PR Notic* 87-7. Notice to Producers, "ornmlators and
Registrants of Pesticides
(U.S.J Environmental Protection Agency, Washington, DC
U.S. DEPAHTlfiEJfT OF COMMERCE
Hatioaal Tec&mca* inforroaliofi Smm

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UNITfn STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
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PR Notice 87-7
NOTICE TO PRODUCEHS, FOflHULATCfiS AND REGISTRANTS OF PESTICIDES
ATTS/riCM Persons Responsible for Contracting for Pesticide Fornulation
SUBJECT: PESTICIDE CONTRACT manufacturing
The Environmental Protection Agency is revising its policy with
respect to the required registration of pesticides supplied under contract
Generally, pesticides supplied under contract (even to a ri^le foBRula&ci)
must be registered with the Aqency before being transferred. A  D-day
grace period Cor applying for registrator is provided for producers
having existing contracts as of July 31# 19S7.
As ot August 1, i9
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II, WV THE PSLTCY IS BEING Q1AHGED
The result of these policies has been to encourage the use of
contractual arrangements to produce and distribute pesticides that are
never registered, particularly technical grade pesticides. The Agency
has found that t} contract manufacture ewrpticfl increasinjly is prcwing
an InpedLment t an effective and efficient regulatory program, resulting
in less than adequate raqui.ntion ami environmental protection.
Accordingly, the Agency has decid-xl that it can no longer sanction
the distribution oE unr-^jiatecod pesticides under these contractual
arrang-Tr^fit^. The practice af contract manufacturing to produce unregistered
pes tic ld. permits a larr- vottsne of pesticides to be transferred without
the regulatory oversight t >nt-jrrplated by FIFRA. EPA has encountered
a rmfser of ~i%t ficuities -i^h the contract runu factor tip eaacption schemet
1.	^ producer uind^r contract has the opportunity to evade the "sole
source" 1 imitation. A producer is not Itonited in the number or type of
contracts It may accept to produce a pesticide. A ctrnparty may undertake
a nunfcer of contracts to prod-ice what is 
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technical pesticide. EPA must assiETte that this is dus to the fact that
all technical material la being produced under the contract naanufacturing
exemption,
4* Non-registration of pesticides undoKninea the efforts of producers
who register their products to ccmply with the Act* and creates inequities
that translate into ecorcraic advantages- For exanple, producers who
register their pesticides are subject to re^fuir^nents for developing
data or compensating for the use of data developed by others. These
registration costs are absorbed into and retyped in the sales price of
the pesticide. The producer of a pesticide who is not compelled to
register his product bc-ause of the contract manufacturing exonptton
escapes these costs, and rosy produce the pesticide more cheaply for
contracting foemulators.
5. EPA can regelate such products only indirectly by regulation of
the final products containing the pesticide, an inefficient and ti*ne~
censtsning process that affords less assurance of environmental protection.
Ill* REVISIONS TO PQLIOf
A* As an immediate step, EPA has revoked its Compliance Policy
3,6 permitting "sole source* transfer of pesticides. The effect wri be
that# in accordance with the definition in S 162.3(dd)r transfer of
pesticides under contract will be permitted without registration only if
the transferor possesses a registration for the final product.
0. In a final rule concerning registration procedures, EPA will
prtj/lde an exempt ion permitting the transfer of constituents or interred iat(
foras of a registered pesticide if all source pesticides are also registerec
The Agancy is presiding this exetnption in this notice, and expects to
promulgate its final rule by the erri of Aujust, 1^87, with an effective
date in April ur May of 1983.
IV. EffSCT OP POLICY CHANGE WD S*POBCDgHT DMSS
The effect of this policy change is to require the registration of
pesticides now being produced and transferred under the contract raanufac-
turing exemption* In the future, existence of a contract will no longer
be considered euffldent to peoatt legal transfer of unregistered pesticide)
oxcept as described oelcw.
A- --ransfer of registered pesticide products under contract is not
affected by thio notice. All su* transfers are-legal and nay contfnua.
B. Transfer of unregistered pesticide products under attracts in
existence as of July 31, 1987. Unregistered pesticides transferred
under such contracts rnay continue to be transferred provided that the
producer/transferor obtain or applies for registration by Sept&nber 30,
1997, Producers lis transfer unregistered pesticides will be expected

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to demons crate that a contract was entered into before August 1, 1987, and
that it has not been renewed in the interim.
C. Transfer of .unregistered pesticide under contracts entered into
after July 31 f 19ft? Transfer of unregistered pesticides under such
contracts will Co acceptable only if the transferred pesticide is registered,
or the producer of the transferred pesticide is the registrant of the
final product that is registered. Transfer of unregistered pesticides
under such contracts will be consid?r>xJ ro te in vio!illon of FIFTtA sec.
12(a}(l)(AL Sutf* pesticides nay be subject to Stcp Sa'e, Use ^r Rerx^al
Orders uncter FIF?A sec 13.
V. E3Wfl*LE5
Scne examples of acceptable and unacceptable transfers of pesticides
as of October 1, 1987, are given below*
1.	Company A is the producer of a pesticide, which is used solely
for further formulation into its own registered erd use product by an
integrated system in its own establishment- Company A is not required
to register its pusticide, since no transfer of unregistered pesticide
occurs. *
2.	Ccmparry A is the producer of a pesticide. Ccmpany A may legally
trar_5fer the unregistered pesticide to another establiyhment owned by A*
or to Company B under contract to produce A's registered end use product.
C npany A is the transferor of the pesticide, and possesses a registration
for the end use product. Caipany a is therefore considered to be "operated
by ^Jhe same pro^'jeer" as Ccmpany A, arid Conpahy A is not required to
register the pesticide before transfer.
3.	Company a is the registrant of an end use product. Corpany A
may contract with Ccnpany B to produce an unregistered pesticider formulate
hat pesticide into Company A's registered erd u^e product, package and
label the material Cor Ccrap&ny A, ail at Conpany B's establishsienr.
Caapany B stay not legally transfer the pesticide to any other Company,
including Gonpany A, at any stage of production except in its final
registered end use foem, *hich includes packaging and labeling.
4.	Coopany A is the registrant of an end use product. Ctrpany A
contracts with Cotpany B to acquire a pesticide and focsulate its erd use
prodoct. Company 8 my purchase registered pesticide freri Company C for
this purpose. If Ccntpan^ C's product is unregistered, hewever, COnpany C
may not legally transfer the unregistered pesticide to Conpany B.

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5* Confkiny A Is the registrant oC an end use product* Canpany A
contracts with Conpany B to acquire a pesticide and foonulate its end
use product. As long as Conpany b purchases a registered pesticide for
this purpose* all intermediate transfers between Company B and Ccmpariies
0, E and F for f<-> emulation, packaging or labeling are legal. In this
case, all pesticide constituents are acquired from registered sources,
and the err! use product is registered.
6. Conpany A is the producer of an unregistered oesticid*. Company
A ~a/ not transfer that pesticide to Company 3 for formulation .nto
Ccrpany B's registered end use product. Likewise, Conpany A My not
transfer the pes Hr* I Hp to C-awpany c -Jhich ia under conUsut be, Ccntpany 3.
VI. FTP FUKTHER ISFCR.VA7I0N
Information on the genoral requirements of this notice may be
obtained Crara Jean M- Franc, Registration Division, at 703-557-0944,
or John J. Neylan MI, Office of Compliance Monitoring, at i/>2-3S2-782*.
Infornation on procedures for registration of ourrantly uni mistered
pesticides may be obtained frera Product Managers In the Registration
Division, EPA.	1
Edwin F* Tiiwrorth
Director, Registration Division
Office of Pesticide Programs

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