “DSIO No-Action Relief”).

The Commission is proposing to amend the Fingerprinting Requirement by adding a new sub-section (e) to the existing list of exemptions from the Fingerprinting Requirement in § 3.21 19 to codify and clarify the DSIO No-Action Relief.

This Proposal differs from the DSIO No-Action Relief. First, this Proposal would extend the relief to certain natural persons connected to FBs and FTs. Second, the Proposal would include all requirements to provide a fingerprint card under Part 3 of the Commission's regulations, whereas the DSIO No-Action Relief is more limited.20 As a result, this Proposal broadens the availability of the alternative to fingerprinting provided in the DSIO No-Action Letters; however, the Commission believes that the rationale for providing the alternative to fingerprinting described above is equally applicable to natural persons connected to FBs and FTs and to all other requirements to provide a fingerprint card under Part 3 of the Commission's regulations, as explained further below.

Proposed sub-section (e)(2) of § 3.21 would provide that the obligation to provide a fingerprint card for a Foreign Natural Person under part 3 of the Commission's regulations would be deemed satisfied for a Certifying Firm (each, as defined below) if: (a) Such Certifying Firm causes a criminal history background check of such Foreign Natural Person to be performed; (b) such criminal history background check does not reveal any matters that constitute a disqualification under Sections 8a(2) or 8a(3) of the CEA,21 other than those disclosed to NFA; and (c) a person authorized by such Certifying Firm submits, in reliance on such criminal history background check, a certification by such Certifying Firm to NFA.

The certification must: (i) State that the conditions described above have been satisfied; and (ii) be signed by a person authorized by such Certifying Firm to make such certification. In addition, each criminal history background check must: (a) Be of a type that would reveal all matters listed under Sections 8a(2)(D) or 8a(3)(D), (E), or (H) of the CEA 22 relating to the Foreign Natural Person and (b) be completed not more than one calendar year prior to the date that such Certifying Firm submits the certification to NFA described in the proposed rule.

In terms of definitions, proposed paragraph 3.21(e)(1)(i) would define Foreign Natural Person, solely for purposes of paragraph (e), as any natural person who has not resided in the United States since reaching the age of 18 years. Also, proposed paragraph 3.21(e)(1)(ii) would define Certifying Firm, also solely for purposes of paragraph (e), with respect to natural persons acting in certain specified capacities in relation to the firm.

By way of recordkeeping, proposed paragraph 3.21(e)(3) would require that the Certifying Firm maintain, in accordance with Commission regulation 1.31, records documenting each criminal history background check and the results thereof.

The Commission believes the proposal, in providing certainly to market participants by way of Commission regulation, will make the commodity interest markets it oversees more liquid, competitive, and accessible by enabling Foreign Natural Persons to demonstrate that they meet the minimum standards for fitness and competency without undue burden. The alternative to fingerprinting proposed will remove an impediment to participation in United States' markets by persons located outside of the United States while also ensuring the continued protection of market participants and the public. Further, the Commission believes that, by providing an alternative for persons outside the United States, this Proposal is consistent with the principles of international comity.

As discussed above, in an attempt to provide greater clarity to market participants, this Proposal is slightly different than the DSIO No-Action Letters. In particular, where the No-Action Relief required that “a reasonable criminal history background check using a reputable commercial service” be performed, this Proposal does not include the terms “reasonable” or “reputable.” Instead, this Proposal requires that the background check meet the objective standard described above, which relies on the clearly-stated matters under Sections 8a(2)(D) and 8a(3)(D), (E), and (H) of the CEA. The Commission believes that using such an objective standard (one that does not require a market participant to make a subjective determination of what is “reasonable” or “reputable” for purposes of the alternative) furthers its goal of providing certainty to market participants while allowing the Commission to continue to ensure the fitness of its registrants.

If adopted, the proposed rule would supersede the DSIO No-Action Letters without prejudice to those who are relying on either of the DSIO No-Action Letters and have satisfied the requirements thereof prior to the date hereof.

The Commission requests comment generally on all aspects of this Proposal. In particular, the Commission requests comment on the following:

1. Should the Commission promulgate a final rule in relation to this Proposal to provide an alternative to the Fingerprinting Requirement for Foreign Natural Persons?

2. Please describe the burdens that Foreign Natural Persons face in complying with the Fingerprinting Requirement. How are these burdens different from those faced by natural persons that are not Foreign Natural Persons?

3. Is the criminal history background check as set forth in the Proposal sufficient to reveal the existence of all matters listed under Sections 8a(2)(D) or 8a(3)(D), (E), or (H) of the CEA, if any such matter existed? If not, please provide specific additional or alternative requirements for the criminal history background check.

4. This Proposal is limited to Foreign Natural Persons (i.e., individuals who have not resided in the United States since reaching 18 years of age). Should the Commission use another measure to determine whether an individual should be eligible for the proposed alternative to the Fingerprinting Requirement?

5. This Proposal requires that a background check be completed not more than one calendar year prior to the date of a Certifying Firm's related certification. Should the Commission require that the background check be completed within a different period?

6. Are persons eligible for the DSIO No-Action Relief currently availing themselves of that alternative to the Fingerprinting Requirement? To the extent that such persons are not, please provide reasons as to why they are not.

7. Are there any other matters that the Commission should consider in determining whether to adopt this Proposal?

The Regulatory Flexibility Act (“RFA”) 23 requires Federal agencies, in promulgating regulations, to consider whether the rules they propose will have a significant economic impact on a substantial number of small entities and, if so, to provide a regulatory flexibility analysis regarding the economic impact on those entities. This Proposal would affect certain FCMs, RFEDs, IBs, CPOs, CTAs, SDs, MSPs, LTMs, FBs, and FTs that wish to take advantage of the alternative to fingerprinting to evaluate the fitness of their Foreign Natural Persons for which fingerprints must be submitted to NFA.24 The Commission has previously determined that FCMs, RFEDS, CPOs, SDs, MSPs, and LTMs are not small entities for purposes of the RFA.25 Therefore, the requirements of the RFA do not apply to those entities. With respect to CTAs, FBs, FTs, and IBs, the Commission has found it appropriate to consider whether such registrants should be deemed small entities for purposes of the RFA on a case-by-case basis, in the context of the particular Commission regulation at issue.26 As certain of these registrants may be small entities for purposes of the RFA, the Commission considered whether this rulemaking would have a significant economic impact on such registrants. This Proposal will solely provide an optional alternative to complying with the Fingerprinting Requirement, which already applies to such registrants, and would, therefore, not impose any new regulatory obligations on affected registrants. This Proposal is not expected to impose any new burdens on market participants. Rather, to the extent that this Proposal provides an alternative means to comply with the Fingerprinting Requirement and is elected by a market participant, the Commission believes it is reasonable to infer that the alternative is less burdensome to such participant. The Commission does not, therefore, expect small entities to incur any additional costs as a result of this Proposal. Consequently, the Commission finds that no significant economic impact on small entities will result from this Proposal.

Accordingly, the Chairman, on behalf of the Commission, hereby certifies pursuant to 5 U.S.C. 605(b) that this Proposal will not have a significant economic impact on a substantial number of small entities.

The Paperwork Reduction Act of 1995 (“PRA”) 27 imposes certain requirements on Federal agencies (including the Commission) in connection with conducting or sponsoring any collection of information as defined by the PRA. This Proposal would result in a collection of information within the meaning of the PRA, as discussed below. The Commission therefore is submitting this Proposal to the Office of Management and Budget (“OMB”) for review.

This Proposal contains collections of information for which the Commission has previously received control numbers from OMB. The titles for these collections of information are “Commodity Pool Operators and Commodity Trading Advisors: Amendments to Compliance Obligations, OMB control number 3038-0023” 28 and “Registration of Swap Dealers and Major Swap Participants, OMB control number 3038-0072.” 29

The responses to these collections of information are mandatory. 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 control number issued by OMB.

The collection of information in this Proposal would provide an optional alternative to complying with the Fingerprinting Requirement (as described above). Eligible persons would have the option to elect the certification process, but no obligation to do so. For this reason, except to the extent that the Commission is amending the subject OMB control numbers for PRA purposes to reflect the alternative certification process, this Proposal is not expected to impose any new burdens on market participants. Rather, to the extent that this Proposal provides an alternative means to comply with the Fingerprinting Requirement and is elected by market participants, it is reasonable for the Commission to infer that the alternative is less burdensome to such participants.

Collections 3038-0023 and 3038-0072 are currently in force with their control numbers having been provided by OMB.

As discussed above, this Proposal would add a new exemption that would incorporate an alternative to fingerprinting to evaluate the fitness of certain Foreign Natural Persons. In order to qualify for this alternative, the Certifying Firm must take the steps required pursuant to this Proposal, including submitting the required certification to NFA and maintaining records of the criminal history background check and the results thereof. Requiring such actions would result in revisions to collections 3038-0023 and 3038-0072. Therefore, the Commission proposes to revise each of collections 3038-0023 and 3038-0072.

The Commission understands that NFA has received approximately 110 requests in each of 2014 and 2015 from market participants asking to avail themselves of the DSIO No-Action Relief. However, as discussed above, the relief provided by this Proposal is broader than the DSIO No-Action relief in that it extends the relief to certain natural persons connected to FBs and FTs. Therefore, the Commission estimates that Certifying Firms will submit 200 certifications per year to take advantage of the alternative provided in this Proposal.

As of November 23, 2015, there were (i) 9,259 Commission-registered FCMs, RFEDs, IBs, CPOs, CTAs, LTMs, FBs, and FTs and (ii) 103 Commission-registered SDs and MSPs, making an aggregate total of 9,362 registrants.30 Of these registrants, SDs and MSPs make up approximately 1% and the other registrants make up approximately 99%. Based on the assumption that there is an equal distribution of certifications among the Certifying Firms eligible to provide them, the Commission estimates that approximately 198 31 FCMs, RFEDs, IBs, CPOs, CTAs, LTMs, FBs, and FTs and 2 32 SDs and MSPs will submit the required certification.

Collection 3038-0023 relates to collections of information from FCMs, RFEDs, IBs, CPOs, CTAs, LTMs, FBs, and FTs. Based on the above, the estimated additional hour burden for collection 3038-0023 of 495 hours is calculated as follows:

Number of registrants: 198.

Frequency of collection: As needed.

Estimated annual responses per registrant: 1.

Estimated aggregate number of annual responses: 198.

Estimated annual hour burden per registrant: 2.5.33

Estimated aggregate annual hour burden: 495 (198 registrants × 2.5 hours per registrant).

Collection 3038-0072 relates to collections of information from SDs and MSPs. Based on the above, the estimated additional hour burden for collection 3038-0072 of 5 hours is calculated as follows:

Number of registrants: 2.

Frequency of collection: As needed.

Estimated annual responses per registrant: 1.

Estimated aggregate number of annual responses: 2.

Estimated annual hour burden per registrant: 2.5.34

Estimated aggregate annual hour burden: 5 (2 registrants × 2.5 hours per registrant).

The Commission invites the public and other Federal agencies to comment on any aspect of the proposed information collection requirements discussed above. Pursuant to 44 U.S.C. 3506(c)(2)(B), the Commission solicits comments in order to: (1) Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information will have practical utility; (2) evaluate the accuracy of the Commission's estimate of the burden of the proposed collection of information; (3) determine whether there are ways to enhance the quality, utility, and clarity of the information to be collected; and (4) minimize the burden of the collection of information on those who are to respond, including through the use of automated collection techniques or other forms of information technology.

Comments may be submitted directly to the Office of Information and Regulatory Affairs, by fax at (202) 395-6566, or by email at [email protected]. Please provide the Commission with a copy of submitted comments so that all comments can be summarized and addressed in the final rule preamble. Refer to the ADDRESSES section of this notice of proposed rulemaking for comment submission instructions to the Commission. A copy of the supporting statements for the collection of information discussed above may be obtained by visiting http://RegInfo.gov. OMB is required to make a decision concerning the collection of information between 30 and 60 days after publication of this document in the Federal Register. Therefore, a comment is best assured of having its full effect if OMB receives it within 30 days of publication.

Section 15(a) of the Act 35 requires the Commission to consider the costs and benefits of its actions before issuing a regulation under the Act. Section 15(a) further specifies that the costs and benefits shall be evaluated in light of the following five broad areas of market and public concern: (i) Protection of market participants and the public; (ii) efficiency, competitiveness and financial integrity of futures markets; (iii) price discovery; (iv) sound risk management practices; and (v) other public interest considerations. The Commission considers the costs and benefits resulting from its discretionary determinations with respect to the Section 15(a) considerations.

Because this Proposal will solely provide an optional alternative to complying with the Fingerprinting Requirement, which alternative no FCM, RFED, IB, CPO, CTA, SD, MSP, LTM, FB, FT, associated person, or other Foreign Natural Person is required to elect, the Commission believes that this Proposal will not impose any costs on such persons.

Because the amendment to Commission regulation will allow FCMs, RFEDs, IBs, CPOs, CTAs, SDs, MSPs, LTMs, FBs, and FTs to submit, subject to the terms and conditions herein, a certification in lieu of a fingerprint card for Foreign Natural Persons, NFA will need to develop a process to review and retain such certifications and consider amending its applications and/or other forms to reflect the availability of this exception from the Fingerprinting Requirement. The Commission expects that the costs of such activities will not be significant.

The Commission believes that, by establishing an alternative method for evaluating the fitness of Foreign Natural Persons for whom a fingerprint card must currently be submitted, this Proposal would help keep the United States' commodity interest markets accessible and competitive with other markets around the world by removing an impediment to participation in United States' markets by persons located outside of the United States while also ensuring the continued protection of market participants and the public. Further, the Commission believes that, by providing an alternative for persons outside the United States, this Proposal is consistent with the principles of international comity.

Section 15(a) of the CEA requires the Commission to consider the costs and benefits of its actions before promulgating a regulation under the CEA or issuing certain orders. CEA Section 15(a) further specifies that the costs and benefits shall be evaluated in light of five broad areas of market and public concern: (i) Protection of market participants and the public; (ii) efficiency, competitiveness, and financial integrity of futures markets; (iii) price discovery; (iv) sound risk management practices; and (v) other public interest considerations.

This Proposal will continue to protect the public by ensuring that persons who are currently subject to the Fingerprinting Requirement, whether or not they reside in the United States, must have their fitness reviewed through the completion of a background check.

This Proposal may increase the efficiency and competitiveness of the markets by encouraging more participation in United States markets by persons located outside of the United States. The Commission does not believe that the integrity of financial markets would be harmed, because this proposal requires that the background check meet the objective standards which rely on the clearly-stated matters under Sections 8a(2)(D) and 8a(3)(D), (E), and (H) of the CEA.

The Commission generally believes that providing an alternative means of ensuring the fitness of a person who resides outside the United States for purposes of Commission registration, by reducing the burden that the Fingerprinting Requirement could impose on such persons, could reduce impediments to transact on a cross-border basis.

As explained above, one of the critically important functions of registration is to allow the Commission to ensure that all futures and swaps industry professionals who deal with the public meet minimum standards of fitness and competency.36 The fitness investigations that are part of the registration process permit the Commission and/or its delegatees to (a) uncover past misconduct that may disqualify an individual or entity from registration and (b) help determine if such persons have disclosed all matters required to be disclosed in their applications to become registered with the Commission.37 Having futures and swaps market participants that are not subject to any of the matters that would lead to a disqualification of registration under Sections 8a(2) or (3) of the CEA is one way to help ensure that a Commission registrant will not be a risk to its customers or to the market in general.

The Commission believes that, by providing an alternative for persons outside the United States, this Proposal is consistent with the principles of international comity.

The Commission invites public comment on its cost-benefit considerations, including the Section 15(a) factors described above. Commenters are also invited to submit any data or other information that they may have quantifying or qualifying the costs and benefits of this Proposal with their comment letters.

For the reasons set forth in the preamble, the Commodity Futures Trading Commission proposes to amend part 3 as follows:

The subject of the public hearing is the notice of proposed rulemaking (REG-148998-13) that was published in the Federal Register on Friday, October 23, 2015 (80 FR 64378) relating to the holdings of Obergefell v. Hodges, 575 U.S.___, 135 S. Ct. 2584 (2015), Windsor v. United States, 570 U.S. ___, 133 S. Ct. 2675 (2013), and Revenue Ruling 2013-17 (2013-38 IRB 201), and that define terms in the Internal Revenue Code (Code) describing the marital status of taxpayers. The rules of 26 CFR 601.601(a)(3) apply to the hearing. Persons who wish to present oral comments at the hearing that submitted written comments by January 14, 2016 must submit an outline of the topics to be addressed and the amount of time to be devoted to each topic by Friday, January 15, 2016.

A period of 10 minutes is allotted to each person for presenting oral comments. After the deadline for receiving outlines has passed, the IRS will prepare an agenda containing the schedule of speakers. Copies of the agenda will be made available, free of charge, at the hearing or in the Freedom of Information Reading Room (FOIA RR) (Room 1621) which is located at the 11th and Pennsylvania Avenue NW., entrance, 1111 Constitution Avenue NW., Washington, DC.

Because of access restrictions, the IRS will not admit visitors beyond the immediate entrance area more than 30 minutes before the hearing starts. For information about having your name placed on the building access list to attend the hearing, see the FOR FURTHER INFORMATION CONTACT section of this document.

I. General Information A. Does this action apply to me?

This action is directed to the public in general. This action may, however, be of interest to those persons who are or may manufacture or import biobased chemicals similar to fats and oils described by the SDA nomenclature system. Since other entities may also be interested, the Agency has not attempted to describe all the specific entities that may be affected by this action.

The docket for this TSCA section 21 petition, identified by docket identification (ID) number EPA-HQ-OPPT-2015-0823, is available at http://www.regulations.gov or at the Office of Pollution Prevention and Toxics Docket (OPPT Docket), Environmental Protection Agency Docket Center (EPA/DC), West William Jefferson Clinton Bldg., Rm. 3334, 1301 Constitution Ave. NW., Washington, DC. The Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Public Reading Room is (202) 566-1744, and the telephone number for the OPPT Docket is (202) 566-0280. Please review the visitor instructions and additional information about the docket available at http://www.epa.gov/dockets.

Under TSCA section 21 (15 U.S.C. 2620), any person can petition EPA to initiate a rulemaking proceeding for the issuance, amendment, or repeal of a rule under TSCA section 4, 6, or 8 or an order under TSCA section 5(e) or 6(b)(2). A TSCA section 21 petition must set forth the facts that are claimed to establish the necessity for the action requested. EPA is required to grant or deny the petition within 90 days of its filing. If EPA grants the petition, the Agency must promptly commence an appropriate proceeding. If EPA denies the petition, the Agency must publish its reasons for the denial in the Federal Register. A petitioner may commence a civil action in a U.S. district court to compel initiation of the requested rulemaking proceeding within 60 days of either a denial or the expiration of the 90-day period.

Section 21(b)(1) of TSCA requires that the petition “set forth the facts which it is claimed establish that it is necessary” to issue the rule or order requested, 15 U.S.C. 2620(b)(1). Thus, TSCA section 21 implicitly incorporates the statutory standards that apply to the requested actions. In addition, TSCA section 21 establishes standards a court must use to decide whether to order EPA to initiate rulemaking in the event of a lawsuit filed by the petitioner after denial of a TSCA section 21 petition, 15 U.S.C. 2620(b)(4)(B). Accordingly, EPA has relied on the standards in TSCA section 21 and in the provisions under which actions have been requested to evaluate this TSCA section 21 petition.

On October 7, 2015, EPA received a petition from the Biobased and Renewable Products Advocacy Group (BRAG) requesting the Agency to address the “disproportionate regulatory burden” imposed on companies in the bio-based chemical sector, noting that a “limitation of source categories in the SDA system results in inequitable regulatory treatment for chemical substances that are functionally the same and chemically nearly identical.” Specifically, the petition asks EPA to commence a rulemaking process under TSCA section 8, the objective of which would be to “establish a procedure by which EPA can add new sources of fats and oils to the SDA-eligible list.”

The petition states that the SDA-eligible list is part of a broader “nomenclature system developed by SDA when the TSCA Inventory was initially compiled.” The term “SDA-eligible list” refers to a list found in the 1978 Candidate List of Chemical Substances on the TSCA Inventory, in “Addendum III: Chemical Substances of Unknown or Variable Composition, Complex Reaction Products and Biological Materials” (Ref. 2). In Section I of that document, EPA described a chemical substance naming convention, attributed to the SDA that was available for “identifying and reporting certain multicomponent Class 2 chemical substances derived from natural fats and oils and synthetic long-chain alkyl substitutes.” The identification and reporting in question was the identification and reporting of chemical manufacture and processing to EPA, pursuant to a past reporting obligation under TSCA section 8(a), to inform EPA's original compilation of the TSCA Inventory under TSCA section 8(b). The document listed 35 “natural fats and oils,” as potential alkyl group sources. It provided that the particular chemical substances named under the SDA convention would not be identified “in terms of source.” However, chemical substances with alkyl groups derived from unlisted natural sources were beyond the scope of the naming convention. Thus, each time that a particular chemical substance was identified, reported, and entered into EPA's original compilation of the TSCA Inventory based on the SDA naming convention, the definition of that particular substance inherited a certain characterization from the SDA naming convention: Specifically, that the chemical substance in question was derived either from one or more of the 35 listed natural fats and oils or from synthetic long-chain alkyl substitutes.

The procedure that the petition asks EPA to establish by a TSCA section 8 rule is a procedure for submitting further requests to EPA. Specifically, it would be a regulation governing how the public would submit requests to amend the SDA-eligible list and how EPA would respond to such requests. The procedure would detail how EPA would review a request to include an additional source material of a fat or oil substance, “following a premanufacture notice or other appropriate notification to EPA,” in order to determine if it is “sufficiently similar” to sources of fat or oil substances with the same alkyl range that are already built into the SDA naming convention. After review, if EPA found “such similarity” between the requested additional source material and already-listed source materials, the contemplated rule would direct the Agency to add the requested source material to the SDA-eligible list in the SDA naming convention.

The petition explains that the outcome sought (in the event EPA granted a request under the procedure that petitioners now ask EPA to establish by section 8 rule) would be to authorize manufacturers of various chemical substances derived from the additional source material to “rely on the appropriate SDA alkyl range identity for purposes of Inventory listing and TSCA nomenclature.” The petition elsewhere clarifies what it means by “rely on,” when it notes that without “access to the alkyl range names,” the manufacturers would need to submit premanufacture notifications to EPA. The petition makes clear that the intended effect of enlarging the definitions of existing chemical substance listings in this fashion would be to limit the circumstances in which manufacturers would be deemed to be manufacturing a new chemical substance, and thus be subject to the requirements of TSCA section 5(a)(1)(A).

While the petition includes no specific request to add a particular natural fat or oil to the “SDA-eligible” list, the bulk of the petition is concerned with giving, by way of background, the petitioners' general reasons to believe that such requests would have merit if submitted to EPA. The petition asserts, in general terms, that chemical substances derived from other natural sources “may be chemically indistinguishable from,” are “nearly identical” to, or are “substantially similar,” to chemical substances synthesized from one of the 35 listed natural sources. The petition also asserts that while such substances address “critical needs for sustainability,” there is a “key hindrance” to their commercialization. Specifically, the “key hindrance” is that certain of these chemical substances (or derivatives thereof) would be subject to EPA's pre-manufacture review under section 5 of TSCA, while assertedly similar chemical substances derived from one of the 35 listed natural sources would be existing chemical substances and therefore would not need to undergo such review. The petition claims that continuing to treat chemical substances derived from “these novel sources,” as new chemical substances “creates a disincentive for customers to switch from traditional oils.”

The specific action requested in the petition is that EPA “initiate a rulemaking under TSCA section 8 that would establish a process to amend the list of natural sources of oil and fat [the SDA-eligible list] . . . by considering the chemical equivalency of additional natural sources.” The petition supplies two reasons for the specific action requested. First, that EPA “should allow for new sources to be added,” to the list and second, that issuing such a regulatory proposal would not require a “significant expenditure of time and resources.”

After careful consideration, EPA denied the petitioner's request to initiate a TSCA section 8 rulemaking. EPA denied the request because the petition neither justified the petitioners' claim (that the initiation of a TSCA section 8 rulemaking proceeding is necessary) nor explained how petitioners believe EPA's actual rulemaking authorities under section 8 could be used to accomplish the objectives that petitioners are seeking. To the extent the petition was actually seeking an Agency order under TSCA section 8(b) (e.g., effectuating the alteration of certain entries on the TSCA Inventory), EPA notes that a request for an order under TSCA section 8(b) is not cognizable in a petition that is submitted pursuant to TSCA section 21 (15 U.S.C. 2620(b)(1)). A copy of the Agency's response, which consists of a letter to the petitioner, is available in the docket for this TSCA section 21 petition.

1. Background on TSCA Section 8 Rules. TSCA section 8 provides express rulemaking authority in three distinct subsections: First, TSCA section 8(a) (15 U.S.C. 2607(a)) authorizes EPA to promulgate rules under which current or prospective manufacturers (including importers) and processors of chemical substances must maintain records and submit such information as the EPA Administrator may reasonably require. TSCA section 8(a) also authorizes EPA to promulgate rules under which current or prospective manufacturers and processors of mixtures must maintain records and submit information to the extent the EPA Administrator determines the maintenance of records or submission of reports, or both, is necessary for the effective enforcement of TSCA. Second, TSCA section 8(c) (15 U.S.C. 2607(c)) authorizes EPA to promulgate rules that “determine” certain obligations to “maintain records of significant adverse reactions to health or the environment.” Third, TSCA section 8(d) (15 U.S.C. 2607(d) authorizes rules for the submission to the Administrator of lists and copies of certain health and safety studies. If the Agency denies a petition submitted under TSCA section 21, judicial review in the case of a petition to initiate a proceeding for the issuance of a rule under TSCA section 8 requires the petitioner to show by a “preponderance of the evidence that . . . there is a reasonable basis to conclude that the issuance of such a rule . . . is necessary to protect health or the environment against an unreasonable risk of injury” (15 U.S.C. 2620(b)(4)(B)).

2. Background on the TSCA Inventory. EPA's authority to manage the TSCA Inventory is pursuant to TSCA section 8(b) (15 U.S.C. 2607(b)), which directs the Agency to “compile, keep current, and publish a list of each chemical substance which is manufactured or processed in the United States.” Although EPA was directed to promulgate a data collection rule under TSCA section 8(a), “not later than 180 days after January 1, 1977,” to gather data “[f]or purposes of the compilation of the list . . . under subsection (b),” rules under TSCA section 8(a) do not themselves effectuate changes to the contents of the TSCA Inventory. The initial compilation process under TSCA section 8(b) was completed long ago, with the Agency noting in 1980 that henceforth “premanufacture notification requirements of section 5 will apply to all chemical substances manufactured and imported in bulk or as part of a mixture which has not been reported for the Inventory.” 45 FR 50544 (July 29, 1980). Today, it remains EPA's practice to add entries to the TSCA Inventory on the basis of notices of commencement that are submitted “in accordance with [TSCA] section 5.” See 15 U.S.C. 2607(b) and 40 CFR 720.102. From time to time, EPA has also made corrections to the TSCA Inventory. EPA has consistently done so without rulemaking. See 66 FR 34193, 34197 (June 27, 2001) (making clear that the action in question was a “correction to TSCA Inventory nomenclature,” and “not a rule.”) and 75 FR 8266, 8272 (February 24, 2010) (again, “not a rule”)

The petition asserts that a new regulatory procedure is necessary, to govern public requests for changes to the SDA naming convention and EPA response to those requests. The reason given for why such a procedure is necessary is that the SDA naming convention “should allow for new sources to be added.” Yet the petition supplies no evidence of any current impediment to any party in making requests along these lines, or to EPA in considering such requests, which would be addressed if EPA were to promulgate a regulatory procedure governing the manner and method of making and responding to such requests. Part of the difficulty in following the petition's reasoning stems from the petition's conflation of two distinct issues: (1) Whether a chemical substance derived from an unlisted natural fat or oil can currently be treated as identical to another substance that is derived consistent with the SDA naming convention; and (2) whether alteration of the SDA naming convention, to encompass new sources of fats and oils, is currently “allowed.”

The petition correctly recognizes the current limitations of certain TSCA Inventory listings (i.e., those listings that incorporate particular assumptions about the natural sources of fats or oils from which the listed substance is derived, because they were named according to the SDA naming convention). Manufacturers of a new chemical substance that clearly falls outside the definitional scope of an existing chemical substance are not allowed to determine that the new chemical substance is nonetheless sufficiently “similar” to the existing chemical substance, and simply deem the new chemical substance to be an existing substance on the basis of that similarity. Nor would EPA grant such a request, which would be inconsistent with TSCA section 3(9): A new chemical substance is “any chemical substance which is not included in the chemical substance list compiled and published under [TSCA section 8(b)].”

But the petition presumes, without justification, that until a certain preliminary EPA rulemaking has been completed, those same manufacturers lack a meaningful opportunity to request that EPA enlarge the definitional scope of one or more existing chemical substances named according to the SDA naming convention. The petition's failure to explain that a particular impediment exists (either to manufacturers in making these sorts of requests or to EPA in adjudicating them) is sufficient grounds to deny the request to commence a rulemaking proceeding intended to remove the unspecified impediment.

Thus, the petition does not demonstrate that the requested rule is necessary in any respect, much less that it is necessary to protect health or the environment against an unreasonable risk of injury.

Even if the petition had established that a rulemaking proceeding is necessary, the petition would still be deficient. While the petition states in very general terms that it is seeking a change to the legal status quo (i.e., establish some regulatory process “to allow” certain chemical substances derived from new sources of natural fats and oils to be nonetheless deemed existing chemicals), the petition still fails to explain how a rule under TSCA section 8 could be crafted to accomplish that objective. Rules under 8(c) and 8(d) only cover reporting and retention of certain health and safety related documents; they are inapposite to the stated objective. Nor does the petition suggest any plan to make specific use of EPA's rulemaking authorities under sections 8(c) or 8(d). Rules under section 8(a) are somewhat broader in potential scope, but once again, the rulemaking authority at issue here is inapposite; it is to require current or prospective manufacturers or processors of a chemical substance to supply existing information relating to that chemical substance. While, historically, information collected using a TSCA section 8(a) rule provided the factual basis for EPA's assembly of the TSCA Inventory, TSCA section 8(a) does not itself govern or authorize EPA's management of the TSCA Inventory. That is instead authorized under TSCA section 8(b). Yet TSCA section 8(b) does not contain an express grant of rulemaking authority, and EPA has never used rulemaking to establish or make additions or changes to the Inventory. For its part, the petition merely makes a blanket assertion that “EPA is authorized under TSCA section 8 to commence a rulemaking.” Especially since the text of TSCA section 8(b) does not itself refer to rulemaking authority, and the petitioners are seeking a change in legal requirements to “allow for new sources to be added,” the absence of any particular explanation in the petition describing how petitioners believe EPA could issue an appropriate rule (under any subsection of TSCA section 8) is a critical deficiency of the petition. Finally, to the extent that petitioners are actually seeking an order under TSCA section 8(b), EPA notes that such petitions are not cognizable under TSCA section 8, 15 U.S.C. 2620(b)(1).

The following is a listing of the documents that are specifically referenced in this document. The docket includes these documents and other information considered by EPA, including documents that are referenced within the documents that are included in the docket, even if the referenced document is not physically located in the docket. For assistance in locating these other documents, please consult the technical person listed under FOR FURTHER INFORMATION CONTACT.

On September 21, 2015, we received a petition from Defenders of Wildlife requesting that we list the oceanic whitetip shark (Carcharhinus longimanus) as endangered or threatened under the ESA, or, in the alternative, to list one or more distinct population segments (DPSs), should we find they exist, as threatened or endangered under the ESA. Defenders of Wildlife also requested that critical habitat be designated for this species in U.S. waters concurrent with final ESA listing. The petition states that the oceanic whitetip shark merits listing as an endangered or threatened species under the ESA because of the following: (1) The species faces impacts from various chemical pollutants within its habitat; (2) the species faces threats from historical and continued fishing for commercial purposes; (3) diseases, such as highly pathogenic bacteria, may be impacting the species in conjunction with pollutants; (4) regulations are inadequate to protect the oceanic whitetip shark; (5) life history characteristics and limited ability to recover from fishing pressure make the species particularly vulnerable to overexploitation.

Section 4(b)(3)(A) of the ESA of 1973, as amended (16 U.S.C. 1531 et seq.), requires, to the maximum extent practicable, that within 90 days of receipt of a petition to list a species as threatened or endangered, the Secretary of Commerce make a finding on whether that petition presents substantial scientific or commercial information indicating that the petitioned action may be warranted, and promptly publish the finding in the Federal Register (16 U.S.C. 1533(b)(3)(A)). When we find that substantial scientific or commercial information in a petition and in our files indicates the petitioned action may be warranted (a “positive 90-day finding”), we are required to promptly commence a review of the status of the species concerned, which includes conducting a comprehensive review of the best available scientific and commercial information. Within 12 months of receiving the petition, we must conclude the review with a finding as to whether, in fact, the petitioned action is warranted. Because the finding at the 12-month stage is based on a significantly more thorough review of the available information, a “may be warranted” finding at the 90-day stage does not prejudge the outcome of the status review.

Under the ESA, a listing determination may address a “species,” which is defined to also include subspecies and, for any vertebrate species, any DPS that interbreeds when mature (16 U.S.C. 1532(16)). A joint NMFS-U.S. Fish and Wildlife Service (USFWS) policy clarifies the agencies' interpretation of the phrase “distinct population segment” for the purposes of listing, delisting, and reclassifying a species under the ESA (“DPS Policy”; 61 FR 4722; February 7, 1996). A species, subspecies, or DPS is “endangered” if it is in danger of extinction throughout all or a significant portion of its range, and “threatened” if it is likely to become endangered within the foreseeable future throughout all or a significant portion of its range (ESA sections 3(6) and 3(20), respectively; 16 U.S.C. 1532(6) and (20)). Pursuant to the ESA and our implementing regulations, the determination of whether a species is threatened or endangered shall be based on any one or a combination of the following five section 4(a)(1) factors: The present or threatened destruction, modification, or curtailment of habitat or range; overutilization for commercial, recreational, scientific, or educational purposes; disease or predation; inadequacy of existing regulatory mechanisms; and any other natural or manmade factors affecting the species' existence (16 U.S.C. 1533(a)(1), 50 CFR 424.11(c)).

ESA-implementing regulations issued jointly by NMFS and USFWS (50 CFR 424.14(b)) define “substantial information” in the context of reviewing a petition to list, delist, or reclassify a species as the amount of information that would lead a reasonable person to believe that the measure proposed in the petition may be warranted. When evaluating whether substantial information is contained in a petition, we must consider whether the petition: (1) Clearly indicates the administrative measure recommended and gives the scientific and any common name of the species involved; (2) contains detailed narrative justification for the recommended measure, describing, based on available information, past and present numbers and distribution of the species involved and any threats faced by the species; (3) provides information regarding the status of the species over all or a significant portion of its range; and (4) is accompanied by the appropriate supporting documentation in the form of bibliographic references, reprints of pertinent publications, copies of reports or letters from authorities, and maps (50 CFR 424.14(b)(2)).

At the 90-day stage, we evaluate the petitioner's request based upon the information in the petition including its references, and the information readily available in our files. We do not conduct additional research, and we do not solicit information from parties outside the agency to help us in evaluating the petition. We will accept the petitioner's sources and characterizations of the information presented, if they appear to be based on accepted scientific principles, unless we have specific information in our files that indicates the petition's information is incorrect, unreliable, obsolete, or otherwise irrelevant to the requested action. Information that is susceptible to more than one interpretation or that is contradicted by other available information will not be dismissed at the 90-day finding stage, so long as it is reliable and a reasonable person would conclude that it supports the petitioner's assertions. Conclusive information indicating the species may meet the ESA's requirements for listing is not required to make a positive 90-day finding. We will not conclude that a lack of specific information alone negates a positive 90-day finding, if a reasonable person would conclude that the unknown information itself suggests an extinction risk of concern for the species at issue.

To make a 90-day finding on a petition to list a species, we evaluate whether the petition presents substantial scientific or commercial information indicating the subject species may be either threatened or endangered, as defined by the ESA. First, we evaluate whether the information presented in the petition, along with the information readily available in our files, indicates that the petitioned entity constitutes a “species” eligible for listing under the ESA. Next, we evaluate whether the information indicates that the species at issue faces extinction risk that is cause for concern; this may be indicated in information expressly discussing the species' status and trends, or in information describing impacts and threats to the species. We evaluate any information on specific demographic factors pertinent to evaluating extinction risk for the species at issue (e.g., population abundance and trends, productivity, spatial structure, age structure, sex ratio, diversity, current and historical range, habitat integrity or fragmentation), and the potential contribution of identified demographic risks to extinction risk for the species. We then evaluate the potential links between these demographic risks and the causative impacts and threats identified in ESA section 4(a)(1).

Information presented on impacts or threats should be specific to the species and should reasonably suggest that one or more of these factors may be operative threats that act or have acted on the species to the point that it may warrant protection under the ESA. Broad statements about generalized threats to the species, or identification of factors that could negatively impact a species, do not constitute substantial information that listing may be warranted. We look for information indicating that not only is the particular species exposed to a factor, but that the species may be responding in a negative fashion; then we assess the potential significance of that negative response.

Many petitions identify risk classifications made by non-governmental organizations, such as the International Union for the Conservation of Nature (IUCN), the American Fisheries Society, or NatureServe, as evidence of extinction risk for a species. Risk classifications by other organizations or made under other Federal or state statutes may be informative, but such classification alone may not provide the rationale for a positive 90-day finding under the ESA. For example, as explained by NatureServe, their assessments of a species' conservation status do “not constitute a recommendation by NatureServe for listing under the U.S. Endangered Species Act” because NatureServe assessments “have different criteria, evidence requirements, purposes and taxonomic coverage than government lists of endangered and threatened species, and therefore these two types of lists should not be expected to coincide” (http://www.natureserve.org/prodServices/statusAssessment.jsp). Thus, when a petition cites such classifications, we will evaluate the source of information that the classification is based upon in light of the standards on extinction risk and impacts or threats discussed above.

The oceanic whitetip shark (Carcharhinus longimanus) is a large, highly migratory oceanic species of shark, and is one of the most widespread species of shark found throughout the world in epipelagic tropical and subtropical waters between 30 °N. and 35 °S. latitude. In the Western Atlantic, oceanic whitetips occur from Maine to Argentina, including the Caribbean and Gulf of Mexico. In the Central and Eastern Atlantic, the species occurs from Madeira, Portugal south to the Gulf of Guinea, and possibly in the Mediterranean Sea. In the Western Indian Ocean, the species can be found in waters of South Africa, Madagascar, Mozambique, Mauritius and Seychelles, and the Red Sea, and India. Oceanic whitetips are also found throughout the Western and Central Pacific, including China (including Taiwan Island), the Philippines, New Caledonia, Australia (southern Australian coast), Hawaiian Islands south to Samoa Islands, Tahiti and Tuamotu Archipelago and west to Galapagos Islands. Finally, in the Eastern Pacific, the species can be found from southern California to Peru, including the Gulf of California and Clipperton Island (Compagno, 1984).

The oceanic whitetip shark has a stocky build with a large rounded first dorsal fin and very long and wide paddle-like pectoral fins (Compagno, 1984). The head has a short and bluntly rounded nose and small circular eyes with nictitating membranes. The upper jaw contains broad, triangular serrated teeth, while the teeth in the lower jaw are more pointed and are only serrated near the tip (Compagno, 1984). The first dorsal fin is very wide with a rounded tip, originating just in front of the rear tips of the pectoral fins. The second dorsal fin originates over or slightly in front of the base of the anal fin. The body is grayish bronze to brown in color, but varies depending upon geographic location. The underside is whitish with a yellow tinge on some individuals (Compagno, 1984). The species also exhibits a color pattern of mottled white tips on its front dorsal, caudal, and pectoral fins with black tips on its anal fin and on the ventral surfaces of its pelvic fins. They usually cruise slowly at or near the surface with their huge pectoral fins conspicuously outspread, but can suddenly dash for a short distance when disturbed (Compagno, 1984).

The oceanic whitetip shark is found in a diverse spectrum of locations: It is a surface-dwelling and predominantly oceanic-epipelagic shark, but occasionally coastal, tropical and warm temperate shark, usually found far offshore in the open sea. It has a clear preference for open ocean waters and its abundance increases away from continental and insular shelves (Backus et al., 1956; Strasburg, 1958; Compagno, 1984). This species sometimes occurs in inshore waters as shallow as 37 m, particularly off oceanic islands or in continental areas where the shelf is very narrow, but is generally found in water with the bottom below 184 m, from the surface to at least 152 m deep. It is thought to primarily occupy the upper layer of the water column, tolerating temperatures from 18-28° C but preferring > 20° C. Although one was caught in water of 15° C, the species tends to withdraw from waters that are cooling below this temperature (e.g., the Gulf of Mexico in winter (Compagno, 1984)).

Oceanic whitetip sharks are high trophic level predators in open ocean ecosystems feeding mainly on teleosts and cephalopods (Backus, 1954; Bonfil et al., 2008), but studies have also reported that they prey on sea birds, marine mammals, other sharks and rays, molluscs and crustaceans, and even garbage (Compagno, 1984; Cortés, 1999). Based on the species' diet, the oceanic whitetip has a high trophic level, with a score of of 4.2 out of a maximum 5.0 (Cortés, 1999)

The oceanic whitetip has an estimated maximum age of 17 years, although only a maximum age of 13 years has been confirmed (Lessa et al., 1999). In general, this species is said to attain a maximum size of 395.0 cm (Compagno, 1984), with theoretical maximum sizes ranging from 325 to 342 cm total length (TL) (Lessa et al., 1999; Seki et al., 1998, respectively); however, the most common sizes are below 300.0 cm (Compagno, 1984). Age of maturity is slightly different depending on location: In the southwestern Atlantic, age and size of maturity in oceanic whitetips was estimated to be 6-7 years and 180-190 cm TL, respectively, for both sexes (Lessa et al., 1999). In the North Pacific, females become mature at about 168-196 cm TL, and males at 175-189 cm TL, which corresponds to an age of 4 and 5 years, respectively (Seki et al., 1998). In the Indian Ocean, both males and females mature at around 190-200 cm TL (IOTC, 2014). Similar to other carcharhinid species, the oceanic whitetip shark is viviparous with placental embryonic development. The reproductive cycle is thought to be biennial, giving birth on alternate years, after a 10-12 month gestation period. The number of pups in a litter ranges from 1 to 14, with an average of 6, and there is a potential positive correlation between female size and number of pups per litter (Bonfil et al., 2008; Compagno, 1984). Size at birth varies slightly between geographic locations, ranging from 55 to 75 cm TL in the North Pacific, around 65-75 cm TL in the northwestern Atlantic, and 60-65 cm TL off South Africa, with reproductive seasons thought to occur from late spring to summer (Bonfil et al., 2008; Compagno, 1984).

Below we evaluate the information provided in the petition and readily available in our files to determine if the petition presents substantial scientific or commercial information indicating that an endangered or threatened listing may be warranted as a result of any of the factors listed under section 4(a)(1) of the ESA. If requested to list a global population or, alternatively, a DPS, we first determine if the petition presents substantial information that the petitioned action is warranted for the global population. If it does, then we make a positive finding on the petition and conduct a review of the species range-wide. If after this review we find that the species does not warrant listing range-wide, then we will consider whether the populations requested by the petition qualify as DPSs and warrant listing. If the petition does not present substantial information that the global population may warrant listing, but it has requested that we list any distinct populations of the species as threatened or endangered, then we consider whether the petition provides substantial information that the requested population(s) may qualify as DPSs under the discreteness and significance criteria of our joint DPS Policy, and if listing any of those DPSs may be warranted. We summarize our analysis and conclusions regarding the information presented by the petitioners and in our files on the specific ESA section 4(a)(1) factors that we find may be affecting the species' risk of global extinction below.

The petition does not provide a global population abundance estimate for oceanic whitetip sharks, but states that the species was formerly one of the most common sharks in the ocean and has undergone serious declines throughout its global range. The petition asserts that a global decline of oceanic whitetip sharks has been caused mainly by commercial fishing (both direct harvest and bycatch) driven by demands of the shark fin trade. In the Northwest and Central Atlantic, the petition cites population declines of up to 70 percent since the early 1990s, and even more significant historical declines of up to 99 percent in the Gulf of Mexico since the 1950s. In the Southwest and equatorial Atlantic, the petition points to various but limited pieces of information indicating potential population declines and high fishing pressure in this region. In the Western and Central Pacific, the petition provides numerous lines of evidence, including a recent stock assessment report as well as other standardized catch per unit effort (CPUE) data, that oceanic whitetips have suffered significant population declines (> 90 percent in some areas) as well as declines in size and biomass in both the greater Western and Central Pacific as well as Hawaii. In the Eastern Pacific, the petition cites limited information based on nominal CPUE data that indicates an estimated 95 percent decline in bycatch rates of oceanic whitetips in purse seine fisheries. Finally, in the Indian Ocean, the petition notes that while trend information is limited for this region, a limited number of studies as well as some anecdotal information indicate that oceanic whitetip populations may be declining.

The last IUCN assessment of the oceanic whitetip shark was completed in 2006 and several estimates of global and subpopulation trends and status have been made and are described in the following text. In the Northwest Atlantic, declines in relative abundance cited by the petitioner were derived from standardized catch-rate indices estimated from self-reported fisheries logbook data by pelagic commercial longline fishers in Baum et al. (2003) and Cortés et al. (2007). The logbook data indicated declines of 70 percent from 1992 to 2000 (Baum et al., 2003) and 57 percent from 1992 to 2005 (Cortés et al., 2007). However, standardized catch-rate analysis of data collected by on-board scientific observers that sample the same pelagic longline fishery resulted in a less pronounced decline than the logbook series (9 percent vs. 57 percent) while the nominal observer series showed a 36 percent decline (Cortés et al., 2007). It should be noted that the sample size for oceanic whitetips in the observer analysis was substantially lower than for the other species, and changes in hook depth, which are particularly important in catching oceanic whitetips, were not considered. Thus, these trends should be regarded with caution. Overall, despite the 57 percent decline from the standardized logbook data from 1992-2005, Cortes et al. (2007) reports that the latter portion of the time series shows a stable and possibly increasing trend for oceanic whitetips from 2000-2005. In contrast to the 9 percent decline found in the analysis of observer data in Cortes et al. (2007), a more recent analysis using observer data between 1996 and 2005 provides additional evidence that the abundance of oceanic whitetips has declined over this time period. The estimated rate of change in oceanic whitetips equated to a 50 percent decline (95 percent CI: 17-70 percent) between1992 and 2005 (Baum and Blanchard, 2010); however, the authors noted that although model estimates suggest significant declines in oceanic whitetip sharks between 1992 and 2005, the high degree of interannual variability in the individual year estimates suggests that the catch rates have not been fully standardized (i.e., covariates that significantly influence catch rates of these species were not included in the models) and limits what can reasonably be inferred about the relative abundance of the species.

In the Gulf of Mexico, the petition cited Baum and Myers (2004), which compared longline CPUE from research surveys from 1954-1957 to observed commercial longline sets from 1995-1999, and determined that the oceanic whitetip had declined by more than 150-fold, or 99.3 percent (95 percent CI: 98.3-99.8 percent) in the Gulf during that time. However, the methods and results of Baum et al. (2003) and Baum and Myers (2004) were critiqued by Burgess et al. (2005), who agreed that abundance of large pelagic sharks had declined but presented arguments that the population declines were probably less severe than indicated by these. Of particular relevance to oceanic whitetip, Burgess et al. (2005) noted that the change from steel to monofilament leaders between the 1950s and 1990s could have reduced the catchability of all large sharks, and the increase in the average depth of sets during the same period could have reduced the catchability of the surface-dwelling oceanic whitetip (FAO 2012). After a re-analysis of the same data and correcting for the aforementioned factors, declines of oceanic whitetip in the Gulf of Mexico were estimated to be 88 percent rather than 99 percent (Driggers et al., 2011).

Thus, abundance trend estimates derived from standardized catch rate indices of the U.S. pelagic longline fishery suggest that oceanic whitetips have likely undergone a decline in abundance in this region. However, the conflicting evidence regarding the magnitude of decline between the fisheries logbook data and observer data cannot be fully resolved at this time. While the logbook dataset is the largest available for the western North Atlantic Ocean, the observer dataset is generally more reliable in terms of consistent identification and reporting, particularly of bycatch species. Data are not available in the petition or in our own files to assess the trend in population abundance in this region since 2006. However, because the logbook data from this region show consistent evidence of a significant and continued decline in oceanic whitetip sharks, we must consider this information in our 90-day determination.

The petition cites several lines of evidence indicating that oceanic whitetips in the Western and Central Pacific have suffered significant population declines throughout the region, including declining trends in standardized CPUE data as well as biomass and size indices. The most reliable evidence likely comes from the first and only stock assessment of oceanic whitetip, in which standardized CPUE series were estimated in the Western and Central Pacific based on observer data held by the Secretariat of the Pacific Community (SPC) and collected over the years from 1995-2009. Based on the data in the oceanic whitetip stock assessment, the median estimate of oceanic whitetip biomass in the Western Central Pacific in 2010 was 7,295 tons, which would be equivalent to a population of roughly 200,000 individuals. This stock assessment report (Rice and Harley, 2012) concluded that the catch, CPUE, and size composition data for oceanic whitetip all show consistent declines from 1995-2009. In addition to the stock assessment report, another study analyzing catch rates from observer data confirmed significant population declines for the oceanic whitetip. Standardized CPUE of longline fleets in the Western and Central Pacific declined significantly for oceanic whitetip sharks in tropical waters by 17 percent per year (CI: 14 percent to 20 percent) from 1996 to 2009, which equates to a total decline in annual values of 90 percent, with low uncertainty in the estimates (Clarke et al., 2012). This study also found a decrease in size of female oceanic whitetips in their core tropical habitat, and that all individuals sampled from purse-seine fisheries since 2000 have been immature. More recently, Rice et al. (2015) confirmed that population declines of oceanic whitetips have continued since the stock assessment report was completed in 2009. Specifically, the standardized oceanic whitetip shark trend decreases steadily over 1995-2014, with a large decrease from 2013-2014 in the standardized CPUE, indicating continuing population declines in this region. In fact, the study concluded that if the population of oceanic whitetip shark doubled since the stock assessment, it would still be overfished (Rice et al., 2015).

Separate analyses have also been conducted for Hawaiian pelagic longline fisheries that found similar declines. Brodziak and Walsh (2013) showed a highly significant decreasing trend in standardized CPUE of oceanic whitetip from 1995 to 2010, resulting in a decline in relative abundance on the order of 90 percent. These results were similar to earlier results from Clarke and Walsh (2011) that also found oceanic whitetip CPUE decreased by greater than 90 percent since 1995 in the Hawaii-based pelagic longline fishery. These results suggest that declines of oceanic whitetip populations are not just regional, but rather a Pacific-wide phenomenon.

The petition acknowledged that in the Eastern Pacific, assessments of oceanic whitetip declines are less prevalent, but provided some information that oceanic whitetips have suffered significant population declines as a result of purse-seine fisheries in this region. According to the Inter-American Tropical Tuna Commission (IATTC), unstandardized nominal catch-rate data for the oceanic whitetip shark from purse-seine sets on floating objects, unassociated sets and dolphin sets all show decreasing trends since 1994 (IATTC, 2007). On floating object sets in particular, nominal incidental catch of oceanic whitetip declined by approximately 95 percent (FAO, 2012).

Likewise, in other areas of the world, estimates of oceanic whitetip abundance are limited. In the Indian Ocean, the status and abundance of shark species is poorly known despite a long history of research and more than 60 years of commercial exploitation by large-scale tuna fisheries (Romanov et al., 2010). Available standardized CPUE indices from Japanese and Spanish longline fisheries are limited and indicate conflicting trends, although both datasets indicate overall population declines ranging from 25-40 percent. Presently, there is no quantitative stock assessment and only limited basic fishery indicators are currently available for oceanic whitetip sharks in the Indian Ocean; therefore, the stock status is uncertain. However, in addition to the limited data available indicating some level of population decline, anecdotal information suggests that oceanic whitetip shark abundance has declined over recent decades and the species has become rare throughout much of the Indian Ocean basin over the last 20 years (IOTC, 2014). With such high pelagic fishing effort in this region, and no indication that fishing pressure will cease in the foreseeable future, the species may continue to experience declines in this portion of its range.

In conclusion, across the species' global range we find evidence suggesting that population abundance of the oceanic whitetip shark is declining or, in the Northwest Atlantic Ocean, potentially stabilized. While data are still limited with respect to population size and trends, we find the petition and our files sufficient in presenting substantial information on oceanic whitetip shark abundance, trends, or status to indicate the petitioned action may be warranted.

The petition indicated that oceanic whitetip sharks merit listing due to all five ESA section 4(a)(1) factors: Present or threatened destruction, modification, or curtailment of its habitat or range; overutilization for commercial, recreational, scientific, or educational purposes; disease or predation; inadequacy of existing regulatory mechanisms; and other natural or manmade factors affecting its continued existence. We discuss each of these below based on information in the petition, and the information readily available in our files.

The petition contends that oceanic whitetip sharks are at risk of extinction throughout their range due to pollutants, especially those that are able to bioaccumulate and biomagnify to high concentrations as a result of the species' high trophic position, long life, and large size. Of particular concern to the petitioners are high polychlorinated biphenyl (PCB) and mercury concentrations in oceanic whitetip shark tissues, which can cause a variety of negative physiological impacts. A study cited by the petition that analyzed the pollutant composition of an amalgamated liver oil sample taken from three shark species (including oceanic whitetip, silky (Carcharhinus falciformis), and nurse (Ginglymostoma cirratum) sharks) looked at dioxins and dioxin-like PCBs in the sample (Cruz-Nuñez et al., 2009). The petition states that the study found very high levels of both of these pollutants in the tested liver oil, and, in comparison to levels found in smooth hammerhead sharks (Storelli et al., 2003), these levels would likely exceed threshold levels of PCBs for some cell- and molecular-level effects seen in aquatic vertebrates. However, the former study (Cruz-Nuñez et al., 2009) was based on an amalgamated liver oil sample taken from an unknown composition of three different shark species, the results of which cannot be solely attributed to the oceanic whitetip. Additionally, of the 33 species for which published data are available, only two have been shown to exhibit PCB concentrations above the threshold for organism-level effects in fish and aquatic mammals (e.g., growth and reproduction, which are impaired at PCB concentrations >50 μg/g;): The Greenland shark (Somniosus microcephalus) and bull shark (Carcharhinus leucas) (Gelsleichter and Walker, 2010). The petition also states that high concentrations of mercury found in oceanic whitetip sharks can interact with the presence of any PCBs and exacerbate mercury neurotoxicity; however, the petition did not provide any evidence that such impacts are presently affecting oceanic whitetip populations.

Generally, we look for information in the petition and in our files to indicate that not only is the particular species exposed to a factor, but that the species may be responding in a negative fashion. Despite providing evidence that oceanic whitetip sharks accumulate pollutants in their tissues, the petitioners fail to provide evidence that these concentrations of PCBs and mercury are causing detrimental physiological effects to the species or may be contributing significantly to population declines in oceanic whitetip sharks to the point where the species may be at risk of extinction. In addition, we did not find any information in our files to suggest that pollutants are negatively impacting oceanic whitetip shark populations, such that it poses an extinction risk to the species. As such, we conclude that the information presented in the petition, and in our own files, on threats to the habitat of the oceanic whitetip shark does not provide substantial information indicating that listing may be warranted for the species.

The petition states that the threat of overutilization, as a result of historical and continued catch of the species in both targeted fisheries and, more importantly, incidentally as bycatch, is the primary driver of population declines observed for oceanic whitetip sharks. More specifically, the petition states that because oceanic whitetip fins are highly valued in the international fin market, with values of $45-85 per kilogram and categorized as “first choice” in Hong Kong, overutilization driven by the shark fin trade has resulted in population declines of oceanic whitetip. In fact, demand from the international fin market is considered to be the primary force driving retention of bycatch of this species, as the meat is considered to be of low commercial value (Mundy-Taylor and Crooke, 2013). Evidence suggests that the oceanic whitetip shark may account for approximately 2.8 percent [CI: 1.6-2.1 percent] of the fins auctioned in Hong Kong, one of the world's largest fin-trading centers (Clarke, 2006). This translates to approximately 200,000 to 1.3 million oceanic whitetips that may enter the global fin trade each year (Clarke, 2006). Given the ease of morphological identification of oceanic whitetip fins by traders, the best estimate of oceanic whitetip sharks' contribution to the trade is likely more accurate than that for other species because these fins are less likely to be inadvertently sorted into other categories. We found additional evidence in our files that oceanic whitetips are highly utilized in the shark fin trade. In a genetic barcoding study of shark fins from markets in Taiwan, oceanic whitetips were one of 20 species identified and comprised 0.38 percent of collected fin samples. Additionally, oceanic whitetips comprised 1.72 percent of fins genetically tested from markets throughout Indonesia (the largest shark catching country in the world). In another genetic barcoding study of fins from United Arab Emirates, the fourth largest exporter in the world of raw dried shark fins to Hong Kong, the authors found that the oceanic whitetip represented 0.45 percent of the trade from Dubai (Jabado et al., 2015). Overall, the fact that oceanic whitetips are highly valued and preferentially retained for their fins, are possibly targeted in some areas, and comprise a portion of the Hong Kong fin-trading auction suggests that overutilization via the fin trade may be a threat contributing to the extinction risk of the species.

In addition to the many oceanic whitetips that are retained as bycatch in fisheries throughout its range, the petition contends that many oceanic whitetips incidentally caught as bycatch will die even when they are not retained as a result of post-capture mortality (i.e., mortality that occurs once the species is hooked and hauled in) and post-release mortality (i.e., mortality that occurs after the species is released). Based on the available information in the petition and in our files, we found that oceanic whitetips have relatively high survivorship in comparison to other pelagic shark species when caught on longline gear. For example, in Portuguese longline fisheries targeting swordfish in the Atlantic Ocean, 66 percent of oceanic whitetips were alive at haul-back in comparison to smooth hammerhead or silky sharks, of which only 29 percent and 44 percent, respectively, were alive at haul-back (Coelho et al., 2012). In addition, a large proportion of the oceanic whitetip sharks taken as bycatch in the U.S. Atlantic pelagic longline fishery are alive when brought to the vessel (>75 percent; (Beerkircher et al., 2002) and between 65-88 percent are still alive at haul-back in the Fijian longline fishery (Gilman et al., 2008). However, we do agree with the petition that these numbers do not account for post-release mortality, and although oceanic whitetips have higher survivorship than some other pelagic shark species, these sources of mortality must also be taken into consideration.

In the Northwest and Central Atlantic and Gulf of Mexico, the oceanic whitetip was once described as the most common pelagic shark throughout the warm-temperate and tropical waters of the Atlantic and beyond the continental shelf in the Gulf of Mexico. Historically, oceanic whitetips were caught as bycatch in pelagic longline fisheries targeting tuna and swordfish in this region, with an estimated 8,526 individuals recorded as captured in these fisheries logbooks from 1992 to 2000 (Baum et al., 2003). The petition contends that due to continued exploitation, beginning in the 1950s and 1960s, combined with the species' vulnerability to pelagic longline fisheries, oceanic whitetips have undergone significant population declines in this region. As previously described, estimates of decline vary, and range from up to 70 percent in the Northwest Atlantic and up to 88 percent in the Gulf of Mexico. In order to implement the International Commission for the Conservation of Atlantic Tuna (ICCAT) recommendation 10-07 for the conservation of oceanic whitetip sharks, the species has been prohibited in U.S. Atlantic pelagic longline fisheries since 2011. However, it should be noted that oceanic whitetip sharks are still caught as bycatch in this region despite its prohibited status (NMFS, 2012; 2014), although bycatch numbers have decreased. Since the prohibition was implemented in 2011, estimated commercial landings of oceanic whitetip declined from 1.1 mt in 2011 to only 0.03 mt in 2013 (NMFS 2012; 2014 SAFE Reports). In 2013, NMFS reported a total of 33 oceanic whitetip prohibited interactions, with 88 percent released alive. In addition to population declines, the petition cites information suggesting that oceanic whitetip sharks have experienced decreasing sizes in this region, indicating unsustainable catch. In comparison to surveys conducted in the 1950s, mean weight of oceanic whitetip sharks in the 1990s showed a decline of 35 percent in the Gulf of Mexico (Baum and Myers, 2004). Further, off the Southeastern United States, most of the observed catches of oceanic whitetip from 1992-2000 were below the species' size of maturity. In addition to the recorded commercial utilization of the species, the petition also notes that illegal, unreported and unregulated (IUU) fishing is problematic, particularly in the Gulf of Mexico, where the petition states that Mexican fishermen are illegally catching an estimated 3 to 56 percent of the total U.S. commercial shark quota, and between 6 and 108 percent of the Gulf of Mexico regional commercial quota, which further contributes to overutilization of the species. However, the quotas the petition refers to are actually for large coastal sharks rather than pelagic sharks, and most of the species caught are not oceanic whitetips. Overall, evidence suggests that oceanic whitetip sharks have suffered significant population declines in the Northwest Atlantic and Gulf of Mexico, likely as a result of fishing pressure. Although the magnitude of population declines remains uncertain, we find substantial evidence to suggest that overutilization may be a threat to the species in this region that warrants further exploration to determine whether it contributes significantly to the species' extinction risk.

In the Southwest and equatorial Atlantic, the oceanic whitetip is commonly caught in both longline and purse-seine fisheries. The petition notes that data concerning oceanic whitetip population trends are less abundant in this region, but claims there is significant evidence of decline where the species was formerly abundant. In this region, oceanic whitetips were historically reported as the second-most abundant shark, outnumbered only by blue shark, in research surveys between 1992 and 1997 (FAO 2012). However, more recent observer data from the Uruguayan longline fleet operating in this region reported low CPUE values for oceanic whitetip from 2003 to 2006, with the highest CPUE recorded not exceeding 0.491 individuals/1,000 hooks. In total, only 63 oceanic whitetips were caught on 2,279,169 hooks and most were juveniles (Domingo et al., 2007). Though these data do not indicate whether a decline in the oceanic whitetip population occurred, they clearly show that this species is currently not abundant in this area. Additionally, total landings of oceanic whitetip in the Brazilian tuna longline fishery have shown a continuous decline, decreasing from about 640t in 2000 to 80t in 2005. However, like the previous study, CPUE data are not available for the species; thus, it is impossible to evaluate if such a decline resulted from a lower abundance or from changes in catchability, related, for instance, to targeting strategies (Hazin et al., 2007). However, in another recent study from the South Atlantic, almost 80 percent of the oceanic whitetip sharks caught in the Brazilian longline tuna fleet between 2004 and 2009 were juveniles (Tolotti et al., 2010), which, in combination with significantly low catches and low patchy abundance in areas where the species was formerly abundant, may be indicative of significant fishing pressure leading to population declines. Further, increases in effort of the Spanish longline fleet, as well as the expansion of fishing activities by southern coastal countries, such as Brazil and Uruguay, occurred in the early to mid-1990s (FAO, 2012), which may have contributed to declines in oceanic whitetip abundance. Without any robust standardized fisheries data to account for various factors that may affect the catch rate of oceanic whitetip, the species' abundance and trends in this region are highly uncertain. However, we agree with the petition that the available information indicates that overutilization may be a threat to the species in this region, as evidenced by low catch rates and landings in various fisheries that comport with increases in fishing effort, as well as the prevalence of immature sharks comprising the majority of catches of major pelagic longline fishing fleets in the region.

As in the Atlantic Ocean, the oceanic whitetip was also formerly one of the most abundant sharks throughout the Pacific Ocean. Evidence shows that oceanic whitetips commonly interact with both longline and purse-seine fisheries throughout the Pacific, with at least 20 member nations of the Western and Central Pacific Fisheries Commission recording the species in their fisheries. In the Western and Central Pacific, where sharks represent 25 percent of the longline fishery catch, observer data show that the oceanic whitetip shark is the 5th most common species of shark caught as bycatch out of a total 49 species reported by observers, and represents approximately 3 percent of the total shark catch. Additionally, the oceanic whitetip is the 2nd most common species of shark caught as bycatch in purse-seine fisheries in this region, representing nearly 11 percent of the total shark catch (Molony, 2007). In a recent stock assessment of oceanic whitetip sharks in the Western and Central Pacific, the greatest impact on the species is attributed to bycatch from the longline fishery, with lesser impacts from target longline activities and purse-seining (Rice and Harley, 2012). From 1995 to 2009, rates of fishing mortality consistently increased, driven mainly by the increased effort in the longline fleet over the same time period, and remain substantially above maximum sustainable yield (MSY) (i.e., the point at which there would be an equilibrium) for the species. As a result of this increasing fishing pressure, estimated spawning biomass declined by 86 percent over the time period, which is far below spawning biomass at MSY, indicating that the stock is overfished. Further, estimates of the stock depletion are that the total biomass has been reduced to only 6.6 percent of the theoretical equilibrium virgin biomass. In fact, the stock assessment concluded that fishing mortality on oceanic whitetip sharks in the Western and Central Pacific has increased to levels 6.5 times what is sustainable, thus concluding that overfishing is still occurring. Given that fishing pressure began well before the start of this time series, the authors of the stock assessment noted that it was not assumed that the oceanic whitetip population was at an unfished state of equilibrium at the start of the model (i.e., 1995). Thus, these declines do not reflect total historical population declines for the species in this region prior to the study. Further, this study does not include removals of oceanic whitetips from Indonesia and the Philippines, which are two major shark catching nations in this region.

Although standardized CPUE data for the purse-seine fishery are not available, the oceanic whitetip is one of only two species frequently caught in this fishery and has exhibited declines that resemble those in the longline fishery (Clarke et al., 2012). As a result of the intensive fishing pressure in the Western and Central Pacific, size trends for oceanic whitetip are also declining, which may also be indicative of overutilization of the species, particularly due to the potential correlation between maternal length and litter size. Clarke et al. (2012) report the length of female oceanic whitetip sharks from the longline fishery declined in their core tropical habitat. Similarly, while Rice et al. (2015) more recently report that trends in oceanic whitetip median length are stable, the majority of sharks observed are immature. Similarly, since 2000, 100 percent of oceanic whitetips sampled in the purse-seine fisheries have been immature (Clarke et al., 2012). Thus, the significant declining trends observed in all available abundance indices (e.g., standardized CPUE, biomass and average size) of oceanic whitetips as a result of fishing mortality in both longline and purse-seine fisheries indicate that overutilization of the species may be occurring in the Western and Central Pacific.

In the Central Pacific, oceanic whitetips are commonly caught as bycatch in Hawaii-based fisheries, and comprise 3 percent of the shark catch (Brodziak and Walsh, 2013). Based on observer data from the Pacific Islands Regional Observer Program (PIROP), oceanic whitetip shark mean annual nominal CPUE decreased significantly from 0.428/1000 hooks in 1995 to 0.036/1000 hooks in 2010. This reflected a significant decrease in nominal CPUE on longline sets with positive catch from 1.690/1000 hooks to 0.773/1000 hooks, and a significant increase in longline sets with zero catches from 74.7 percent in 1995 to 95.3 percent in 2010. When standardized to account for factors such as sea surface temperature, fishery sector, and latitude, oceanic whitetip CPUE declined by more than 90 percent in the Hawaii-based longline fishery since 1995. Brodziak and Walsh (2013) found similar results by using several models in order to make an accurate assessment of the species' CPUE from 1995 to 2010 in the Hawaii-based shallow-set and deep-set longline fisheries. They also found a highly significant decreasing trend in standardized CPUE from 1995 to 2010, resulting in a decline in relative abundance on the order of 90 percent due to increased sets with zero catches as well as decreased CPUE on sets with positive catch. The authors of this study concluded that relative abundance of oceanic whitetip declined within a few years of the expansion of the longline fishery.

In the Eastern Pacific Ocean, oceanic whitetip sharks are most often taken as bycatch by ocean purse-seine fisheries. The oceanic whitetip shark was historically described as the second most common shark caught by the purse-seine fishery in the EPO (Compagno, 1984), and information collected by observers between 1993 and 2004 indicates this is still the case. In a recent effort to evaluate species composition of bycatch in Eastern Pacific purse-seine fisheries, species identification data for the Shark Characteristics Sampling Program showed that between March 2000 and March 2001, the oceanic whitetip comprised 20.8 percent of the total shark bycatch, second only to silky sharks (Román-Verdesoto and Orozco-Zöller, 2005). Since the mid-1980s, the tuna purse-seine fishery in the Pacific has been rapidly expanding (Williams and Terawasi, 2011), and despite the increase in fishery effort (or perhaps as a consequence of this increased fishing pressure), incidental catch of oceanic whitetips declined by more than 95 percent in the Eastern Pacific between 1994 and 2006. However, this decline is based on an unstandardized index using observer data from 100 percent of sets during the relatively short period that fish aggregating devices have been used (FAO, 2012). Overall, we found that apart from blue and silky sharks, there are no stock assessments available for shark species in the Eastern Pacific, and hence the impacts of bycatch on the population are unknown (IATTC, 2014). Nonetheless, a potential decline of this magnitude over a short period of time indicates that overutilization of the oceanic whitetip may be occurring in Eastern Pacific purse-seine fisheries, and warrants further investigation to determine whether it may be contributing significantly to the species' extinction risk.

In the Indian Ocean, oceanic whitetip sharks are targeted by some semi-industrial and artisanal fisheries and are bycatch of industrial fisheries, including gillnet fisheries, pelagic longlines targeting tuna and swordfish and purse-seine fisheries. Countries that fish for various pelagic species of sharks include: Egypt, India, Iran, Oman, Saudi Arabia, Sudan, United Arab Emirates, and Yemen, where the probable or actual status of shark populations is unknown, and Maldives, Kenya, Mauritius, Seychelles, South Africa, and United Republic of Tanzania, where the actual status of shark populations is presumed to be fully to over-exploited (DeYoung, 2006). While fisheries are directed at other species, oceanic whitetip sharks are commonly caught as bycatch and catch rates are considered high (IOTC, 2014); however, the available information from Indian areas-fleets reports relatively low prevalence of this species among target and/or other bycatch species caught by longliners targeting swordfish or tuna (Ramos-Cartelle et al., 2012). Available fisheries data from Japanese and Spanish longline fishing fleets show conflicting catch trends. Standardized CPUE of the Japanese longline fleet in the Indian Ocean show a gradual decline of almost 40 percent from 2003 to 2009 (Semba and Yokawa, 2011). Standardized CPUE of the Spanish longline fishery from 1998 to 2011 showed large historical fluctuations and a general decreasing trend in 1998-2007, followed by an increase thereafter. Overall, the magnitude of decline in this study was estimated to be about 25-30 percent (Ramos-Cartelle et al., 2012). Nominal catches for oceanic whitetips also declined over this time period, peaking in 1999 with 3,050 mt and steadily declining to 245 mt in 2009. However, catch estimates for oceanic whitetip shark are uncertain, as only five contracting parties (CPCs) have reported detailed data on shark landings (i.e., Australia, EU (Spain, Portugal and United Kingdom), I.R. Iran, South Africa, and Sri Lanka) (IOTC, 2014). In fact, catches of oceanic whitetips in the Indian Ocean are thought to be nearly 20 times higher than the estimates reported in the Indian Ocean Tuna Commission (IOTC) database (Murua et al., 2013). Additionally, oceanic whitetips were found to have relatively high vulnerability to pelagic longline fisheries in the Indian Ocean. In 2012, an Ecological Risk Assessment (ERA) was developed by the IOTC Scientific Committee to quantify which shark species are most at risk from the high levels of pelagic longline fishing pressure. In this ERA, the IOTC Scientific Committee noted that oceanic whitetip received a high vulnerability ranking (No. 5 out of 17) for longline gear because it was estimated as one of the least productive shark species, and was also characterized by a high susceptibility to longline gear (Murua et al., 2012). Oceanic whitetip shark was also estimated as being the most vulnerable shark species to purse-seine gear (Murua et al., 2013). Overall, available standardized CPUE indices from Japanese and Spanish longline fleets indicate conflicting trends, with no quantitative stock assessment and only limited basic fishery indicators currently available for the species. However, there are no CPUE data available from gillnet fisheries, which is responsible for the majority of catches of oceanic whitetips in the Indian Ocean (Murua et al., 2013). Therefore, the IOTC noted in 2014 that the stock status of oceanic whitetip is uncertain. However, the IOTC also reported in 2014 that “maintaining or increasing effort in this region will probably result in declines in biomass, productivity and CPUE” for oceanic whitetip sharks (IOTC, 2014). Thus, while catch data are incomplete and cannot be used to estimate abundance levels or determine the magnitude of catches or trends for oceanic whitetips at this time, pelagic fishing effort in this region is high, with no indication that fishing pressure will cease in the foreseeable future. Given the foregoing information, we conclude that overutilization may be a threat to the species in the Indian Ocean and warrants further exploration to determine if it is contributing significantly to the extinction risk of the species.

Overall, there is considerable uncertainty regarding the actual catch levels and trends of oceanic whitetip shark occurring throughout its range; however, it is likely that these rates are significantly under-reported due to a lack of comprehensive observer coverage in areas of its range in which the highest fishing pressure occurs, as well as a tendency for fishers to not record discards in fishery logbooks. Nevertheless, given the prevalence of oceanic whitetip as incidental catch throughout its range and its high value in the shark fin trade, combined with the species' low to moderate productivity (see Factor E—Other or Natural Manmade Factors), bycatch-related fishing mortality may be a threat placing the species at an increased risk of extinction. Overall, trends in the Northwest and Central Atlantic Ocean and Gulf of Mexico suggest that the species experienced historical declines from overexploitation, but may be stabilized in recent years, although there is considerable uncertainty regarding these trends. Across the Pacific, numerous lines of evidence suggest that oceanic whitetip sharks are experiencing significant and continued population declines as a result of fishing pressure. Elsewhere across the species' range, information in the petition and in our files suggests that the species may continue to experience declines as a result of overutilization from both direct and indirect fishing pressure. In summary, the petition, references cited, and information in our files comprise substantial information indicating that listing may be warranted because of overutilization for commercial purposes.

The petition contends that the oceanic whitetip shark is at risk of extinction throughout its range because some oceanic whitetip sharks are infected with a highly pathogenic bacterium, Vibrio harveyi (Zhang, et al., 2009), which is known to cause deep dermal lesions, gastro-enteritis, eye lesions, infectious necrotizing enteritis, vasculitis, and skin ulcers in vertebrate marine species (Austin and Zhang, 2006). The petition asserts that since this bacterium is considered to be more serious in immunocompromised hosts (Austin and Zhang, 2006), it may act synergistically with the potential high pollutant loads that oceanic whitetip sharks experience, creating an increased threat to the species. As noted previously, we generally look for information in the petition and in our files to indicate that not only is the particular species exposed to a factor, but that the species may be responding in a negative fashion. However, the petition did not provide, nor could we find in our files, any supporting evidence that this bacterium is contributing to population declines in oceanic whitetip sharks to the point where the species may be at risk of extinction.

The petition asserts that the existing international, regional, and national regulations do not adequately protect the oceanic whitetip shark and have been insufficient in preventing population declines. Additionally, the petition asserts that most existing regulations are inadequate because they limit retention of the oceanic whitetip shark and argues that the focus should be on limiting the catch of oceanic whitetip sharks in order to decrease fishery-related mortality, particularly given what the petition contends are the species' high post-catch mortality rates. Among the regulations that the petition cites as inadequate are shark finning bans and shark finning regulations. Shark finning bans are currently one of the most widely used forms of shark utilization regulations, and the petition notes that 21 countries, the European Union, and 9 Regional Fisheries Management Organizations (RFMOs) have implemented shark finning bans (CITES, 2013). However, the petition contends that these shark finning bans are often ineffective as enforcement is difficult or lacking, implementation in RFMOs and international agreements is not always binding, and catches often go unreported (CITES, 2013). The petition also states that shark finning regulations tend to have loopholes that can be exploited to allow continued finning. Many shark finning regulations require that both the carcass and the fins be landed, but not necessarily naturally attached. Instead, the regulations impose a fin to carcass ratio weight, which is usually 5 percent (Dulvy et al., 2008). This allows fishermen to preferentially retain the carcasses of valuable species and valuable fins from other species in order to maximize profits (Abercrombie et al., 2005). In 2010, the United States passed the Shark Conservation Act, which except for a limited exception regarding smooth dogfish, requires all sharks to be landed with their fins attached, abolishing the fin to carcass ratio (although this requirement was already implemented in 2008). Additionally, several U.S. states have prohibited the sale or trade of shark fins/products as well, including Hawaii, Oregon, Washington, California, Illinois, Maryland, Delaware, New York and Massachusetts, subsequently decreasing the United States' contribution to the fin trade. For example, after the state of Hawaii prohibited finning in its waters in 2000 and required shark fins to be landed with their corresponding carcasses in the state, shark fin imports from the United States into Hong Kong declined significantly (54 percent decrease, from 374 to 171 tonnes) as Hawaii could no longer be used as a fin trading center for the international fisheries operating and finning in the Central Pacific (Miller et al., 2014). However, in other parts of the species' range, the inadequacy of existing finning bans may be contributing to further declines in the species by allowing the wasteful practice of shark finning at sea to continue.

In the U.S. Atlantic, oceanic whitetip sharks are managed as part of the Pelagic shark complex under the U.S. Highly Migratory Species Fishery Management Plan (HMS FMP). The petition states that while the United States has a patchwork of measures that protect the oceanic whitetip to varying degrees, none of these measures (i.e., catch quotas, species-specific retention bans, and shark-finning bans) are adequate to protect the species. More specifically, the petition asserts that the catch quota for the pelagic complex under the U.S. HMS FMP of 488 mt, in which catches of oceanic whitetip is combined with other species, is inadequate because it is not species-specific, and, as a result, all or none of the 488 tons of sharks from this quota could be oceanic whitetips. The petition also states that the final rule to implement the 2010 International Commission on the Conservation of Atlantic Tunas (ICCAT) recommendations, which prohibits the retention, transshipping, landing, storing, or selling of oceanic whitetip sharks caught in association with fisheries managed by ICCAT, is inadequate because these regulations are limited in scope, such that some commercial and recreational fisheries are still allowed to catch oceanic whitetip sharks. The petition also asserts that these regulations are inadequate because they only apply in the Atlantic and Gulf of Mexico in Federal waters. We disagree with these assertions by the petition. We find that U.S. national fishing regulations include numerous regulatory mechanisms for both sharks in general, and oceanic whitetip specifically, that may help protect the species. Since 2002, well before the prohibition of oceanic whitetips in Atlantic HMS pelagic longline fisheries, total commercial landings of oceanic whitetip have rarely exceeded 1 mt, which represents a minimal portion of the 488 mt quota for the Pelagic complex group. Given that most U.S.-flagged vessels fish at the northernmost part of the range of the oceanic whitetip, the low abundance of this species likely reflects the distribution of the fishery (Beerkircher et al., 2002). Additionally, since the implementation of ICCAT recommendations in 2011, estimated commercial landings of oceanic whitetip declined from 1.1 mt to only 0.03 mt (NMFS, 2012 and 2014 SAFE Reports). Further, oceanic whitetip sharks are not targeted in U.S. recreational fisheries. In fact, estimates of recreationally harvested oceanic whitetips have been zero since 2002. On the other hand, we agree with the petition that these regulations do not necessarily address incidental catch of the species and subsequent mortality that may result. However, in 2013, NMFS reported a total of 33 prohibited interactions with oceanic whitetip, with 88 percent released alive (NMFS, 2014 SAFE Report), which is a relatively high rate of survivorship. Thus, while we find that the petitioners are incorrect in their assertions that regulations pertaining to oceanic whitetip shark in U.S. Atlantic HMS fisheries offer minimal to no protection to the oceanic whitetip, we will evaluate the potential inadequacy of these and the other existing regulations in relation to the threat of overutilization of the species during the status review.

In terms of other national measures, the petition provides a list of countries that have prohibited shark fishing in their respective waters or created shark-specific marine protected areas, but notes that many suffer from enforcement related issues, citing cases of illegal fishing and shark finning. The petition also highlights enforceability issues associated with international agreements, such as the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), regarding oceanic whitetip shark utilization and trade. The oceanic whitetip is listed under Appendix II of CITES, which means commercial trade of the species is regulated, but not prohibited. Based on the information presented in the petition as well as information in our files, we find that oceanic whitetip fins are highly valued and preferred in the shark fin trade, and can be identified in the shark fin market at the species level. While regulations banning the finning of sharks are a common form of shark management, we find that further evaluation of the inadequacy of existing regulatory measures is needed to determine whether this may be a threat contributing to the extinction risk of the species.

The petition states that oceanic whitetips have an increased susceptibility to extinction because they are a “K-selected” or “K-strategy” species. In other words, the petition asserts that the biological constraints of the oceanic whitetip shark, such as its low reproduction rate (typically 5-6 pups per litter), coupled with the time required to reach maturity (approximately 4-7 years) and the species' biennial reproductive cycle, contribute to the species' vulnerability to harvesting and its inability to recover rapidly. It is true that the oceanic whitetip shark and pelagic sharks, in general, exhibit relatively slow growth rates and low fecundity; however, oceanic whitetip sharks are considered to be a moderately productive species relative to other pelagic sharks. Smith et al. (1998) investigated the intrinsic rebound potential of Pacific sharks and found oceanic whitetips have a moderate rebound potential, because of their relatively fast growth and early maturation. Cortés (2008) calculated population growth rates (λ) of 1.069 year− 1 and a generation time of 11.1 years, which were considered intermediary when compared with seven other pelagic species. However, estimates of the species' growth rate (von Bertalanffy, k = 0.10 year− 1 in the North Pacific (Seki et al., 1998) and between 0.08-0.09 year− 1 in the Western Atlantic (Lessa et al., 1999)) indicate that oceanic whitetips are slow growing species. Additionally, the species' intrinsic rate of increase (r = 0.121 year− 1; Cortés et al., 2012) indicates that populations are vulnerable to depletion and will be slow to recover from over-exploitation based on FAO's low-productivity category (<0.14 year− 1). Finally, an ERA conducted to inform the ICCAT categorized the relative risk of overexploitation of the 11 major species of pelagic sharks, including the oceanic whitetip (Cortés et al., 2010). The study derived an overall vulnerability ranking for each of the 11 species, which was defined as “a measure of the extent to which the impact of a fishery [Atlantic longline] on a species will exceed its biological ability to renew itself.” This robust assessment found that oceanic whitetips ranked the 5th most vulnerable out of 11 pelagic shark species (Cortés et al., 2010). More recently, in an ERA that expands upon the 2010 results, oceanic whitetip ranked 6th out of 20 pelagic shark species in terms of its susceptibility to pelagic longline gear, which places the oceanic whitetip at a relatively high risk of overexploitation to the combined pelagic longline fisheries in the Atlantic Ocean. Likewise, in an ERA in the Indian Ocean, oceanic whitetip ranked the 5th most vulnerable species of pelagic shark caught in fisheries managed by the IOTC (Murua et al., 2012). In summary, the petition, references cited, and information in our files comprises substantial information indicating that the species may be impacted by “other natural or manmade factors,” including the life history trait of slow productivity, such that further exploration is warranted to determine if it is contributing significantly to the species' risk of extinction.

We conclude that the petition does not present substantial scientific or commercial information indicating that the ESA section (4)(a)(1) threats of “present or threatened destruction, modification, or curtailment of its habitat or range,” or “disease or predation” may be causing or contributing to an increased risk of extinction for the global population of the oceanic whitetip shark. However, we conclude that the petition and information in our files do present substantial scientific or commercial information indicating that the section 4(a)(1) factor “overutilization for commercial, recreational, scientific, or educational purposes” as well as “inadequacy of existing regulatory mechanisms” and “other manmade or natural factors” may be causing or contributing to an increased risk of extinction for the species.

Based on the above information and the criteria specified in 50 CFR 424.14(b)(2), we find that the petition and information readily available in our files present substantial scientific and commercial information indicating that the petitioned action of listing the oceanic whitetip shark worldwide as threatened or endangered may be warranted. Therefore, in accordance with section 4(b)(3)(A) of the ESA and NMFS' implementing regulations (50 CFR 424.14(b)(3)), we will commence a status review of the species. During the status review, we will determine whether the species is in danger of extinction (endangered) or likely to become so within the foreseeable future (threatened) throughout all or a significant portion of its range. We now initiate this review, and thus, we consider the oceanic whitetip shark to be a candidate species (69 FR 19975; April 15, 2004). Within 12 months of the receipt of the petition (September 21, 2016), we will make a finding as to whether listing the species as endangered or threatened is warranted as required by section 4(b)(3)(B) of the ESA. If listing the species is found to be warranted, we will publish a proposed rule and solicit public comments before developing and publishing a final rule.

To ensure that the status review is based on the best available scientific and commercial data, we are soliciting information relevant to whether the oceanic whitetip shark is endangered or threatened. Specifically, we are soliciting information in the following areas: (1) Historical and current distribution and abundance of this species throughout its range; (2) historical and current population trends; (3) life history in marine environments, including identified nursery grounds; (4) historical and current data on oceanic whitetip shark bycatch and retention in industrial, commercial, artisanal, and recreational fisheries worldwide; (5) historical and current data on oceanic whitetip shark discards in global fisheries; (6) data on the trade of oceanic whitetip shark products, including fins, jaws, meat, and teeth; (7) any current or planned activities that may adversely impact the species; (8) ongoing or planned efforts to protect and restore the species and its habitats; (9) population structure information, such as genetics data; and (10) management, regulatory, and enforcement information. We request that all information be accompanied by: (1) Supporting documentation such as maps, bibliographic references, or reprints of pertinent publications; and (2) the submitter's name, address, and any association, institution, or business that the person represents.

A complete list of references is available upon request to the Office of Protected Resources (see ADDRESSES).

The authority for this action is the Endangered Species Act of 1973, as amended (16 U.S.C. 1531 et seq.).