80.620—What are the additional requirements for diesel fuel or distillates produced by foreign refineries subject to a temporary refiner compliance option, hardship provisions, or motor vehicle
(a) Definitions.
(1)
A foreign refinery is a refinery that is located outside the United States, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands (collectively referred to in this section as “the United States”).
(2)
A foreign refiner is a person who meets the definition of refiner under § 80.2(i) for a foreign refinery.
(3)
A diesel fuel program foreign refiner (“DFR”) is a foreign refiner that has been approved by EPA for participation in any motor vehicle diesel fuel or NRLM diesel fuel provision of § 80.530 through 80.533, or §§ 80.535, 80.536, 80.540, 80.552, 80.553, 80.554, 80.560 or 80.561 (collectively referred to as “diesel foreign refiner program”).
(4)
“DFR-Diesel” means diesel fuel or distillate fuel as applicable under subpart I of this part produced at a DFR refinery that is imported into the United States.
(5)
“Non-DFR-Diesel” means diesel fuel or distillate fuel that is produced at a foreign refinery that has not been approved as a DFR foreign refiner, diesel fuel produced at a DFR foreign refinery that is not imported into the United States, and diesel fuel produced at a DFR foreign refinery during a period when the foreign refiner has opted to not participate in the DFR-Diesel foreign refiner program under paragraph (c)(3) of this section.
(6)
“Certified DFR-Diesel” means DFR-Diesel the foreign refiner intends to include in the foreign refinery's compliance calculations under any provisions of § 80.530 through 80.533, or §§ 80.535, 80.536, 80.540, 80.552, 80.553, 80.554, 80.560 or 80.561 and does include in these compliance calculations when reported to EPA.
(7)
“Non-Certified DFR-Diesel” means DFR-Diesel fuel that a DFR foreign refiner imports to the United States that is not Certified DFR-Diesel.
(b) Baseline.
For any foreign refiner to obtain approval under the diesel foreign refiner program of this subpart for any refinery, it must apply for approval under the applicable provisions of this subpart. To obtain approval the refiner is required, as applicable, to demonstrate a volume baseline under subpart I of this part.
(1)
The refiner shall follow the procedures, applicable to volume baselines and using diesel fuel, or if applicable, heating oil, instead of gasoline, in §§ 80.91 through 80.93 to establish the volume of motor vehicle diesel fuel that was produced at the refinery and imported into the United States during the applicable years for purposes of establishing a baseline under Subpart I for applicable fuels produced for use in the United States.
(2)
In making determinations for foreign refinery baselines EPA will consider all information supplied by a foreign refiner, and in addition may rely on any and all appropriate assumptions necessary to make such determinations.
(3)
Where a foreign refiner submits a petition that is incomplete or inadequate to establish an accurate baseline, and the refiner fails to correct this deficiency after a request for more information, EPA will not assign an individual refinery baseline.
(c) General requirements for DFR foreign refiners.
A foreign refiner of a refinery that is approved under the diesel foreign refiner program of this subpart must designate each batch of diesel fuel produced at the foreign refinery that is exported to the United States as either Certified DFR-Diesel or as Non-Certified DFR-Diesel, except as provided in paragraph (c)(3) of this section. It must further designate all Certified DFR-Diesel as provided in § 80.598, and designate whether the diesel fuel is dyed or undyed, and for heating oil and/or locomotive or marine diesel fuel whether it is marked or unmarked under § 80.510(d) through (f). It must further designate any credits earned as either nonroad diesel credits or motor vehicle diesel credits.
(1)
In the case of Certified DFR-Diesel, the foreign refiner must meet all requirements that apply to refiners under this subpart, except that:
(i)
For purposes of complying with the compliance option requirements of § 80.530, motor vehicle diesel fuel produced by a foreign refinery must comply separately for each Credit Trading Area of import, as defined in § 80.531(a)(5).
(ii)
For purposes of complying with the compliance option requirements of § 80.530, credits obtained from any other refinery or from any importer must have been generated in the same Credit Trading Area as the Credit Trading Area of import of the fuel for which credits are needed to achieve compliance.
(iii)
For purposes of generating credits under § 80.531, credits shall be generated separately by Credit Trading Area of import and shall be designated by Credit Trading Area of importation and by port of importation.
(2)
In the case of Non-Certified DFR-Diesel, the foreign refiner shall meet all the following requirements:
(3)
(i)
Any foreign refiner that has been approved to produce diesel fuel subject to the diesel foreign refiner program for a foreign refinery under this subpart may elect to classify no diesel fuel imported into the United States as DFR-Diesel provided the foreign refiner notifies EPA of the election no later than 60 calendar days prior to the beginning of the compliance period.
(ii)
An election under paragraph (c)(3)(i) of this section shall be for a 12 month compliance period and apply to all diesel fuel that is produced by the foreign refinery that is imported into the United States, and shall remain in effect for each succeeding year unless and until the foreign refiner notifies EPA of the termination of the election. The change in election shall take effect at the beginning of the next annual compliance period.
(d) Designation, product transfer documents, and foreign refiner certification.
(1)
Any foreign refiner of a foreign refinery that has been approved by EPA to produce motor vehicle diesel fuel subject to the diesel foreign refiner program must designate each batch of DFR-Diesel as such at the time the diesel fuel is produced, unless the refiner has elected to classify no diesel fuel exported to the United States as DFR-Diesel under paragraph (c)(3) of this section.
(2)
On each occasion when any person transfers custody or title to any DFR-Diesel prior to its being imported into the United States, it must include the following information as part of the product transfer document information in this section:
(i)
Designation of the diesel fuel or distillate as Certified DFR-Diesel or as Non-Certified DFR-Diesel, and if it is Certified DFR-Diesel, further designate the fuel pursuant to § 80.598, and whether the diesel fuel or distillate is dyed or undyed, and for heating oil whether it is marked or unmarked under § 80.510(d) through (f), and all other applicable product transfer document information required under § 80.590; and
(ii)
The name and EPA refinery registration number (under § 80.597) of the refinery where the DFR-Diesel was produced.
(3)
On each occasion when DFR-Diesel is loaded onto a vessel or other transportation mode for transport to the United States, the foreign refiner shall prepare a certification for each batch of the DFR-Diesel that meets the following requirements.
(i)
The certification shall include the report of the independent third party under paragraph (f) of this section, and the following additional information:
(1) The sulfur content as determined under paragraph (f) of this section, and the applicable designations stated in paragraph (d)(2)(i) of this section; and
(2) A declaration that the DFR-Diesel is being included in the applicable compliance calculations required by EPA under this subpart.
(e) Transfers of DFR-Diesel to non-United States markets.
The foreign refiner is responsible to ensure that all diesel fuel classified as DFR-Diesel is imported into the United States. A foreign refiner may remove the DFR-Diesel classification, and the diesel fuel need not be imported into the United States, but only if:
(A)
The volume of diesel from the refinery's compliance report under § 80.593, § 80.601, or § 80.604; and
(B)
In the case of Certified DFR-Diesel, the volume of the diesel fuel from the compliance report under § 80.593, § 80.601, or § 80.604.
(ii)
The exclusions under paragraph (e)(1)(i) of this section shall be on the basis of the designations under § 80.598 and this section, and volumes determined under paragraph (f) of this section.
(2)
The foreign refiner obtains sufficient evidence in the form of documentation that the diesel fuel was not imported into the United States.
(f) Load port independent sampling, testing and refinery identification.
(1)
On each occasion that DFR-Diesel is loaded onto a vessel for transport to the United States a foreign refiner shall have an independent third party:
(ii)
Determine the volume of DFR-Diesel loaded onto the vessel (exclusive of any tank bottoms before loading);
(iv)
Determine the name and country of registration of the vessel used to transport the DFR-Diesel to the United States; and
(2)
On each occasion that Certified DFR-Diesel is loaded onto a vessel for transport to the United States a foreign refiner shall have an independent third party:
(i)
Collect a representative sample of the Certified DFR-Diesel from each vessel compartment subsequent to loading on the vessel and prior to departure of the vessel from the port serving the foreign refinery;
(ii)
Determine the sulfur content value for each compartment, and if applicable, the marker content under § 80.510(d) through (f) using an approved methodology as specified in §§ 80.580 through 80.586 by one of the following:
(iii)
Review original documents that reflect movement and storage of the certified DFR-Diesel from the refinery to the load port, and from this review determine:
(1) Non-DFR-Diesel and Non-Certified DFR-Diesel; and
(2) Other Certified DFR-Diesel produced at a different refinery.
(i)
To the foreign refiner containing the information required under paragraphs (f)(1) and (f)(2) of this section, to accompany the product transfer documents for the vessel; and
(ii)
To the Administrator containing the information required under paragraphs (f)(1) and (f)(2) of this section, within thirty days following the date of the independent third party's inspection. This report shall include a description of the method used to determine the identity of the refinery at which the diesel fuel or distillate was produced, assurance that the diesel fuel or distillate remained segregated as specified in paragraph (n)(1) of this section, and a description of the diesel fuel's movement and storage between production at the source refinery and vessel loading.
(i)
Be approved in advance by EPA, based on a demonstration of ability to perform the procedures required in this paragraph (f);
(iii)
Sign a commitment that contains the provisions specified in paragraph (i) of this section with regard to activities, facilities and documents relevant to compliance with the requirements of this paragraph (f).
(g) Comparison of load port and port of entry testing.
(1)
Any foreign refiner and any United States importer of Certified DFR-Diesel shall compare the results from the load port testing under paragraph (f) of this section, with the port of entry testing as reported under paragraph (o) of this section, for the volume of diesel fuel and the sulfur content value; except as specified in paragraph (g)(1)(ii) of this section.
(ii)
Where a vessel transporting Certified DFR-Diesel off loads this diesel fuel at more than one United States port of entry, and the conditions of paragraph (g)(2)(i) of this section are met at the first United States port of entry, the requirements of paragraph (g)(2) of this section do not apply at subsequent ports of entry if the United States importer obtains a certification from the vessel owner that meets the requirements of paragraph (s) of this section, that the vessel has not loaded any diesel fuel or blendstock between the first United States port of entry and the subsequent port of entry.
(A)
The temperature-corrected volumes determined at the port of entry and at the load port differ by more than one percent; or
(B)
The sulfur content value determined at the port of entry is higher than the sulfur content value determined at the load port, and the amount of this difference is greater than the reproducibility amount specified for the port of entry test result by the American Society of Testing and Materials (ASTM) for a test method used for testing the port of entry sample under the provisions §§ 80.580 through 80.586.
(ii)
The United States importer and the foreign refiner shall treat the diesel fuel as Non-Certified DFR-Diesel, and the foreign refiner shall exclude the diesel fuel volume from its diesel fuel volumes calculations and sulfur standard designations under § 80.598.
(h) Attest requirements.
Refiners, for each annual compliance period, must arrange to have an attest engagement performed of the underlying documentation that forms the basis of any report required under this subpart. The attest engagement must comply with the procedures and requirements that apply to refiners under §§ 80.125 through 80.130, or other applicable attest engagement provisions, and must be submitted to the Administrator of EPA by August 31 of each year for the prior annual compliance period. The following additional procedures shall be carried out for any foreign refiner of DFR-Diesel.
(1)
The inventory reconciliation analysis under § 80.128(b) and the tender analysis under § 80.128(c) shall include Non-DFR-Diesel.
(2)
Obtain separate listings of all tenders of Certified DFR-Diesel and of Non-Certified DFR-Diesel, and obtain separate listings of Certified DFR-Diesel based on whether it is 15 ppm sulfur content diesel fuel, 500 ppm sulfur content diesel fuel or high sulfur fuel having a sulfur content greater than 500 ppm (and if so, whether the fuel is heating oil, small refiner diesel fuel, diesel fuel produced through the use of credits, or other applicable designation under § 80.598 ). Agree the total volume of tenders from the listings to the diesel fuel inventory reconciliation analysis in § 80.128(b), and to the volumes determined by the third party under paragraph (f)(1) of this section.
(3)
For each tender under paragraph (h)(2) of this section, where the diesel fuel is loaded onto a marine vessel, report as a finding the name and country of registration of each vessel, and the volumes of DFR-Diesel loaded onto each vessel.
(4)
Select a sample from the list of vessels identified in paragraph (h)(3) of this section used to transport Certified DFR-Diesel, in accordance with the guidelines in § 80.127, and for each vessel selected perform the following:
(i)
Obtain the report of the independent third party, under paragraph (f) of this section, and of the United States importer under paragraph (o) of this section.
(A)
Agree the information in these reports with regard to vessel identification, diesel fuel volumes and sulfur content test results.
(B)
Identify, and report as a finding, each occasion the load port and port of entry sulfur content and volume results differ by more than the amounts allowed in paragraph (g) of this section, and determine whether the foreign refiner adjusted its refinery calculations as required in paragraph (g) of this section.
(ii)
Obtain the documents used by the independent third party to determine transportation and storage of the Certified DFR-Diesel from the refinery to the load port, under paragraph (f) of this section. Obtain tank activity records for any storage tank where the Certified DFR-Diesel is stored, and pipeline activity records for any pipeline used to transport the Certified DFR-Diesel, prior to being loaded onto the vessel. Use these records to determine whether the Certified DFR-Diesel was produced at the refinery that is the subject of the attest engagement, and whether the Certified DFR-Diesel was mixed with any Non-Certified DFR-Diesel, Non-DFR-Diesel, or any Certified DFR-Diesel produced at a different refinery.
(5)
Select a sample from the list of vessels identified in paragraph (h)(3) of this section used to transport certified and Non-Certified DFR-Diesel, in accordance with the guidelines in § 80.127, and for each vessel selected perform the following:
(i)
Obtain a commercial document of general circulation that lists vessel arrivals and departures, and that includes the port and date of departure of the vessel, and the port of entry and date of arrival of the vessel.
(ii)
Agree the vessel's departure and arrival locations and dates from the independent third party and United States importer reports to the information contained in the commercial document.
(i)
Agree the total volume and sulfur content of tenders from the listings to the diesel fuel inventory reconciliation analysis in § 80.128(b).
(ii)
Obtain a separate listing of the tenders under this paragraph (h)(6) where the diesel fuel is loaded onto a marine vessel. Select a sample from this listing in accordance with the guidelines in § 80.127, and obtain a commercial document of general circulation that lists vessel arrivals and departures, and that includes the port and date of departure and the ports and dates where the diesel fuel was off loaded for the selected vessels. Determine and report as a finding the country where the diesel fuel was off loaded for each vessel selected.
(ii)
Be licensed as a Certified Public Accountant in the United States and a citizen of the United States, or be approved in advance by EPA based on a demonstration of ability to perform the procedures required in §§ 80.125 through 80.130 and this paragraph (h); and
(iii)
Sign a commitment that contains the provisions specified in paragraph (i) of this section with regard to activities and documents relevant to compliance with the requirements of §§ 80.125 through 80.130 and this paragraph (h).
(i) Foreign refiner commitments.
Any foreign refiner shall commit to and comply with the provisions contained in this paragraph (i) as a condition to being approved for a temporary refiner diesel fuel program option.
(1)
Any United States Environmental Protection Agency inspector or auditor must be given full, complete and immediate access to conduct inspections and audits of the foreign refinery.
(D)
DFR-Diesel is stored or transported between the foreign refinery and the United States, including storage tanks, vessels and pipelines.
(iv)
Any documents requested that are related to matters covered by inspections and audits must be provided to an EPA inspector or auditor on request.
(A)
Refinery baseline establishment, if applicable, including the volume, sulfur content and dye and marker status of diesel fuel, heating oil and other distillates; transfers of title or custody of any diesel fuel, heating oil or blendstocks whether DFR-Diesel or Non-DFR-Diesel, produced at the foreign refinery during the period January 1, 1998 through the date of the refinery baseline petition or through the date of the inspection or audit if a baseline petition has not been approved, and any work papers related to refinery baseline establishment;
(C)
The proper classification of diesel fuel as being DFR-Diesel or as not being DFR-Diesel, or as Certified DFR-Diesel or as Non-Certified DFR-Diesel, and all other relevant designations under this subpart, including § 80.598 and this section;
(F)
Work performed and reports prepared by independent third parties and by independent auditors under the requirements of this section, including work papers; and
(vi)
Inspections and audits by EPA may include taking samples of diesel fuel, heating oil, other distillates, diesel fuel additives or blendstock, dyes and chemical markers and interviewing employees.
(vii)
Any employee of the foreign refiner must be made available for interview by the EPA inspector or auditor, on request, within a reasonable time period.
(viii)
English language translations of any documents must be provided to an EPA inspector or auditor, on request, within 10 working days.
(ix)
English language interpreters must be provided to accompany EPA inspectors and auditors, on request.
(2)
An agent for service of process located in the District of Columbia shall be named, and service on this agent constitutes service on the foreign refiner or any employee of the foreign refiner for any action by EPA or otherwise by the United States related to the requirements of this subpart.
(3)
The forum for any civil or criminal enforcement action related to the provisions of this section for violations of the Clean Air Act or regulations promulgated thereunder shall be governed by the Clean Air Act, including the EPA administrative forum where allowed under the Clean Air Act.
(4)
United States substantive and procedural laws shall apply to any civil or criminal enforcement action against the foreign refiner or any employee of the foreign refiner related to the provisions of this section.
(5)
Submitting a petition for participation in the diesel foreign refiner program or producing and exporting diesel fuel or heating oil under any such program, and all other actions to comply with the requirements of this subpart relating to participation in any diesel foreign refiner program, or to establish an individual refinery motor vehicle diesel fuel volume baseline or other baseline under subpart I of this part (if applicable) constitute actions or activities that satisfy the provisions of 28 U.S.C. 1605(a)(2), but solely with respect to actions instituted against the foreign refiner, its agents and employees in any court or other tribunal in the United States for conduct that violates the requirements applicable to the foreign refiner under this subpart, including conduct that violates the False Statements Accountability Act of 1996 (18 U.S.C. 1001) and section 113(c)(2) of the Clean Air Act (42 U.S.C. 7413 ).
(6)
The foreign refiner, or its agents or employees, will not seek to detain or to impose civil or criminal remedies against EPA inspectors or auditors, whether EPA employees or EPA contractors, for actions performed within the scope of EPA employment related to the provisions of this section.
(7)
The commitment required by this paragraph (i) shall be signed by the owner or president of the foreign refiner business.
(8)
In any case where DFR-Diesel produced at a foreign refinery is stored or transported by another company between the refinery and the vessel that transports the DFR-Diesel to the United States, the foreign refiner shall obtain from each such other company a commitment that meets the requirements specified in paragraphs (i)(1) through (7) of this section, and these commitments shall be included in the foreign refiner's petition to participate in any diesel foreign refiner program .
(j) Sovereign immunity.
By submitting a petition for participation in any diesel foreign refiner program under this subpart (and baseline, if applicable) under this section, or by producing and exporting diesel fuel to the United States under any such program, the foreign refiner, and its agents and employees, without exception, become subject to the full operation of the administrative and judicial enforcement powers and provisions of the United States without limitation based on sovereign immunity, with respect to actions instituted against the foreign refiner, its agents and employees in any court or other tribunal in the United States for conduct that violates the requirements applicable to the foreign refiner under this subpart including conduct that violates the False Statements Accountability Act of 1996 (18 U.S.C. 1001) and section 113(c)(2) of the Clean Air Act (42 U.S.C. 7413 ).
(k) Bond posting.
Any foreign refiner shall meet the requirements of this paragraph (k) as a condition to approval for any diesel foreign refiner program under this subpart.
Bond = G × $ 0.01
Where:
Bond = amount of the bond in U.S. dollars
G = the applicable volume baseline under Subpart I for diesel fuel or distillate produced at the foreign refinery and exported to the United States, in gallons.
(ii)
Obtaining a bond in the proper amount from a third party surety agent that is payable to satisfy United States administrative or judicial judgments against the foreign refiner, provided EPA agrees in advance as to the third party and the nature of the surety agreement; or
(iii)
An alternative commitment that results in assets of an appropriate liquidity and value being readily available to the United States, provided EPA agrees in advance as to the alternative commitment.
(i)
Be used to satisfy any judicial judgment that results from an administrative or judicial enforcement action for conduct in violation of this subpart, including where such conduct violates the False Statements Accountability Act of 1996 (18 U.S.C. 1001) and section 113(c)(2) of the Clean Air Act (42 U.S.C. 7413 );
(ii)
Be provided by a corporate surety that is listed in the United States Department of Treasury Circular 570 “Companies Holding Certificates of Authority as Acceptable Sureties on Federal Bonds;” and
(iii)
Include a commitment that the bond will remain in effect for at least five years following the end of latest annual reporting period that the foreign refiner produces diesel fuel pursuant to the requirements of this subpart.
(4)
On any occasion a foreign refiner bond is used to satisfy any judgment, the foreign refiner shall increase the bond to cover the amount used within 90 days of the date the bond is used.
(5)
If the bond amount for a foreign refiner increases, the foreign refiner shall increase the bond to cover the shortfall within 90 days of the date the bond amount changes. If the bond amount decreases, the foreign refiner may reduce the amount of the bond beginning 90 days after the date the bond amount changes.
(m) English language reports.
Any report or other document submitted to EPA by a foreign refiner shall be in English language, or shall include an English language translation.
(n) Prohibitions.
(1)
No person may combine Certified DFR-Diesel with any Non-Certified DFR-Diesel or Non-DFR-Diesel, and no person may combine Certified DFR-Diesel with any Certified DFR-Diesel produced at a different refinery, until the importer has met all the requirements of paragraph (o) of this section, except as provided in paragraph (e) of this section. No person may violate the product segregation requirements of § 80.511.
(2)
No foreign refiner or other person may cause another person to commit an action prohibited in paragraph (n)(1) of this section, or that otherwise violates the requirements of this section.
(o) United States importer requirements.
Any United States importer shall meet the following requirements:
(1)
Each batch of imported diesel fuel and heating oil shall be classified by the importer as being DFR-Diesel or as Non-DFR-Diesel, and each batch classified as DFR-Diesel shall be further classified as Certified DFR-Diesel or as Non-Certified DFR-Diesel, and each batch of Certified DFR-Diesel shall be further designated pursuant to the designation requirements of § 80.598 and this section.
(2)
Diesel fuel shall be classified as Certified DFR-Diesel or as Non-Certified DFR-Diesel according to the designation by the foreign refiner if this designation is supported by product transfer documents prepared by the foreign refiner as required in paragraph (d) of this section, unless the diesel fuel is classified as Non-Certified DFR-Diesel under paragraph (g) of this section. Additionally, the importer shall comply with all requirements of this subpart applicable to importers.
(3)
For each diesel fuel batch classified as DFR-Diesel, any United States importer shall perform the following procedures.
(B)
Use the foreign refiner's DFR-Diesel certification to determine the name and EPA-assigned registration number of the foreign refinery that produced the DFR-Diesel;
(C)
Determine the name and country of registration of the vessel used to transport the DFR-Diesel to the United States; and
(A)
Collect a representative sample from each vessel compartment subsequent to the vessel's arrival at the United States port of entry and prior to off loading any diesel fuel from the vessel;
(C)
Determine the sulfur content value, and if applicable, the marker content, of each compartment sample using an appropriate methodology as specified in §§ 80.580 through 80.586 by the third party analyzing the sample or by the third party observing the importer analyze the sample.
(4)
Any importer shall submit reports within 30 days following the date any vessel transporting DFR-Diesel arrives at the United States port of entry:
(i)
To the Administrator containing the information determined under paragraph (o)(3) of this section; and
(ii)
To the foreign refiner containing the information determined under paragraph (o)(3)(ii) of this section, and including identification of the port and Credit Trading Area at which the product was offloaded.
(5)
Any United States importer shall meet the requirements specified in §§ 80.510 and 80.520 and all other requirements of this subpart, for any imported diesel fuel or heating oil that is not classified as Certified DFR-Diesel under paragraph (o)(2) of this section.
(p) Truck imports of Certified DFR-Diesel produced at a foreign refinery.
(1)
Any refiner whose Certified DFR-Diesel is transported into the United States by truck may petition EPA to use alternative procedures to meet the following requirements: