70754 Federal Register / Vol. 69, No. 234 / Tuesday, December 7, 2004 / Proposed Rules 

DEPARTMENT OF COMMERCE

Bureau of Industry and Security 

15 CFR Parts 710, 711, 712, 713, 714, 

715, 716, 717, 718, 719, 720, 721, 722, 

723, 724, 725, 726, 727, 728 and 729

[Docket No. 990611158–4077–03] 

RIN 0694–AB06

Chemical Weapons Convention 

Regulations

AGENCY: Bureau of Industry and 

Security, Commerce.

ACTION: Proposed rule and request for 

comments. 

SUMMARY: On April 25, 1997, the United 

States ratified the Convention on the 

Prohibition of the Development, 

Production, Stockpiling and Use of 

Chemical Weapons and on Their 

Destruction, also known as the 

Chemical Weapons Convention (CWC or 

Convention). The Bureau of Industry 

and Security (BIS) published an interim 

rule, on December 30, 1999, that 

established the Chemical Weapons 

Convention Regulations (CWCR) to 

implement the provisions of the CWC 

affecting U.S. industry and other U.S. 

persons. The CWCR include 

requirements to report certain activities, 

involving scheduled chemicals and 

unscheduled discrete organic chemicals, 

and to provide access for on-site 

verification by international inspectors 

of certain facilities and locations in the 

United States. This proposed rule 

revises the CWCR by updating them to 

include additional requirements 

identified in the implementation of the 

CWC and to clarify other CWC 

requirements.

DATES: Comments on this rule must be 

received January 6, 2005.

ADDRESSES: You may submit comments, 

identified by RIN 0694–AB06, by any of 

the following methods: 

• Federal eRulemaking Portal: http://

www.regulations.gov. Follow the 

instructions for submitting comments. 

• E-mail: wfisher@bis.doc.gov. 

Include ‘‘RIN 0694–AB06’’ in the 

subject line of the message. 

• Fax: (202) 482–3355. Please alert 

the Regulatory Policy Division, by 

calling (202) 482–2440, if you are faxing 

comments. 

• Mail or Hand Delivery/Courier: 

Willard Fisher, U.S. Department of 

Commerce, Bureau of Industry and 

Security, Regulatory Policy Division, 

14th Street & Pennsylvania Avenue, 

NW., Room 2705, Washington, DC 

20230, ATTN: RIN 0694–AB06.

FOR FURTHER INFORMATION CONTACT: For 

questions of a general or regulatory 

nature, contact the Regulatory Policy 

Division, telephone: (202) 482–2440. 

For program information on 

declarations, reports, advance 

notifications, chemical determinations, 

recordkeeping, inspections and facility 

agreements, contact the Treaty 

Compliance Division, Office of 

Nonproliferation and Treaty 

Compliance, telephone: (703) 605–4400; 

for legal questions, contact Rochelle 

Woodard, Office of the Chief Counsel 

for Industry and Security, telephone: 

(202) 482–5301.

SUPPLEMENTARY INFORMATION: 

Background 

I. Summary of CWCR Changes 

Contained in This Proposed Rule 

On April 25, 1997, the United States 

ratified the Convention on the 

Development, Production, Stockpiling 

and Use of Chemical Weapons and on 

Their Destruction, also known as the 

Chemical Weapons Convention (CWC or 

Convention). The CWC, which entered 

into force on April 29, 1997, is an arms 

control treaty with significant nonproliferation aspects. As such, the CWC 

bans the development, production, 

stockpiling or use of chemical weapons 

and prohibits States Parties to the CWC 

from assisting or encouraging anyone to 

engage in a prohibited activity. The 

CWC provides for declaration and 

inspection of all States Parties’ chemical 

weapons and chemical weapon 

production facilities, and oversees the 

destruction of such weapons and 

facilities. To fulfill its arms control and 

non-proliferation objectives, the CWC 

also establishes a comprehensive 

verification scheme and requires the 

declaration and inspection of facilities 

that produce, process or consume 

certain ‘‘scheduled’’ chemicals and 

unscheduled discrete organic chemicals, 

many of which have significant 

commercial applications. The CWC also 

requires States Parties to report exports 

and imports and to impose export and 

import restrictions on certain chemicals. 

These requirements apply to all entities 

under the jurisdiction and control of 

States Parties, including commercial 

entities and individuals. States Parties 

to the CWC, including the United States, 

have agreed to this verification scheme 

in order to provide transparency and to 

ensure that no State Party to the CWC 

is engaging in prohibited activities. 

The Chemical Weapons Convention 

Implementation Act of 1998 (the Act or 

CWCIA) (22 U.S.C. 6701 et seq.), 

enacted on October 21, 1998, authorizes 

the United States to require the U.S. 

chemical industry and other private 

entities to submit declarations, 

notifications and other reports and also 

to provide access for on-site inspections 

conducted by inspectors sent by the 

Organization for the Prohibition of 

Chemical Weapons. Executive Order 

(E.O.) 13128 delegates authority to the 

Department of Commerce to promulgate 

regulations, obtain and execute 

warrants, provide assistance to certain 

facilities, and carry out appropriate 

functions to implement the CWC, 

consistent with the Act. The Department 

of Commerce implements CWC import 

restrictions under the authority of the 

International Emergency Economic 

Powers Act, the National Emergencies 

Act, and E.O. 12938, as amended by 

E.O. 13128. The Departments of State 

and Commerce have implemented the 

CWC export restrictions under their 

respective export control authorities. 

E.O. 13128 designates the Department of 

State as the United States National 

Authority (USNA) for purposes of the 

CWC and the Act. 

On December 30, 1999, the Bureau of 

Industry and Security (BIS), U.S. 

Department of Commerce, published an 

interim rule that established the 

Chemical Weapons Convention 

Regulations (CWCR) (15 CFR Parts 710–

722). The CWCR implemented the 

provisions of the CWC, affecting U.S. 

industry and U.S. persons, in 

accordance with the provisions of the 

Act. This proposed rule revises the 

CWCR by updating them to include 

additional requirements identified 

necessary for the implementation of the 

CWC provisions and to clarify other 

CWC requirements. 

Specifically, this rule proposes to 

make the following revisions to the 

CWCR: 

A. Proposed Revisions to Section 710.1 

of the CWCR (Definitions of Terms Used 

in the CWCR) 

This proposed rule revises § 710.1 of 

the CWCR by amending the definition of 

‘‘domestic transfer’’ to clarify that the 

term, as applied to the declaration 

requirements for Schedule 2 or 

Schedule 3 chemicals under the CWCR, 

means the movement of a Schedule 2 or 

Schedule 3 chemical, in quantities and 

concentrations greater than the specified 

thresholds in the convention, outside 

the geographical boundary of a facility 

in the United States to another 

destination in the United States, for any 

purpose.

This proposed rule adds a definition 

for the term ‘‘intermediate’’ to § 710.1 of 

the CWCR in order to clarify the use of 

that term in § 712.5(c) and Supplement 

No. 2 to part 715 of the CWCR. Section 

Federal Register / Vol. 69, No. 234 / Tuesday, December 7, 2004 / Proposed Rules 70755

710.1 of the CWCR would define 

‘‘intermediate’’ as ‘‘a chemical formed 

through chemical reaction that is 

subsequently reacted to form another 

chemical.’’ The term ‘‘intermediate’’

also clarifies its use in §§ 712.5(d), 

713.2(a)(2)(ii) and 714.1(a)(2)(ii), 

whereby Schedule 1, Schedule 2 and 

Schedule 3 chemicals that are 

intermediates, but not transient 

intermediates, must be considered when 

determining if a chemical is subject to 

declaration. Lastly, Supplement No. 2 to 

part 715 of the CWCR, which provides 

examples of unscheduled discrete 

organic chemicals (UDOCs) and UDOC 

production, indicates that intermediate 

UDOCs used in a single or multi-step 

process to produce another declared 

UDOC are not subject to declaration 

requirements under the CWCR. 

In addition, this proposed rule adds a 

definition of the term ‘‘advance 

notification’’ to § 710.1 of the CWCR to 

clarify the use of that term in part 712 

of the CWCR. Section 710.1 of the 

CWCR would define ‘‘advance 

notification’’ to mean ‘‘a notice 

informing BIS of a company’s intention 

to export to or import from a State Party 

a Schedule 1 chemical.’’ Advance 

notifications must be submitted to BIS 

at least 45 days prior to the proposed 

export or import, except for exports or 

imports of saxitoxin for medical/

diagnostic purposes which may be 

submitted to BIS at least 3 days prior to 

export or import. The definition 

proposed by this rule also indicates that 

this notification requirement is in 

addition to any export license 

requirement under the Export 

Administration Regulations (EAR) (15 

CFR Parts 730–799) or the International 

Traffic in Arms Regulations (ITAR) (22 

CFR Parts 120–130), or import license 

requirement under the Alcohol, 

Tobacco, Firearms and Explosives 

Regulations (27 CFR part 447). 

The definition of the term 

‘‘production’’ in § 710.1 of the CWCR is 

revised by adding certain notes that 

incorporate decisions by the 

Organization for the Prohibition of 

Chemical Weapons’ Conference of the 

States Parties (OPCW/CSP) regarding 

the production of Schedule 1, 2, and 3 

chemicals. The first note would clarify 

that the production of Schedule 1 

chemicals includes ‘‘formation through 

chemical synthesis as well as processing 

to extract and isolate Schedule 1 

chemicals.’’ The second note would 

clarify that the ‘‘production’’ of a 

Schedule 2 or Schedule 3 chemical 

‘‘means all steps in the production of a 

chemical in any units within the same 

plant through chemical reaction, 

including any associated processes (e.g., 

purification, separation, extraction, 

distillation, or refining) in which the 

chemical is not converted into another 

chemical. The exact nature of any 

associated process (e.g., purification, 

etc.) is not required to be declared.’’

This proposed rule adds a definition 

of the term ‘‘production by synthesis’’ in 

§ 710.1 of the CWCR to clarify the use 

of the term in § 715.1 of the CWCR (i.e., 

declaration of production by synthesis 

of UDOCs for purposes not prohibited 

by the CWC) and Supplement No. 2 to 

part 715 of the CWCR (i.e., examples of 

activities that are not considered to be 

production by synthesis under part 715 

of the CWCR). Section 710.1 of the 

CWCR would define ‘‘production by 

synthesis’’ to mean ‘‘production of a 

chemical that is isolated for use or sale.’’

Finally, this proposed rule amends 

§ 710.1 of the CWCR by adding a 

definition of the term ‘‘transient 

intermediate’’ in order to clarify the 

scope of the declaration requirements 

that apply to the production of certain 

scheduled chemicals. Section 710.1 of 

the CWCR would define the term 

‘‘transient intermediate’’ to mean ‘‘any 

chemical that is produced in a chemical 

process, but that only exists for a very 

short period of time and cannot be 

isolated, even by modifying or 

dismantling the plant, altering the 

chemical production process operating 

conditions, or stopping the chemical 

production process altogether.’’

B. Proposed Amendments to Section 

710.2 of the CWCR (Scope of the CWCR) 

This proposed rule amends § 710.2(a) 

of the CWCR by removing the phrase 

‘‘The CWCR declaration, reporting, and 

inspection requirements apply ....’’

from that paragraph. Removal of this 

phrase will clarify which persons and 

facilities are generally subject to the 

provisions of the CWCR. 

C. Proposed Amendments to Section 

710.6 of the CWCR (Relationship 

Between the CWCR and the Export 

Administration Regulations) 

This proposed rule amends § 710.6 of 

the CWCR to include a reference to 

Export Control Classification Number 

(ECCN) 1C395 on the Commerce Control 

List (CCL), which is in Supplement No. 

1 to part 774 of the EAR. ECCN 1C395 

controls the following items: (i) 

Mixtures that contain more than 10 

percent, but less than 30 percent, by 

weight of any single CWC Schedule 2 

chemical identified in ECCN 1C350.b; 

and (ii) certain medical, analytical, 

diagnostic and food testing kits that 

contain CWC Schedule 2 or Schedule 3 

chemicals controlled by ECCN 1C350.b 

or .c, respectively, in an amount not 

exceeding 300 grams per chemical. 

D. Proposed Amendments to 

Supplement No. 1 to Part 710 of the 

CWCR (List of States Parties to the CWC) 

This proposed rule amends 

Supplement No. 1 to part 710 of the 

CWCR (States Parties to the Convention 

on The Prohibition of The Development, 

Production, Stockpiling, and Use of 

Chemical Weapons and on Their 

Destruction) by updating the list of 

States Parties to include the following 

recent additions: Afghanistan, Andorra, 

Azerbaijan, Cape Verde, Chad, 

Colombia, Dominica, Eritrea, Gabon, 

Guatemala, Jamaica, Kazakhstan, 

Kiribati, Kyrgyzstan, Malaysia, Marshall 

Islands, Micronesia (Federated States 

of), Mozambique, Nauru, Palau, 

Rwanda, Saint Kitts and Nevis, Saint 

Vincent and the Grenadines, Samoa, 

San Marino, Sao Tome and Principe, 

Thailand, Timor Leste, Tonga, Uganda, 

United Arab Emirates, Yemen, and 

Zambia. As of June 20, 2004, 164 

countries had become States Parties to 

the CWC. 

E. Proposed Amendments to Part 711 of 

the CWCR (General Information 

Regarding Declaration, Reporting and 

Advance Notification Requirements) 

This proposed rule adds a new § 711.3 

that establishes BIS’s authority to 

contact any company to determine 

whether it is in compliance with the 

CWCR. Information requested may 

relate to the production, processing, 

consumption, export, import, or other 

activities involving scheduled 

chemicals and UDOCs described in 

Parts 712 through 715 of this 

subchapter. Any person or facility 

subject to the CWCR and receiving such 

a request for information will be 

required to provide a response to BIS 

within the time-frame specified in the 

request. However, this requirement does 

not, in itself, impose a requirement to 

create new records or maintain existing 

records. 

This proposed rule amends § 711.3 of 

the CWCR by moving it to § 711.4 and 

specifying a time period within which 

the BIS will respond to chemical 

determination requests. BIS will 

respond, in writing, to a chemical 

determination request within 10 

working days of receipt of the request. 

This proposed rule removes the 

declaration and reporting requirements 

in § 711.4 of the CWCR concerning 

activities that occurred prior to 

December 30, 1999, since these 

requirements should already have been 

satisfied. A new § 711.7 is proposed to 

provide information on where to submit 

70756 Federal Register / Vol. 69, No. 234 / Tuesday, December 7, 2004 / Proposed Rules 

declarations, advance notifications, and 

reports. 

New § 711.8 is added with 

instructions for applying for 

authorization to submit electronic 

declarations and reports in order to 

fulfill requirements under the 

Government Paperwork Elimination Act 

(44 U.S.C. 3504). 

F. Proposed Amendments to Part 712 of 

the CWCR (Activities Involving 

Schedule 1 Chemicals) 

This proposed rule adds a new 

§ 712.2(a) that prohibits production of 

Schedule 1 chemicals for protective 

purposes.

This proposed rule clarifies that 

initial declarations submitted in 

February 2000 remain valid until they 

are either amended or rescinded. If you 

plan to alter the technical layout of your 

declared facility, you must submit an 

amended declaration to BIS at least 200 

calendar days prior to making any such 

change to your facility. 

This proposed rule revises § 712.3 of 

the CWCR by moving the annual 

declaration requirements for Schedule 1 

facilities to new § 712.5. 

This proposed rule amends § 712.4 of 

the CWCR to clarify the declaration 

requirements that apply to the 

establishment of new Schedule 1 

chemical production facilities. If a 

Schedule 1 chemical production facility 

has never been declared in a previous 

calendar year or its initial declaration 

has been withdrawn in accordance with 

the requirements of amended § 712.5(f) 

of this proposed rule, you must submit 

an initial declaration (including a 

current detailed technical description of 

the facility) to BIS at least 200 calendar 

days prior to commencing production of 

Schedule 1 chemicals at the facility in 

quantities greater than 100 grams 

aggregate per year. Such facilities are 

considered to be ‘‘new Schedule 1 

chemical production facilities’’ and are 

subject to an initial inspection within 

200 calendar days of the submission of 

the initial declaration to BIS. 

This proposed rule revises the 

remainder of part 712 of the CWCR, as 

follows: (1) Advance notification and 

annual report requirements for Schedule 

1 chemical exports and imports are 

proposed to be moved from § 712.5 of 

the CWCR to § 712.6; (2) provisions for 

Table 1 to § 712.6 of the CWCR are 

proposed to be moved to new 

Supplement No. 2 to part 712 of the 

CWCR; (3) procedures concerning 

declarations and reports returned 

without action by BIS are proposed to 

be described in new § 712.8 of the 

CWCR; and (4) the due date for Annual 

Declarations for Anticipated Activities 

is changed from August 3 to September 

3 thereby giving Schedule 1 facilities an 

additional 30 days in which to complete 

and submit their declarations. 

This proposed rule amends the CWCR 

provisions that require advance 

notification of exports and imports of 

Schedule 1 chemicals by establishing an 

exception to the requirement that BIS 

must be notified at least 45 calendar 

days prior to the export or import of a 

Schedule 1 chemical to or from another 

State Party. Advance notification of the 

export or import of 5 milligrams or less 

of Saxitoxin–B (7), which is listed in 

Supplement No. 1 to part 712 of the 

CWCR, for medical or diagnostic 

purposes only, would have to be 

submitted to BIS at least 3 calendar days 

(rather than 45 calendar days) prior to 

the date of export or import. 

This proposed rule amends the CWCR 

provisions concerning requirements for 

amending Schedule 1 declarations and 

reports. Section 712.7 of the CWCR is 

proposed to be amended by clarifying 

and specifying deadlines for: (i) The 

types of changes to information on 

Schedule 1 chemicals and activities in 

the Annual Declaration of Past 

Activities that would require 

submission of an amended declaration 

to BIS; (ii) the types of changes to export 

or import information in the Annual 

Reports on Exports and Imports from 

undeclared facilities, trading companies 

and U.S. persons that would require 

submission of an amended report to BIS; 

and (iii) the types of changes to 

Schedule 1 chemical facility 

information (e.g., change in company 

name, address, declaration point of 

contact, ownership) that would require 

submission of an amended declaration 

or report to BIS. In addition, this 

proposed rule adds a new § 712.7(d) to 

the CWCR that will provide guidance 

concerning the submission of 

inspection-related amendments. 

Amended declarations, based on the 

final inspection report, would have to 

be submitted to BIS within 45 calendar 

days of the date of BIS’s post inspection 

letter. 

This proposed rule adds a new § 712.8 

to the CWCR that provides guidance 

concerning certain Schedule 1 

declarations and reports that are 

returned without action. In these cases, 

BIS would return without action (RWA) 

any Schedule 1 declarations or reports 

that are determined to be not required 

by the CWCR. The returned declaration 

or report would be accompanied by a 

cover letter explaining why the 

declaration or report is being returned 

without action. BIS would retain a copy 

of the RWA letter, but would not 

maintain copies of any declarations or 

reports that were returned without 

action. 

Finally, the provisions in § 712.6 and 

Table 1 to § 712.6 of the CWCR, which 

contain information on the deadlines for 

submitting Schedule 1 declarations, 

reports, advance notifications and 

amendments to BIS, are updated and 

moved to § 712.9 and Supplement No. 2 

to part 712 of the CWCR, respectively. 

G. Proposed Amendments to Part 713 of 

the CWCR (Activities Involving 

Schedule 2 Chemicals) 

This proposed rule adds a prohibition 

against exports of Schedule 2 chemicals 

to States not Party to the CWC in 

§ 713.1(a). Currently, the CWCR prohibit 

imports of Schedule 2 chemicals from 

States not Party to the CWC, but do not 

prohibit Schedule 2 chemical exports to 

such countries. However, note that 

§ 742.18 of the EAR currently requires a 

license for exports of Schedule 2 

chemicals to States not Party to the 

CWC and BIS applies a general policy 

of denial to license applications for such 

exports. A license is also required for 

export of Schedule 2 chemicals 

controlled under the ITAR. 

This proposed rule revises § 713.1(b), 

which exempts certain mixtures 

containing Schedule 2 chemicals from 

the export and import prohibitions 

contained in § 713.1(a) of the CWCR, as 

proposed by this rule. Currently, 

§ 713.1(b) of the CWCR exempts 

mixtures containing 10 percent or less, 

by weight, of any single Schedule 2 

chemical. This rule revises § 713.1(b) of 

the CWCR to exempt the following 

mixtures: (i) Mixtures containing 1 

percent or less, by weight, of any single 

Schedule 2A or 2A* chemical;

(ii) mixtures containing 10 percent or 

less, by weight, of any single Schedule 

2B chemical; and (iii) products 

identified as consumer goods packaged 

for retail sale for personal use or 

packaged for individual use. However, 

note that the consumer goods exemption 

for mixtures that contain Schedule 2 

chemicals identified under ECCN 1C350 

on the CCL (Supplement No. 1 to part 

774 of the EAR) applies only to products 

identified as consumer goods not 

packaged for retail sale for personal use 

and not to products packaged for 

individual use (the latter are exempt 

only by the CWCR and not by the 

Australia Group controls under the 

EAR).

In addition, this proposed rule: (i) 

Removes the provisions concerning 

declarations on past production of 

Schedule 2 chemicals for chemical 

weapons purposes (currently found in 

§ 713.2 of the CWCR); (ii) removes the 

provisions currently found in 

Federal Register / Vol. 69, No. 234 / Tuesday, December 7, 2004 / Proposed Rules 70757

§§ 713.3(a)(1)(i) and 713.4(c)(1) and (2) 

on Schedule 2 initial declarations and 

initial reports on exports and imports; 

(iii) amends the provisions providing 

guidance concerning amendments to 

declarations and reports (currently 

found in § 713.7 of the CWCR); (iv) 

moves the provisions concerning the 

frequency and timing of declarations 

and reports (currently found in § 713.6 

of the CWCR) to § 713.7; and (v) 

provides a description of the procedures 

that BIS will follow concerning 

declarations and reports RWA’d in 

§ 713.6 of the CWCR. 

This proposed rule moves and revises 

§ 713.3 of the CWCR to § 713.2 to clarify 

the scope of Schedule 2 production 

activities to include any associated 

processing steps of the Schedule 2 

chemical and intermediates. Only 

transient intermediates are exempted. 

This will ensure that the CWCR 

requirements will apply to Schedule 2 

chemical production where Schedule 2 

chemicals are below the applicable 

concentration threshold when reacted, 

but subsequently are concentrated above 

the threshold during in-line processing. 

The provisions in § 713.6 and Table 1 

to § 713.6 of the CWCR, which contain 

information on the deadlines for 

submitting declarations, reports, 

advance notifications, and amendments 

to BIS, are proposed to be moved to 

§ 713.7 and Supplement No. 2 to part 

713 of the CWCR, respectively. In 

addition, the CWCR provisions on 

amended declarations and reports for 

Schedule 2 chemicals are proposed to 

be moved from § 713.7 of the CWCR to 

§ 713.5 and amended by clarifying and 

specifying deadlines for: (i) The types of 

changes to information on Schedule 2 

chemicals and activities in the Annual 

Declaration of Past Activities or the 

combined declaration and report that 

would require submission of an 

amended declaration to BIS; (ii) the 

types of changes to export or import 

information in the Annual Reports on 

Exports and Imports from undeclared 

facilities, trading companies and U.S. 

persons that would require submission 

of an amended report to BIS; and (iii) 

the types of changes to Schedule 2 

chemical facility information (e.g., 

change in company name, address, 

declaration point of contact, ownership) 

that would require submission of an 

amended declaration or report to BIS. In 

addition, this proposed rule moves and 

revises § 713.6(d) of the CWCR to 

§ 713.5(d) to provide guidance 

concerning the submission of 

inspection-related amendments. 

Amended declarations, based on the 

final inspection report, would have to 

be submitted to BIS within 45 calendar 

days of the date of BIS’s post inspection 

letter. 

This proposed rule adds § 713.6 of the 

CWCR to provide guidance concerning 

the return of certain Schedule 2 

declarations and reports without action. 

BIS would RWA any Schedule 2 

declarations or reports that are 

determined not required by the CWCR. 

The returned declaration or report 

would be accompanied by a cover letter 

explaining why the declaration or report 

is being returned without action. BIS 

would retain a copy of the RWA letter, 

but would not maintain copies of any 

declarations or reports that were 

returned without action. 

Finally, the provisions in § 713.6 and 

Table 1 to § 713.6 of the CWCR, which 

contain information on the deadlines for 

submitting Schedule 2 declarations, 

reports, and amendments to BIS, are 

updated and moved to § 713.7 and 

Supplement No. 2 to part 713 of the 

CWCR, respectively. 

H. Proposed Amendments to Part 714 of 

the CWCR (Activities Involving 

Schedule 3 Chemicals) 

This proposed rule amends part 714 

of the CWCR by removing certain 

provisions concerning the past 

production of Schedule 3 chemicals in 

§ 714.1. The requirements concerning 

when and how to amend declarations 

and reports for Schedule 3 chemicals, 

currently in § 714.6 of the CWCR, are 

proposed to be revised by this rule and 

moved to § 714.4. This rule also 

proposes to revise § 714.5 of the CWCR, 

which currently addresses the frequency 

and timing of Schedule 3 declarations, 

to describe the BIS procedures for 

returning declarations and reports 

without action. Section 714.5 is 

proposed to be moved to new § 714.6 

and revised to address deadlines for 

submitting Schedule 3 declarations, 

reports, and amendments. 

Section 714.2 of the CWCR, as 

proposed to be moved to new § 714.1 by 

this rule, will clarify the scope of 

Schedule 3 production activities, as 

defined by the CWCR, to include any 

associated processing steps of a 

Schedule 3 chemical and intermediates. 

Only transient intermediates are 

exempted. This will ensure that the 

CWCR requirements will apply to 

Schedule 3 chemical production where 

Schedule 3 chemicals are below the 

applicable concentration threshold 

when reacted, but subsequently are 

concentrated above the threshold during 

processing. 

In addition, this proposed rule moves 

and revises § 714.2 of the CWCR to 

§ 714.1 to clarify the procedures that 

must be followed when determining the 

range of Schedule 3 chemical 

production for your plant site during the 

previous calendar year. Specifically, 

this rule proposes to include a statement 

in § 714.1(c)(1) of the CWCR to indicate 

that you should not aggregate amounts 

of production from plants on your plant 

site that did not individually produce a 

Schedule 3 chemical in an amount 

exceeding the applicable declaration 

threshold (i.e., greater than 30 metric 

tons). In short, only the production 

amounts from those plants on your 

plant site that individually produced 

greater than 30 metric tons of a 

Schedule 3 chemical should be 

aggregated for the purpose of calculating 

the total amount of a Schedule 3 

chemical produced at your plant site 

during the previous calendar year. 

The CWCR provisions on amended 

declarations and reports for Schedule 3 

chemicals are proposed to be moved 

from § 714.6 of the CWCR to § 714.4 and 

amended by clarifying and specifying 

deadlines for: (i) The types of changes 

to information on Schedule 3 chemicals 

and activities in the Annual Declaration 

of Past Activities or the combined 

declaration and report that would 

require submission of an amended 

declaration to BIS; (ii) the types of 

changes to export or import information 

in the Annual Reports on Exports and 

Imports from undeclared facilities, 

trading companies and U.S. persons that 

would require submission of an 

amended report to BIS; and (iii) the 

types of changes to Schedule 3 chemical 

facility information (e.g., change in 

company name, address, declaration 

point of contact, ownership) that would 

require submission of an amended 

declaration or report to BIS. In addition, 

this proposed rule amends the CWCR to 

provide guidance in § 714.4(d) 

concerning the submission of 

inspection-related amendments. 

Amended declarations, based on the 

final inspection report, would have to 

be submitted to BIS within 45 calendar 

days of the date of BIS’s post inspection 

letter. 

This proposed rule revises adds 

§ 714.5 of the CWCR to provide 

guidance concerning the return of 

certain Schedule 3 declarations and 

reports without action. BIS would RWA 

any Schedule 3 declarations or reports 

that are determined not required by the 

CWCR. The returned declaration or 

report would be accompanied by a cover 

letter explaining why the declaration or 

report is being returned without action. 

BIS would retain a copy of the RWA 

letter, but would not maintain copies of 

any declarations or reports that were 

returned without action. 

70758 Federal Register / Vol. 69, No. 234 / Tuesday, December 7, 2004 / Proposed Rules 

Finally, the provisions in § 714.5 and 

Table 1 to § 714.5 of the CWCR, which 

contain information on the deadlines for 

submitting Schedule 3 declarations, 

reports, and amendments to BIS, are 

proposed to be updated and moved to 

§ 714.6 and Supplement No. 2 to part 

714 of the CWCR, respectively. 

I. Proposed Amendments to Part 715 of 

the CWCR (Activities Involving 

Unscheduled Discrete Organic 

Chemicals (UDOCs)) 

This proposed rule amends 

§ 715.1(a)(1)(ii) (which describes the 

annual declaration requirements for the 

production of UDOCs containing the 

elements phosphorus, sulfur or fluorine, 

referred to as ‘‘PSF-chemicals’’) to 

clarify how to calculate the production 

by synthesis of PSF chemicals at your 

plant site during the previous calendar 

year. Specifically, this proposed rule 

indicates that when determining the 

quantity of each PSF-chemical produced 

by a PSF plant on your plant site, you 

should only aggregate the PSF chemical 

production quantities from plants that 

individually produced a PSF chemical 

in an amount exceeding 30 metric tons. 

However, note that § 715.1(a)(1)(i) 

indicates that when determining UDOC 

production by synthesis on your plant 

site, you should aggregate all quantities 

of UDOCs and PSF-chemicals produced 

regardless of the amount of PSF 

chemicals produced (i.e., aggregate any 

PSF chemicals produced).

This proposed rule also revises 

§ 715.1(b)(1) of the CWCR by removing 

the initial declaration requirement and 

replacing it with the annual declaration 

requirement, and adding a new 

subsection that creates a new form 

called the ‘‘No Changes Authorization’’

form that may be submitted to BIS if 

there are no updates or changes to any 

information (other than the certifying 

official and dates signed and submitted) 

contained in the annual declaration on 

past activities previously submitted by 

your plant site. In addition, 

§ 715.1(b)(1)(ii) of the CWCR, as 

proposed by this rule, would include a 

statement indicating that your plant 

site’s UDOC activities would continue 

to be declared to the OPCW and that 

your plant site would remain subject to 

inspection (if applicable) based upon 

the data reported in your previous (i.e., 

most recent) annual declaration on past 

activities. 

The CWCR provisions on amended 

declarations for UDOCs are moved from 

§ 715.3 of the CWCR to § 715.2 and 

revised by clarifying and specifying 

deadlines for: (i) The types of changes 

to information on UDOCs and activities 

in the Annual Declaration of Past 

Activities that would require 

submission of an amended declaration 

to BIS; and (ii) the types of changes to 

UDOC plant information (e.g., change in 

company name, address, declaration 

point of contact, ownership) that would 

require submission of an amended 

declaration to BIS. In addition, this 

proposed rule amends the CWCR to 

provide guidance in § 715.2(c) 

concerning the submission of 

inspection-related amendments. 

Amended declarations, based on the 

final inspection report, would have to 

be submitted to BIS within 45 calendar 

days of the receipt of BIS’s post 

inspection letter. 

This proposed rule adds § 715.3 of the 

CWCR to provide guidance concerning 

the return of certain UDOC declarations 

without action. BIS would RWA any 

UDOC declarations that are determined 

not required by the CWCR. The returned 

declaration would be accompanied by a 

cover letter explaining why the 

declaration is being returned without 

action. BIS would retain a copy of the 

RWA letter, but would not maintain 

copies of any declarations that were 

returned without action. 

Finally, the provisions in the CWCR 

that currently contain information on 

the deadlines for submitting UDOC 

declarations and amendments to BIS 

(§ 715.2 and Table 1 to § 715.2), are 

proposed to be updated and moved to 

§ 715.4 and Supplement No. 3 to part 

715 of the CWCR, respectively. 

J. Proposed Amendments to Part 716 of 

the CWCR (Initial and Routine 

Inspections of Declared Facilities) 

As part of their obligation under the 

Convention, each State Party to the 

CWC is subject to inspection of its 

chemical facilities engaged in certain 

activities involving scheduled 

chemicals. Part 716 of the CWCR 

provides general information about the 

conduct of initial and routine 

inspections of declared facilities subject 

to inspection under CWC Verification 

Annex Part VI(E), Part VII(B), Part 

VIII(B), and Part IX(B). 

This proposed rule amends 

§ 716.2(a)(2)(i) of the CWCR to clarify 

that a facility agreement will be 

concluded by the U.S. National 

Authority (in coordination with BIS) 

with the OPCW before a new Schedule 

1 facility, declared pursuant to § 712.4 

of the CWCR, can produce above 

threshold. 

This proposed rule amends 

§ 716.4(b)(1) of the CWCR to clarify the 

scope of inspections by specifying that 

inspections under part 716 of the CWCR 

may include visual inspection of parts 

or areas of the plant site, in addition to 

the facilities or plants producing 

scheduled chemicals, in order to 

address any ambiguity that might arise 

during the inspection. In addition, 

photographs may be taken and formal 

interviews of facility personnel may be 

conducted. 

Section 716.4(b)(3) of the CWCR is 

amended to indicate that: (i) Technology 

subject to the ITAR shall not be 

divulged to the Inspection Team 

without U.S. Government authorization; 

and (ii) each facility that is inspected is 

responsible for identifying ITARcontrolled technology to the BIS Host 

Team, if known. 

This proposed rule also clarifies the 

pre-inspection briefing requirements 

described in § 716.4(c) of the CWCR and 

the requirements in § 716.4(e) of the 

CWCR concerning the availability of 

records. The U.S. facility must provide 

the Inspection Team and the U.S. 

Government Host Team with 

appropriate accommodations in which 

to review relevant documents and must 

ensure that all relevant information will 

be available to the teams. In addition, 

this rule provides that, whenever a 

facility does not have access to records 

for activities that took place under a 

previous ownership, the previous owner 

must make such records available to the 

Host Team (for provision to the 

Inspection Team). 

Section 716.7 of the CWCR, which 

describes requirements concerning the 

provision of samples by declared 

facilities, is revised to restrict the 

analysis of such samples to the 

verification of the absence of undeclared 

scheduled chemicals, unless otherwise 

agreed after consultation with the 

facility representative. 

Finally, this proposed rule adds a new 

§ 716.10 to clarify that, upon receipt of 

the final inspection report from the 

OPCW, BIS will send a copy of the final 

inspection report to the facility for its 

review. Facilities may submit comments 

on the final inspection report to BIS, 

and BIS will consider those comments, 

to the extent possible, when 

commenting on the final report. BIS will 

also send facilities a post-inspection 

letter with instructions based on 

decisions made during the inspection. 

K. Proposed Amendments to Part 717 of 

the CWCR (Clarification of Possible 

Non-Compliance With the Convention; 

Challenge Inspection Procedures)

Article IX of the CWC contains 

procedures for States Parties to clarify 

issues concerning compliance with the 

CWC. A State Party may request the 

OPCW to conduct an on-site challenge 

inspection of any facility or location in 

the territory or in any other place under 

Federal Register / Vol. 69, No. 234 / Tuesday, December 7, 2004 / Proposed Rules 70759

the jurisdiction or control of any other 

State Party. A challenge inspection may 

be conducted solely for the purpose of 

clarifying and resolving any questions 

concerning possible non-compliance 

with the CWC. 

This proposed rule amends § 717.1(b) 

of the CWCR to clarify that BIS will 

attempt to contact a person or facility 

that is subject to the Article IX 

clarification procedures as early as 

practical prior to the issuance of an 

official written request for clarification 

and that such person or facility must 

provide the information required by 

BIS, pursuant to an Article IX 

clarification request, within five 

working days of the receipt of BIS’s 

written request for clarification. 

In addition, this proposed rule 

amends § 717.2 (Challenge Inspections) 

by adding a new provision in 

§ 717.2(b)(2)(ii) explaining that if 

consent is not granted within four hours 

of a facility’s receipt of BIS’s inspection 

notification, BIS will assist the 

Department of Justice in seeking a 

criminal warrant. A new provision, 

§ 717.2(d)(5), also has been added that 

describes the requirements concerning 

pre-inspection briefings for challenge 

inspections. Section 717.2(d)(5) will 

require that, prior to the commencement 

of the challenge inspection, facility 

representatives must provide the 

Inspection Team and Host Team with a 

pre-inspection briefing on the facility 

that will include the following: (i) The 

types of activities being conducted at 

the facility (e.g., business and 

manufacturing operations); (ii) safety 

procedures that must be followed 

during the inspection; and (iii) 

administrative and logistical 

arrangements necessary to facilitate the 

inspection. 

Section 717.3 of the CWCR, which 

describes requirements concerning the 

provision of samples by declared 

facilities, is revised to restrict analysis 

of samples to verifying the presence or 

absence of scheduled chemicals or 

appropriate degradation products, 

unless agreed otherwise. 

Finally, this proposed rule adds a new 

§ 717.5 to clarify that, upon receipt of 

the final inspection report from the 

OPCW, BIS will forward a copy to the 

facility, for comment, and will give 

consideration to the facility’s comments 

prior to responding to the OPCW via the 

U.S. National Authority. In addition, 

proposed § 717.5 will provide that, 

upon receipt of the final inspection 

report, BIS will send the facility a post 

inspection letter detailing the issues that 

require follow-up action. 

II. Summary of Public Comments on the 

December 30, 1999, Interim CWCR Rule 

On December 30, 1999, the Bureau of 

Industry and Security (BIS) published 

an interim rule in the Federal Register

(64 FR 73744), with a request for 

comments, establishing the Chemical 

Weapons Convention Regulations 

(CWCR) to implement provisions of the 

Chemical Weapons Convention (CWC) 

and the Chemical Weapons Convention 

Implementation Act of 1998 (the Act or 

CWCIA) (22 U.S.C. 6701 et seq.), which 

was enacted on October 21, 1998. BIS 

received comments from five 

respondents. Following is a summary of 

those comments, along with BIS’s 

responses. 

A. Preamble to the December 30, 1999, 

Interim CWCR Rule 

Comment: One respondent is 

concerned about the statement in 64 FR 

73754, Part II (Public Comments on the 

Proposed Rule) of the preamble stating 

that ‘‘the United States cannot withhold 

conclusion of a facility agreement with 

the OPCW because of facility concerns.’’

The respondent suggests: (1) Because 

facility agreements are not required for 

Schedule 3 or unscheduled discrete 

organic chemical (UDOC) facilities, the 

United States could withhold 

conclusion of a facility agreement for 

such a facility because of facility 

concerns; (2) in the case of Schedule 1 

or 2 facilities, the facility’s legitimate 

concerns would become the U.S. 

Government’s concerns; and (3) that 

these issues be addressed in the 

preamble. 

Response: The CWC does not provide 

for facility approval of the facility 

agreement for any facility agreement 

concluded between the United States 

and Organization for the Prohibition of 

Chemical Weapons (OPCW). This 

includes facility agreements for 

Schedule 3 and UDOC facilities. 

Although Schedule 3 and UDOC facility 

agreements will only be pursued at the 

facility’s request, the same negotiating 

procedures will apply as with Schedule 

1 and 2 facility agreements. 

The U.S. Government will provide 

facilities the opportunity to express 

concerns at several stages throughout 

the facility agreement process. However, 

as the facility agreement and inspection 

process is a U.S. government-led 

enterprise, it will ultimately be the 

decision of the U.S. Government 

whether to include reference to facility 

concerns and comments in the facility 

agreement. 

B. Supplement No. 1 to Part 710—States 

Parties to the Convention 

Comment: One respondent is 

concerned that, unlike Hong Kong, 

which was identified as part of China, 

Taiwan’s status has not been resolved. 

Due to the volume of legitimate trade 

(imports/exports) that occurs with 

Taiwan, the respondent believes 

Taiwan’s status should be resolved and 

communicated. The respondent 

commented on this issue on the 

proposed rule, but BIS had not 

previously responded to this comment. 

Response: BIS responded to this 

respondent’s concern in the interimfinal rule dated December 30, 1999, 

under Section III Public Comments on 

Declarations and Reporting Forms and 

Handbooks. Supplement 3 to the 

Declaration and Report Handbook was 

changed to add a new Destination Code 

‘‘TAI’’ for Taiwan for declaring or 

reporting exports to or imports from 

Taiwan of Schedule 2 or Schedule 3 

chemicals. Schedule 2 chemicals may 

no longer be exported to or imported 

from Taiwan, which is not a State Party. 

Schedule 3 chemicals require an EndUse Certificate for exports to Taiwan or 

a license is required. Additionally, 

Supplement 3 to the Declaration and 

Report Handbook indicates that 

transfers to Taiwan do not imply 

recognition of the Taiwan authorities or 

an official relationship with Taiwan. 

C. Part 711—General Information 

Regarding Declaration, Reporting and 

Advance Notification Requirements 

Comment: Two respondents suggest 

that a new section (§ 711.7) be added to 

the final rule to specify the department 

and address for submittal of completed 

declarations and reports. Additionally, 

each declaration and report handbook 

should provide the same information in 

the ‘‘Introduction’’ section, and each 

declaration and report form should 

contain the information on where such 

form should be submitted. 

Response: BIS created a new § 711.7 

which provides the mailing address to 

which declarations and reports must be 

submitted. BIS also updated the 

Declaration and Report Handbook to 

include the applicable mailing address. 

D. Sections 712.6, 713.7 and 714.6—

Amended Declarations 

Comment: Three respondents request 

that BIS eliminate the requirement for 

an amended declaration for minor 

changes, such as a change in company 

name. The respondents assert that a 

change in company name is not 

substantive and has no impact on CWC 

verification activities, the object and 

70760 Federal Register / Vol. 69, No. 234 / Tuesday, December 7, 2004 / Proposed Rules 

purpose of the CWC and/or plant site 

identification code, and results in a 

paperwork burden.

Response: See BIS’s response to the 

following comment. 

Comment: One respondent requests 

that deadlines be provided for 

submission of amended declarations. 

Currently the regulations only require 

that companies submit amended 

declarations. Given that accurate 

declarations are important for on-site 

verification, the respondent contends 

that amendments should be submitted 

within 90 days of the event that 

triggered a requirement for an amended 

declaration, the same amount of time 

given for annual declarations following 

the close of a calendar year. 

Response: Based upon the experience 

gained in implementing the CWC, BIS 

has determined that certain amended 

information is necessary to assist in the 

timely processing of inspection 

notifications and in effective 

communication with company 

personnel subject to inspection. As 

currently written, the CWCR do not 

adequately explain the amendment 

procedures required of companies, or 

the reasons why BIS requires that 

information. Accordingly, BIS has 

clarified the requirements and timelines 

for submitting amended declarations. 

BIS has established different timelines 

for submitting an amendment based 

upon the type of change that is being 

made to a declaration and the time it 

will take for BIS to receive and process 

data in order to submit relevant changes 

to the OPCW. Any company changes to 

declaration or report information 

dealing with the chemicals, quantities, 

activities, end-use purposes, additions, 

deletions, or similar changes that are 

submitted, via the U.S. National 

Authority, to the OPCW must be 

received by BIS within 15 days of the 

change in information. Changes to 

internal company information that is 

not submitted to the OPCW, such as a 

declaration or inspection point of 

contact, telephone numbers, or changes 

in company ownership, must be 

received by BIS within 30 days of the 

change to the information. Additionally, 

amendments required based upon an 

inspection finding must be submitted to 

BIS within 45 days after the company is 

notified of the required amendments. 

Finally, in lieu of submitting an 

amended declaration or report form, you 

may submit your amended information 

to BIS in a letter on company letterhead. 

E. Section 713.3—Annual Declaration 

Requirements for Schedule 2 Plant Sites 

Comment: Two respondents state that 

the interim rule is unclear on the 

requirements for annual declarations on 

past activities involving Schedule 2 

chemicals. Specifically, the note to 

§ 713.3(a)(1)(ii) creates confusion by 

basing the annual declaration 

requirement on three years of activity 

and conflicts with the CWC’s and the 

CWCIA’s time frame for annual 

declarations. Moreover, the CWCIA and 

CWC require annual declarations for a 

single year and not a series of years as 

presented in the note to § 713.3(a)(1)(ii). 

Since Section 401 of the CWCIA 

commits the U.S. government to require 

only the minimal information necessary 

to satisfy the requirements of the CWC 

and the CWCIA, these respondents 

oppose a three-year time frame for 

purposes of reporting on annual 

activities. 

Response: BIS is upholding the 

CWCIA’s commitment to require only 

minimum information necessary to 

satisfy the requirements of the treaty. 

The CWCR only require an annual 

Schedule 2 declaration on past activities 

for the previous calendar year. This 

declaration requirement is based upon 

the activities that occurred at the plant 

site during ‘‘any of the previous three 

calendar years’’ as provided in the note 

to § 713.2(a)(1)(i)(B). BIS refers to this 

CWC requirement as the ‘‘three-year 

lookback.’’

F. Section 713.5—Advance Declaration 

Requirements for Additionally Planned 

Production, Processing, or Consumption 

of Schedule 2 Chemicals 

Comment: One respondent notes that 

this section states that facilities are 

allowed, but not required, to submit an 

amended declaration if they are merely 

listing additional countries for export. 

However, then the section goes on to 

state ‘‘not to exceed 10 countries.’’ The 

respondent proposes that these 

provisions be clarified, perhaps in the 

preamble, to state whether this means a 

limit of ten additional countries or ten 

total countries, and how this 

amendment should be done. 

Response: New § 713.4 (previously 

§ 713.5) requires submission of a 

Declaration on Additionally Planned 

Activities if any additional activity is 

planned after submission of the Annual 

Declaration on Anticipated Activities. 

This requirement is not an amendment, 

but rather is a specific type of 

declaration that must be submitted to 

the OPCW. Section 713.4 has been 

changed in this proposed rule to 

eliminate the limit on the total number 

of destinations that may be declared in 

both the Annual Declaration on 

Anticipated Activities and the 

Declaration on Additionally Planned 

Activities, as well as for question 2–3.7, 

on Form 2–3, on actual past exports. 

The forms required for submitting a 

Declaration on Additionally Planned 

Activities are identified in the new 

Supplement 2 to part 713 of the CWCR. 

G. Sections 714.2 and 715.1—Annual 

Declaration Requirements 

Comment: One respondent suggests 

that in some portions of the regulations 

it is not clear whether facilities are 

expected to aggregate quantities of 

chemicals among all the plants at the 

same plant site or whether each plant 

should be considered individually. This 

respondent proposes revisions to 

§§ 714.2(a)(l)(i) and (ii), 714.2(b)(l), (2), 

and (3), and 715.1(a)(l)(ii) that use the 

model in § 713.3(c)(1)(i) (‘‘Do not 

aggregate amounts of production, 

processing or consumption among 

plants on the plant site that did not 

individually produce, process or 

consume a Schedule 2 chemical in 

amounts greater than the applicable 

threshold’’). 

Response: The model paragraph 

identified by the respondent, new 

§ 713.2(c)(1)(i) (previously 

§ 713.3(c)(1)(i)), provides the specific 

requirements for ‘‘quantities to be 

declared’’ in a Schedule 2 declaration 

by determining if a Schedule 2 plant’s 

activities must be aggregated with the 

quantities of other plants’ activities that 

may have exceeded the specific 

declaration threshold. Similarly, 

§ 714.1(c)(1) (previously § 714.2(c)(1)) 

provides the same requirements for 

‘‘quantities to be declared’’ for a 

Schedule 3 plant thereby requiring that 

‘‘* * * you must aggregate the 

production quantities of all plants on 

the plant site that produced the 

Schedule 3 chemical in amounts greater 

than 30 metric tons.’’ For purposes of 

clarity, however, BIS has added the 

following sentence to § 714.1(c)(1), 

which states: ‘‘Do not aggregate amounts 

of production from plants on the plant 

site that did not individually produce a 

Schedule 3 chemical in amounts greater 

than 30 metric tons.’’ BIS also has 

clarified the requirements for 

unscheduled discrete organic chemicals 

in a note to § 715.1(a)(1)(ii) to state: ‘‘In 

calculating the aggregate production 

quantity of each individual PSF 

chemical produced by a PSF plant, do 

not include production of a PSF 

chemical that was produced in 

quantities less than 30 metric tons. 

Include only production quantities from 

those PSF plants that produced more 

than 30 metric tons of an individual PSF 

chemical.’’

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H. Section 715.1—Annual Declaration 

Requirements for Unscheduled Discrete 

Organic Chemicals (UDOCs) 

Comment: Two respondents interpret 

the exemption of UDOCs produced by 

synthesis that are ingredients or 

byproducts in foods and are designed 

for consumption by humans and/or 

animals to include dietary supplements, 

as defined under Section 201 of the 

Federal Food, Drug and Cosmetic Act 

(FFDCA), 21 U.S.C. Section 321. One 

respondent encouraged BIS to reference 

the FFDCA in interpreting 

§ 715.1(a)(2)(ii)(E). Additionally, in 

response to BIS’s request for public 

comment on the impact of the CWCR on 

facilities that produce UDOCs solely as 

consumer goods packaged for retail sale, 

two respondents recommend that BIS 

exempt facilities that process edible oils 

and edible oil byproducts solely for use 

in packaged consumer goods other than 

those intended for consumption by 

humans or animals, such as soaps, 

shampoos, detergents and consumer 

personal care products. Respondents 

argue that the concentration, 

distribution and reaction of these 

constituents vary from lot to lot, 

resulting in an unnecessary and costly 

analysis of mixtures made in-house 

expressly for incorporation into 

consumer products. Respondents argue 

that reporting of basic processing of 

edible oils operations is not consistent 

with the intent and purposes of the 

CWC. Edible oils are not discrete 

chemical entities and trying to ‘‘forcefit’’ them into the CWC’s definition of 

UDOCs creates additional workplace 

burdens on facility personnel and forces 

changes in plant equipment and 

operations. Given the noticeable 

absence of any direct threat to the object 

and purpose of the Convention, these 

respondents recommend that BIS adopt 

an exemption for facilities involved 

exclusively in the processing of 

indiscrete edible oils for use in 

packaged consumer products. They 

argue in favor of a similar exemption for 

facilities which conduct acid-base 

reactions as a normal consumer product 

formulation. This type of reaction is 

pervasive in product formulation, is 

formulation specific, and is not 

currently quantified by most 

manufacturers. Therefore, according to 

respondents, quantifying this type of 

reaction would be technically difficult, 

costly and provide little information 

pertinent to the scope and objectives of 

the CWC. 

Response: BIS will review, on a caseby-case basis, requests for chemical 

determinations of dietary supplements, 

edible oil products, and consumer 

products other than those intended for 

consumption by humans and animals. 

BIS has determined that only 

undifferentiated edible oils that are not 

discrete organic chemicals are exempt 

from the requirements of part 715 of the 

CWCR. Discrete organic chemicals are 

defined in part 710 of the CWCR.

Comment: One respondent suggests 

that the language for the exemption for 

polymers and oligomers in 

§ 715.1(a)(2)(ii)(A) is confusing and that 

it need only say, ‘‘Polymers and 

oligomers consisting of two or more 

repeating units.’’

Response: BIS agrees with the 

recommendation and has changed 

715.1(a)(2)(ii)(A) accordingly. BIS notes, 

however, that this change does not have 

any impact on those polymers and 

oligomers that are exempted. 

I. Section 716.1—General Information 

on the Conduct of Initial and Routine 

Inspections 

Comment: One respondent suggests 

that the list of responsibilities of BIS 

during inspections include: Assisting in 

the protection of confidential business 

information; consultation with facility 

representatives regarding facility 

concerns; serving as intermediary 

between the facility and the Inspection 

Team; and representing the interests of 

the facility, where appropriate. 

Response: Part 716.1 is purposefully 

broad to allow for accommodation of the 

needs of the U.S. Government, the 

Inspection Team, and the facility during 

inspections. 

J. Section 716.3—Consent to 

Inspections; Warrants for Inspections 

Comment: One respondent states that 

the interim rule fails to expressly 

incorporate the following language from 

the CWCIA: ‘‘The owner or the operator, 

occupant, or agent in charge of the 

premises to be inspected may withhold 

consent for any reason or no reason.’’ In 

comments to the interim rule, as 

captured in the preamble (64 FR 73755), 

it was suggested that this be 

incorporated in § 716.3. 

Response: The facility’s right to 

withhold consent is included in the 

general reference to the CWCIA in 

716.3(b). 

Comment: Further, this respondent 

states that the interim rule should be 

amended to state that the owner, 

occupant, or agent in charge of the 

premises to be inspected may withdraw 

consent at any time and that withdrawal 

of consent will not be a violation under 

§ 719.2(a)(1) of the CWCR (as stated in 

the 64 FR 73755). 

Response: The CWCIA explicitly 

states that consent may be withheld and 

therefore no further regulation 

amendment is required. BIS does not 

see any need to further define who may 

withhold consent. 

Comment: One respondent 

acknowledges that, if time passes 

without a facility expressing consent to 

an inspection, eventually BIS will need 

to make preparations for a warrant. 

However, there may be times when the 

facility voices its consent after BIS has 

initiated those preparations. BIS should 

clarify that it will not continue to seek 

(or serve) a warrant if the facility has 

consented to inspection and has not 

withdrawn its consent. The respondent 

suggests that this clarification does not 

require any change to the wording of the 

regulations, but it would be sufficient to 

provide a response to the public 

comment in the preamble of the final 

regulations. 

Response: Whether BIS follows 

through with a warrant exercise is 

dependent upon at which stage a facility 

consents after not having consented to 

an inspection. If, for example, a facility 

has not consented and BIS initiates the 

warrant process, and is before a 

magistrate to obtain the warrant when a 

facility consents, it is highly likely that 

at that stage, BIS will obtain the warrant 

and the inspection will be continued 

under its terms. In certain instances, it 

may be more efficient for BIS to follow 

through with obtaining a warrant, and 

therefore, such circumstances will be 

reviewed on a case by case basis. 

Comment: One respondent states that 

the requirement that the person who 

gives consent to an inspection 

‘‘represents that he or she has authority 

to make this decision for the facility’’

serves no purpose and proposes that the 

applicable Declaration and/or Reporting 

forms have a place to designate (by 

name or job title) persons who are 

authorized to consent to inspections. 

Response: As with a declaration made 

to BIS pursuant to the CWCR, an 

agreement to consent must be an official 

decision from the facility. Sections 

304(b) and 305(a) of the CWCIA require 

that the owner, operator, occupant, or 

agent in charge of a facility be sent the 

notice of an inspection, and advise the 

U.S. Government of whether the facility 

consents to the inspection. It is for that 

reason that BIS requires that consent be 

made by a person with authority to 

speak on behalf of the company. In 

practice, BIS sends a written notice of 

inspection, including a request for 

consent via facsimile to the inspection 

point of contact (I–POC) listed on the 

declaration. If for some reason, the I–

POC does not have authority to grant 

consent on behalf of the company, he or 

she would escalate the request to the 

70762 Federal Register / Vol. 69, No. 234 / Tuesday, December 7, 2004 / Proposed Rules 

appropriate official. Because this 

procedure is in place, there is no need 

to change the existing CWCR. 

K. Section 716.4—Scope and Conduct of 

Inspections 

Comment: One respondent states that 

when an owner, occupant or agent in 

charge of the premises consents to an 

initial or routine inspection, he or she 

is not consenting to provide access to, 

and has the right to deny access to: (1) 

Research and development laboratories; 

(2) pilot plants; and (3) non-relevant 

production units, including, but not 

limited to, plants and production units 

that are exempted from UDOC 

declaration requirements and plants and 

production units producing chemicals 

by fermentation, extraction, 

purification, distillation, and/or 

filtration. The respondent references a 

presentation made by the U.S. Arms 

Control and Disarmament Agency to 

industry in 1993, during which these 

assurances were made under 

discussions on ‘‘industry rights’’ and 

‘‘declared plants.’’

Response: An inspected facility at any 

point may withhold consent during the 

inspection. Such a withholding of 

consent would require the U.S. 

Government to obtain a warrant to 

continue the inspection. However, when 

consent is granted to conduct the 

inspection, the boundary of that consent 

is understood to be the declared facility 

or plant site, which, in some cases, 

includes common infrastructure that 

support both the declared plant and 

other activities located within the 

definition of the plant site. BIS will 

consult with plant sites to determine the 

access appropriate to comply with the 

mandate of the inspection while 

protecting confidential business 

information to the extent practicable. 

However, the BIS Host Team Leader has 

the responsibility under the CWCR 

(§ 716.4(b)(2)) to determine the 

appropriate access. 

Comment: One respondent suggests 

that § 716.4(b)(2) should either: (1) Be 

deleted because the paragraph serves no 

purpose when consent is not given or is 

withdrawn; or (2) revised to state that 

inspection activities apply only to areas 

of a facility subject to inspection and 

that consent does not constitute a 

waiver of rights provided by the Act or 

other law. 

Response: Section 716.4(b)(2) is 

appropriately included to define the 

scope of consent and to clarify that the 

areas of the facility subject to inspection 

pursuant to consent will be consistent 

with those subject to inspection 

pursuant to Section 305 of the CWCIA. 

No further waiver of rights provided by 

the CWCIA or law is implied by the 

consent provisions. Existing language to 

that effect is unnecessary and has 

therefore not been included. 

Comment: One respondent suggests 

that § 716.4(c) (pre-inspection briefing 

(PIB)) should be revised to make the 

following items mandatory topics: (1) 

Plant, or plant site, health and safety 

and alarms; (2) protection of 

confidential business information; and 

(3) proposed inspection plan. The 

respondent also suggests that the term 

‘‘process flow’’ be a ‘‘simplified block 

flow diagram of the process,’’ and that 

§ 716.4(c)(1)(vii) should say ‘‘Units or 

plants specific to declared operations.’’

This respondent also suggests that BIS 

make a template for the PIB available on 

the Internet to let facilities do advance 

preparation.

Response: The regulations for PIB 

requirements have been amended to 

include plant site health and safety 

issues and requirements, and associated 

alarm systems in existing subparagraph 

716.4(c)(1)(i). The CWCR already 

include as an optional topic discussion 

of confidential business information 

during pre-inspection briefings in 

716.4(c)(2)(iii). Inclusion of this topic is 

at the discretion of the plant site and 

some plant sites may not wish to 

identify confidential business 

information. Therefore, it is not 

necessary to make this topic mandatory. 

As suggested by the respondent, the 

requirements of 716.4(c)(1)(vi) have 

been amended to require presentation of 

a block flow diagram or simplified 

process flow diagram as opposed to 

process flow in order to accurately 

reflect the intended detail of such 

presentations. Also, as suggested by the 

respondent, the requirements of 

716.4(c)(1)(vii) have been amended to 

require presentation of units and plants 

specific to declared operations to more 

accurately reflect the intended scope of 

such presentation. The discussion of a 

proposed inspection plan remains 

optional in § 716.4(c)(2)(vi) (previously 

§ 716.4(c)(2)(vii)) because it is not 

required by the CWC. BIS has developed 

a PIB template for downloading from its 

Web site at www.cwc.gov.

Comment: One respondent suggests 

that § 716.4(e) (Records review) is 

unnecessary because part 721 already 

deals with recordkeeping and should be 

deleted or substantially edited. If edited, 

the areas of concern are: (1) The idea 

that records must be provided ‘‘on the 

inspection site’’ as ‘‘paper copies or via 

electronic remote access by computer’’

is inconsistent with part 721 in several 

respects—‘‘paper copies’’ implies 

duplicates, providing only two options 

(paper or electronic) disqualifies other 

media such as microfilm or microfiche, 

‘‘electronic remote access’’ seems to 

forbid local access by computer, and 

records must be provided ‘‘on the 

inspection site’’ which may distinguish 

it from the plant site; and (2) the 

wording says the Inspection Team and 

the Host Team leader may agree on 

other formats for records, not providing 

for consultation with the site. 

Response: Section 716.4(e) is 

addressing an issue separate from the 

recordkeeping provisions of part 721. 

Specifically, § 716.4(e) is referring to the 

records to be made available during an 

inspection of a facility, and the ease 

with which such records may be made 

available. The recordkeeping 

requirements of part 721 of the CWCR 

separately address the obligation on 

how records should be maintained. 

L. Section 716.5—Notification, Duration 

and Frequency of Inspections 

Comment: One respondent suggests 

that, in order to ensure that facilities can 

express consent within four hours, 

inspection notification via telephone is 

also necessary to cover possible 

contingencies. To implement this, 

revisions to § 716.5(a)(l)(i) and the 

accompanying table are proposed. 

Response: BIS generally provides 

inspection notification to facility 

inspection points of contact via 

telephone. However, we send written 

notification of inspection with the 

request for consent that is required by 

the CWCIA via facsimile. Because BIS 

has these notification procedures in 

place, there is no need to change the 

existing CWCR. 

Comment: One respondent stated that, 

although §§ 716.5(a)(1)(i)(D) and 

717.2(b)(2)(i)(D) state that a written 

inspection notice will tell the ‘‘names 

and titles’’ of each member of the 

Inspection Team, it would be useful to 

also know the nationality of each 

inspector. The respondent notes that 

this will perhaps become less important 

if the State Department revises the ITAR 

requirements. Facilities face the 

dilemma of possibly having to deny 

certain access in order to comply with 

ITAR requirements, although the CWC 

and the Act require sites to allow the 

Inspection Team into their facilities. 

Sites will need that information to make 

informed decisions. 

Response: BIS forwards facilities the 

official OPCW inspection notification as 

part of its Host Team Notification 

requesting consent. The OPCW 

notification only contains inspector 

names and titles, which fulfills the 

relevant requirement under 

§ 304(b)(3)(A)(iv) of the CWCIA. BIS 

provides facilities with the nationality 

Federal Register / Vol. 69, No. 234 / Tuesday, December 7, 2004 / Proposed Rules 70763

of inspectors during Advance Team 

activities upon request. 

If technical data subject to the ITAR 

is present on an inspection site, its 

disclosure to any foreign person, 

regardless of nationality, would require 

a license from the Department of State. 

Since the Department of State has not 

instituted an ITAR license exception for 

purposes of CWC inspections, the policy 

of BIS is to deny access to any item or 

technology subject to ITAR to any 

inspector absent U.S. Government 

authorization (see § 716.4(b)(3). 

Therefore, no change has been made to 

the existing CWCR. 

M. Sections 716.7 and 717.3—Samples 

Comment: One respondent states that 

the regulations are worded in a manner 

that could result in unfair ‘‘double 

penalties’’ for a single violation. For 

example, a failure to comply with the 

State Department’s regulations on 

samples would also constitute a 

violation of BIS’s regulations which 

require compliance with the State 

Department’s regulations. The 

respondent recommends that these 

provisions simply mention that the 

State Department’s regulations address 

the topic of samples, without the 

requirement of compliance. 

Response: Sections 716.7 and 717.3 

serve as cross-references to the 

applicable sampling provisions in the 

State Department regulations. They are 

properly included in the CWCR to 

identify the existence of obligations 

under the State Department regulations. 

Since they reference the State 

Department regulations, only the State 

Department penalties would apply—

there is no risk of duplicative violations. 

N. Sections 716.9 and 717.4—Report of 

Inspection-Related Costs 

Comment: One respondent proposed 

that these sections be modified to allow 

facilities to report the cost of preparing 

the report on inspection-related costs, in 

addition to the other required 

information for the submission. This 

respondent contends that BIS could 

have met Congress’ needs in a manner 

that would have imposed fewer 

additional costs to facilities in 

compiling the information for the repot. 

The respondent insists that BIS should 

have provided a mechanism through 

which facilities could supply Congress 

information related to the costs incurred 

in preparing the reference report. 

Response: The provisions of the 

CWCIA require the Department of 

Commerce to submit a report to 

Congress on the costs incurred by U.S. 

industry as a result of CWC inspections. 

In order to compile this report, BIS has 

required companies to submit 

information related to the costs incurred 

from the conduct of a CWC inspection. 

In the interest of reducing the burden of 

reporting on companies, the CWCR 

requests that only the minimum amount 

of information necessary to show these 

costs be submitted to BIS, which 

ordinarily is only an accounting of the 

total cost incurred by the facility as a 

result of the inspection. Companies can 

interpret this requirement in many 

ways, and they may include in this 

calculation all costs they feel are 

relevant to the inspection, which 

conceivably could include the costs 

associated with preparing the report. 

While BIS encourages facilities to 

provide additional detail as necessary, 

information beyond that relating to the 

costs of the inspection is not required by 

the CWCIA, and therefore, BIS is not 

obligated to include that information in 

its submission to Congress. However, 

BIS will consider all information 

submitted by companies when it 

prepares the cost report for submission. 

Comment: One respondent suggested 

that BIS provide a written reminder a 

week or two after an inspection so that 

the facility would not forget to prepare 

the required cost report. 

Response: Under the current 

regulations, BIS sends the Inspection 

Point of Contact a post-inspection letter 

(see new §§ 716.10 and 717.5). This 

letter is sent upon receipt of the Final 

Inspection Report from the Organization 

for the Prohibition of Chemical 

Weapons. The letter reminds the 

company of any declaration changes 

suggested and that its report of 

inspection-related costs is required. As 

a matter of policy, the companies are 

also contacted again if the report on 

inspection-related costs is not received 

within 90 days. Companies may also 

prepare the report during the inspection 

and provide it to the BIS Host Team 

Leader prior to BIS’s departure from the 

site. 

O. Section 717.1—Clarification 

Procedures; Challenge Inspection 

Requests Pursuant to Article IX of the 

Convention 

Comment: One respondent stated that 

a domestic company should have more 

than five working days to respond to an 

information request. Because the 

Convention requires the U.S. 

government to respond to the requesting 

State Party within ten days, the 

respondent proposes that there be 

advance communication to the extent 

practicable, so that the formal 

information request does not come as a 

surprise and documentation collection 

can begin in advance.

Response: BIS will contact any 

domestic company as early as practical 

in the clarification process (see

amended § 717.1(b)). Section 717.1 

applies to official requests made by BIS. 

All official requests require a 

compliance deadline. Companies have 

five days to respond to a request for 

information. This gives the U.S. 

Government time to review and possibly 

clarify with the facility any additional 

information that may need to be 

provided. 

P. Section 717.2—Challenge Inspections 

Comment: One respondent states that 

BIS should clarify that, if consent is 

granted after the government has begun 

seeking, or has obtained, a criminal 

warrant, the warrant will not be served 

while the consent remains in effect. 

Response: As stated above, whether 

BIS follows through with a warrant 

exercise is dependent upon at which 

stage a facility consents after having not 

consented to an inspection. In certain 

instances, it may be more efficient for 

BIS to follow through with obtaining a 

warrant, and the circumstances of each 

case will be reviewed on a case by case 

basis. 

Comment: One respondent states that 

notification of a challenge inspection 

should be given in every case, not 

simply ‘‘if such notification is deemed 

appropriate.’’

Response: Section 304(b)(2) of the 

CWCIA provides the circumstances 

under which notice is provided for a 

challenge inspection. Specifically, it 

states that ‘‘[n]otice for a challenge 

inspection shall be provided at any 

appropriate time determined by the 

United States National Authority.’’

Therefore, it is true that a notice is 

required for routine inspections, but 

provision of notice of a challenge 

inspection is done at the decision of the 

USNA. Therefore, provision of notice in 

the instance of a challenge inspection is 

dependent upon a decision of the 

USNA. However, BIS recognizes that the 

CWCR is unclear on the timeline for 

notice in a challenge inspection, and 

therefore, Section 717.2(b) has been 

amended to include the phrase: ‘‘if 

possible, and when such notification is 

deemed appropriate.’’

Comment: One respondent questioned 

the language of § 717.2(b)(2)(ii), 

indicating that the U.S. Government 

may make an ‘‘advance team’’ available 

to assist with preparation for a challenge 

inspection. The concern is that the Act 

provides that (in the absence of consent) 

challenge inspections will be conducted 

under a criminal warrant. Under this 

situation, it is not clear how the 

Advance Team should be treated. The 

70764 Federal Register / Vol. 69, No. 234 / Tuesday, December 7, 2004 / Proposed Rules 

respondent requests that BIS clarify 

whether the U.S. Government will 

provide any immunity or other 

protection to enable sites to work freely 

with an Advance Team in conjunction 

with a challenge inspection. 

Response: No change to the CWCR is 

required. Although BIS may provide an 

Advance Team for those inspections, it 

is not obliged to do so. Given the broad 

range of possible circumstances covered 

by the challenge provisions of the CWC, 

it may not always be appropriate for BIS 

to provide Advance Team services. 

Immunity or other comparable 

protection is not appropriate in the 

inspection contest and has therefore not 

been included. 

Comment: One respondent notes that 

BIS added provisions in a number of 

locations saying the Host Team will 

consult with the site before making 

certain decisions about inspections. 

However, it appears that § 717.2(c) does 

not provide for consultation with the 

site before agreeing to extend a 

challenge inspection. This respondent 

feels this section should be revised to 

provide for consultation. 

Response: The respondent is correct 

that in certain sections of the CWCR, 

there is explicit provision for BIS to 

consult with facility representatives, 

when appropriate, but that in the 

challenge inspection context, there are 

no similar provisions. Since this is a 

U.S. Government-led inspection, BIS 

has the decision-making authority to 

extend a challenge inspection and is 

under no obligation to consult with the 

facility before extending the timeline for 

a challenge inspection. BIS is acting on 

behalf of the U.S. Government in 

fulfilling its obligations under the CWC 

for the conduct of a challenge 

inspection. It is therefore the 

responsibility of BIS to take whatever 

measures are necessary, and reasonable, 

to ensure that the inspection is 

completed and the Inspection Team 

meets the goals of their mandate. BIS 

will make every effort to consult with 

facility representatives and to take 

facility concerns under consideration 

when making decisions during 

inspections.

Q. Section 718.1—Definitions 

Comment: Two respondents state that 

the definition of Confidential Business 

Information (CBI) in § 718.1 of the 

interim rule must be revised to conform 

to the much broader definition of CBI 

set forth in Section 103(g) of the CWCIA 

(i.e., that no inspection shall extend to 

financial data, sales and marketing data, 

pricing data, personnel data, research 

data, patent data, data maintained for 

compliance with environmental or 

occupational health and safety 

regulations, or personnel and vehicles 

entering and personnel and personal 

passenger vehicles exiting the facility). 

Response: CBI, as defined in § 718.1, 

follows the definition in the CWCIA, 

and therefore that paragraph requires no 

revision. Not only are the relevant 

sections of the Act referenced in § 718.1, 

but the definition of CBI is also 

included in that paragraph. 

Comment: In § 718.1(h), one 

respondent notes a reference to 

‘‘personnel passenger vehicles’’ (64 FR 

73803). The term used in the CWC 

Verification Annex is ‘‘personal 

passenger vehicles.’’ The CWCR should 

be changed to reflect the terminology 

used in the CWC. 

Response: BIS notes the difference in 

terms and agrees with the respondent. 

Accordingly, § 718.1(h) has been 

amended to follow the CWC, which 

reads, in Part X, paragraph 30 of the 

Verification Annex, ‘‘* * * personnel 

and personal passenger vehicles * * *.’’

R. Section 718.2—Identification of 

Confidential Business Information 

Comment: One respondent suggests 

that there is a gap in this section 

because some confidential business 

information (CBI) may be disclosed 

directly to an international Inspection 

Team, rather than through the Host 

Team (e.g., visual access or employee 

interview). The respondent suggests that 

a new paragraph be added as follows: 

‘‘(e) In any situation not addressed by 

paragraphs (b) through (d) of this 

section, where confidential business 

information is disclosed to the 

Inspection Team, the facility shall 

identify to the Host Team that the 

information is confidential. The Host 

Team shall then take appropriate steps 

to inform the Inspection Team of its 

obligation to safeguard the information 

from further disclosure.’’

Response: Because the Host Team is 

the U.S. Government representative at 

the U.S. Government-led inspection, it 

will act as the intermediary between the 

facility and the Inspection Team. As 

such, any discussion, or any transfer of 

information, orally or in writing, should 

be reviewed and effectively cleared by 

the Host Team before being relayed to 

the Inspection Team. CBI relevant to 

inspection aims that is known to the 

facility must be identified to the Host 

Team, at best, before the inspection 

begins, or at the least, before disclosure 

to Inspection Teams. It is imperative 

that facilities and facility 

representatives be fully versed in the 

location of physical CBI on the facility 

and the presence of CBI in records or 

other documentation that could be 

reviewed by the Inspection Team. BIS 

does not anticipate, or wish to promote, 

the possibility of disclosure of CBI to 

the Inspection Team without the Host 

Team’s knowledge, and therefore has 

not codified procedures in the CWCR 

whereby a facility would have 

opportunity to unilaterally release 

information to the Inspection Team. 

Nonetheless, in the unlikely event of 

CBI disclosure directly to the Inspection 

Team without prior disclosure to, or 

discussion with, the Host Team, facility 

representatives must immediately 

inform the Host Team so that 

appropriate measures contemplated by 

§ 718.2(d) may be taken. 

Comment: One respondent notes that 

the proposed rule indicates that 

companies could not shroud irrelevant 

confidential information unless the Host 

Team agreed to allow it, but that, in 

response to comments, BIS changed the 

language of § 718.2(d)(1) to say 

irrelevant confidential information may 

be shrouded ‘‘as determined by’’ the 

Host Team. The respondent argues that 

this change makes no real difference as 

it does not provide a role for the facility 

to express its legitimate concerns. 

Although the right to shroud irrelevant 

confidential information is a right 

granted to the State Party, the loss of 

confidential information is a harm to the 

facility. In order to be consistent with 

changes made elsewhere in the 

regulations, the respondent suggests that 

BIS provide for consultation with the 

facility before the Host Team makes its 

determination. 

Response: BIS Host Teams are 

cognizant of facility concerns about 

protection of CBI and will work with 

facilities to protect the release of CBI 

that is unrelated to the inspection as 

much as possible. However, there are 

instances where release of CBI to the 

Inspection Team is unavoidable, and 

under those circumstances, the 

Inspection Team will be advised that 

the information is CBI and that it should 

be protected under the CWC’s 

confidentiality provisions. Shrouding is 

one of many means through which CBI 

is protected, but it is not always the 

most reasonable means of protection, 

particularly considering the obvious 

nature of the shroud. Frequently, there 

are other alternatives employed to 

protect release of CBI to the Inspection 

Team, such as revising their inspection 

route through the facility, or taping over 

the words or symbols on tanks or 

drums. The BIS Host Team will work 

with the company in deciding the most 

appropriate method for protecting 

unrelated CBI, but ultimately, since this 

is a U.S. Government-led inspection, the 

Host Team will be the final decisionVerDate jul<14>2003 17:32 Dec 06, 2004 Jkt 205001 PO 00000 Frm 00012 Fmt 4701 Sfmt 4702 E:\FR\FM\07DEP2.SGM 07DEP2
Federal Register / Vol. 69, No. 234 / Tuesday, December 7, 2004 / Proposed Rules 70765

making authority on which protective 

method will be employed. Since prior 

consultation with the company, as 

appropriate, will generally be pursued, 

the recommended change to the 

regulatory text has not been made. 

S. Section 718.3—Disclosure of 

Confidential Business Information 

Comment: One respondent states that, 

although § 718.3(c)(4)(ii) provides for 

notice of disclosure to the owner of the 

confidential business information with 

certain exceptions, notice is of limited 

value unless the owner has an 

opportunity to be heard. Section 

404(c)(2)(B) of the Act expressly 

provides a right to a hearing to object to 

disclosure and requires the United 

States National Authority (USNA) to 

provide its decision no later than 10 

days before the scheduled or 

rescheduled date for the disclosure. 

However, the CWCR do not discuss this. 

Respondents suggest revising 

§ 718.3(c)(4) to specify the right to a 

hearing, how and when to request a 

hearing, what the hearing generally will 

consist of, how and when the decision 

will be communicated, and what avenue 

of redress is available to the owner of 

the information if the USNA decides to 

disclose the information. 

Response: The respondent has 

referenced the hearing requirements that 

relate to the domestic release of 

company CBI that is in the possession 

and control of BIS. Under the referenced 

circumstances (e.g., pending 

investigation, request of Congress, 

national interest, etc.) where CBI may be 

released, the company has a right to a 

hearing on the record prior to the 

release of such information. This 

hearing exercise is separate and distinct 

from the release of CBI during facility 

inspections. There is no right to a 

hearing during the inspection process, 

which is why all CBI must be identified 

to the Host Team prior to the start of the 

inspection in order for BIS to take 

measures to control access to CBI or 

prevent its release. 

Comment: One respondent notes that 

because §§ 718.2(c) and 718.3(b) state 

that certain information is not subject to 

the CBI provisions of the Act, that this 

reference will therefore be 

misunderstood to mean that the 

information cannot be protected as 

confidential business information. Other 

provisions in the CWCR (such as 

§§ 718.3(b)(1) and (2)) indicate that this 

was not BIS’s intent and that other laws 

will protect the information and provide 

the procedures to be followed. The 

respondent suggests that BIS clarify 

§§ 718.2(c) and 718.3(b) to say that the 

information, although not subject to the 

CBI provisions of the Act, may be 

protected under other laws.

Response: The reference to protection 

by other laws is already included in the 

text of the CWCR in § 718.3(a). That 

section specifically states that 

confidentiality of all information will be 

maintained consistent with the Act and 

the other listed statutes and regulations. 

There is no need to repeat this reference 

elsewhere in part 718. 

T. Section 719.3—Violations of the 

IEEPA Subject to Judicial Enforcement 

Proceedings 

Comment: One respondent noted that 

the 45 calendar day reference in 

§ 719.3(a)(l)(iv) could be taken literally 

to allow for advance notification on 

only a single day. The respondent 

proposes that the wording of § 719.3 be 

revised to provide that the notice is 

required ‘‘not less than 45 calendar 

days’’ before the import. 

Response: As suggested by the 

respondent, § 719.3(a)(1)(iv) has been 

amended to provide that notice is 

required ‘‘not less than’’ 45 calendar 

days before the import. 

U. Section 719.6—Request for Hearing 

and Answer 

Comment: One respondent is 

concerned that this section allows only 

fifteen days from ‘‘the date of the Notice 

of Violation and Assessment (NOVA)’’

to request a hearing. If the regulations 

do not provide sufficient time, the site’s 

attorney will have to file a request for 

hearing automatically, as a 

precautionary measure, even though 

ultimately the company may decide that 

no hearing was necessary. As the 

fifteen-day period is specified by 

statute, the respondent suggests one of 

the following: (a) Interpret the word 

‘‘days’’ to mean ‘‘working days’’ to 

address weekends and holidays; (b) 

interpret the term ‘‘date of the NOVA’’

to mean the date of receipt of the NOVA 

to address any delays in the mail; or (c) 

commit to provide a telephone call to let 

the company know that a NOVA is 

coming, with a follow-up facsimile if 

requested. 

Response: BIS agrees with the 

respondent regarding the 15-day time 

period and the ‘‘date’’ of the NOVA. 

Accordingly, BIS has amended 

§ 719.6(a) to state ‘‘15 business days’’

and has inserted the words ‘‘from the 

postmarked date of the NOVA’’ in the 

relevant sections of the CWCR. As to the 

respondent’s suggestion in (c), BIS 

cannot guarantee a phone-call in these 

circumstances, but will note that the 

recipients should contact BIS in the 

event an extension is required for 

response time to these provisions. 

V. Section 719.8—Filing and Service of 

Papers Other Than the NOVA 

Comment: One respondent suggests 

that the idea that all papers must be 

served ‘‘simultaneously’’ with their 

filing is not achievable and that the 

word ‘‘simultaneously’’ be changed to 

‘‘contemporaneously.’’

Response: Simultaneously and 

contemporaneously are interpreted by 

BIS as synonyms. BIS expects all 

motions and supporting documentation 

be served at the same time, and 

therefore, BIS requires simultaneous 

filing. This represents normal legal 

procedure. 

W. Section 719.20—Record for Decision 

Comment: One respondent notes that 

this section allows the Administrative 

Law Judge (ALJ), after an enforcement 

case, to transfer documents from the 

closed portion to the open portion of the 

record if the information becomes 

unrestricted through the passage of time 

without expressly providing notice or 

an opportunity for the owner of the 

information to be heard. In the preamble 

to the interim rule, BIS defended this by 

saying that the ALJ would necessarily 

make some sort of inquiry before 

transferring the records. The respondent 

is concerned that the ALJ may not have 

all the necessary information without 

allowing for notice and an opportunity 

to be heard. 

Response: BIS cannot impose 

additional requirements upon the ALJ 

other than those authorized by the Act. 

It is unnecessary to include additional 

direction for the ALJ in the CWCR, 

unless such direction is uniquely 

related to the CWC implementation 

process. The issue raised by the 

respondent is not CWC-specific, and 

therefore does not meet that test. 

X. Section 719.21—Payment of Final 

Assessment 

Comment: One respondent suggests 

that, in order to prevent an ALJ from 

requiring payment within an 

unreasonably short time, that § 719.21(a) 

be revised to say ‘‘or within a longer 

time specified in the order.’’ This 

respondent commented on this 

provision in the proposal, but BIS has 

not addressed the comment. 

Response: As suggested by the 

respondent, § 719.21(a) has been 

amended to provide that payment shall 

be made within 30 days of the effective 

date of the order or within such longer 

period of time as may be specified in the 

order. 

Y. Section 721.1—Inspection of Records 

Comment: One respondent suggests 

that this section begin, ‘‘Upon formal 

70766 Federal Register / Vol. 69, No. 234 / Tuesday, December 7, 2004 / Proposed Rules 

request * * *’’ to avoid confusion over 

whether a request has been made and to 

assist in determining compliance. 

Response: Requests made by the 

Department of Commerce may be made 

formally or informally, by telephone, in 

person, or through written 

correspondence. It is not necessary to 

distinguish between the types of 

requests that could be made. Therefore, 

no change has been made to the existing 

CWCR language. 

Z. Section 721.2—Recordkeeping 

Comment: Two respondents propose 

that the recordkeeping requirements 

recognize industry’s records 

management programs in the interest of 

additional costs to and interruption of 

ordinary business and as recognized 

under other statutes. Respondents 

request that they be able to use whatever 

type of records normally used in the 

ordinary course of business (originals or 

duplicates), be allowed to use any 

duplication system normally used in the 

ordinary course of business, be able to 

store records in logical locations that do 

not unduly impair inspections (on or off 

the declared plant site), and be allowed 

but not required to provide personnel 

and equipment to assist with records. 

Response: The existing regulatory 

language is designed to allow for 

accessibility of records within the time 

limitations imposed by the CWC. That 

language is further designed to require 

retention only of those records (or 

copies thereof) necessary to verify 

compliance with the CWCR. 

Unfortunately, based on the 

implementation of the CWCR to date, 

certain required records may not be kept 

in the ordinary course of business and 

certain document retention and 

duplication policies that are used in the 

ordinary course of business may 

likewise not adequately protect 

necessary documentation. As a result, 

the existing regulatory language has 

been largely retained. 

AA. Section 721.3—Destruction or 

Disposal of Records 

Comment: Two respondents state that 

the requirements of this section 

undermine records management 

programs. Respondents argue that the 

CWCR do not require that the 

governmental agency must justify 

requesting the record, that once a record 

has been provided to the government it 

should be of no concern whether the 

company retains its copy thereafter, that 

there is no ending date specified, that 

these requirements exceed BIS’s 

authority, and that the regulations do 

not impose any standards on the 

agency’s decision to grant or deny 

permission to dispose of the records. 

For these reasons, § 721.3 should either 

be deleted or revised to allow disposal 

of records after they are provided to the 

government.

Response: Section 404 of the Act 

provides for the release of certain CWCrelated records in the national interest 

to Congress, enforcement agencies, or 

other federal agencies, as necessary. The 

Act provides guidelines for requesting 

records, the protection of the 

information contained in the records, 

and hearings related to their release. As 

the Act specifically addresses the 

handling of records, and since the Act 

is applicable to all government agencies, 

there is no need for BIS to further 

delineate those requirements in its 

regulations. 

BB. Miscellaneous Comments 

Comment: It is one respondent’s 

understanding that the OPCW recently 

amended the requirements relating to 

transfers of saxitoxin and recommended 

that these changes be incorporated into 

all parts of the regulations that relate to 

the reporting of saxitoxin transfers. In 

addition, the Handbook for Schedule 1 

Declarations and Reports should be 

amended to reflect these changes. 

Furthermore, the respondent contends 

that such OPCW amendments should 

initiate notice and comment rulemaking 

to change the CWCR where it does not 

conflict with the CWCIA. 

Response: Based upon an OPCW 

Decision on transfers of the Schedule 1 

chemical saxitoxin, BIS has changed the 

advance notification period for transfers 

of 5 milligrams or less of saxitoxin, only 

when the chemical will be used for 

medical/diagnostic purposes. The 

advance notification for these transfers 

must be submitted to BIS at least 3 

calendar days prior to export or import. 

CC. CWC Declaration Forms 

Comment: Two respondents 

encourage BIS to allow another possible 

means of determining the latitude and 

longitude of a declarable plant site, 

namely Land View III Mapping 

Software. Respondents understand that 

various industries already rely on this 

software for such determinations and 

suggest BIS allow the use of this and 

similar software in the course of CWC 

inspections as a means to further 

minimize the CWC’s compliance costs 

to industry. 

Response: BIS has updated 

Supplement 1 to the Declaration and 

Report Handbook to clarify that the 

tools listed in the Handbook were only 

suggested options for industry to use in 

determining their facility’s latitude and 

longitude coordinates. BIS did not 

intend to limit industry’s activities to 

only these listed tools. There are a wide 

variety of commercial products 

available that may be used. Upon 

request, BIS will also assist companies 

in identifying their geographical 

coordinates. 

Comment: One respondent notes that 

‘‘rounding rules’’ have been provided 

for Schedule 1, Schedule 2, and 

Schedule 3 substances in mixtures and 

that these rounding rules are necessary 

for UDOCs for the very same reasons, 

i.e.: Low concentrations do not pose a 

risk to the aims of the Convention; low 

concentrations are not readily amenable 

to diversion; the producer may not even 

know that a substance is present, if the 

concentration is very low; low 

concentrations may reflect inadvertent 

production of an impurity; and, minor 

fluctuations in very low concentrations 

may make it difficult to provide an 

accurate estimate of the annual quantity. 

In addition, UDOCs are farther removed 

from possible ‘‘chemical weapons’’ use 

than any of the scheduled chemicals 

and may be present in large numbers in 

a product stream in different 

concentrations that fluctuate. In the 

absence of any ‘‘rounding rule,’’

additional Declarations and Reports will 

increase the cost of compliance without 

providing a corresponding benefit. The 

respondent proposes that any 

constituent less than 5% in a mixture be 

excluded; if not, perhaps the same 

‘‘0.5% round down to zero’’ that applies 

to Schedule 1 substances could apply. 

Response: BIS will review on a caseby-case basis requests for 

determinations of mixtures containing 

low concentrations of UDOCS. 

Comment: According to § 718.2(b)(2) 

and a footnote to Supplement No. 1 to 

part 718, companies must submit an upfront, written rationale to claim certain 

information is confidential. One 

respondent suggests that this 

requirement be deleted to reduce the 

regulatory burden and require written 

substantiation only in cases where a 

challenge is raised to the confidentiality 

of the information. The respondent 

contends this was consistent with the 

reporting requirements of many 

different federal, state and local 

agencies. 

Response: Due to the explicit 

definitional requirements provided in 

the Act pertaining to ‘‘confidential 

business information,’’ BIS has included 

in the CWCR the requirement that 

companies provide justification for why 

certain information should be 

considered CBI. BIS requests this 

‘‘rationale’’ in writing in order to clearly 

ascertain that all elements of the Act’s 

definition of CBI are met by the 

Federal Register / Vol. 69, No. 234 / Tuesday, December 7, 2004 / Proposed Rules 70767

company information. Additionally, this 

written justification assists BIS in 

keeping track of confidential business 

information identified by the company 

during the inspection process. As such, 

this requirement is an important tool 

that assists BIS in complying with the 

Act and meeting the needs of the 

companies. 

Comment: One respondent suggests 

that BIS adopt a generic policy that no 

more than two significant digits are 

required. This will greatly reduce the 

rounding burdens, without harming the 

regulatory program in any way. 

Response: This issue is currently 

under discussion at OPCW. 

Accordingly, BIS will not implement a 

policy until a final decision on this 

matter has been agreed upon by all 

States Parties. 

Comment: One respondent contends 

that the choices for ‘‘purpose of 

production’’ leave a gap in reporting 

transfers to another company within the 

same industry. The respondent 

proposed revising the Schedule 3 

import/export forms to say, ‘‘Transfer to 

other company or industry.’’

Response: BIS has changed the 

‘‘purpose(s) of production’’ question on 

Schedule 3 Form 3–3 as suggested by 

the respondent.

Rulemaking Requirements 

1. This proposed rule has been 

determined to be significant for 

purposes of E.O. 12866. 

2. Notwithstanding any other 

provision of law, no person is required 

to respond to, nor shall any person be 

subject to a penalty for failure to comply 

with, a collection of information subject 

to the Paperwork Reduction Act of 1995 

(44 U.S.C. 3501 et seq.) (PRA), unless 

that collection of information displays a 

currently valid Office of Management 

and Budget (OMB) Control Number. 

This rule proposes to revise an existing 

collection of information subject to the 

requirements of the PRA. This 

collection has been approved by OMB 

under Control Number 0694–0091 

(Chemical Weapons Convention—

Declaration and Report Forms), which 

carries burden hour estimates of 10.6 

hours for Schedule 1 Chemicals, 11.9 

hours for Schedule 2 chemicals, 2.5 

hours for Schedule 3 chemicals, 5.3/5.1 

for unscheduled discrete organic 

chemicals, and 0.17 hours for Schedule 

1 notifications. This rule proposes to 

add a new Section 711.3 to the 

Chemical Weapons Convention 

Regulations (CWCR) that would 

authorize BIS to contact any facility to 

request information concerning 

production, processing, consumption, 

export, import, or other activities 

involving scheduled chemicals and 

UDOCs, described in Parts 712 through 

715 of the CWCR, in order to determine 

whether or not the facility is in 

compliance with the CWCR. This new 

requirement would apply to all persons 

and facilities that are subject to the 

reporting or declaration provisions of 

the CWCR, as set forth in Part 721. The 

total estimated annual burden hours for 

the compliance reviews authorized 

under new Section 711.3 would be 85 

hours and the total estimated annual 

cost would be $3,236.46. This rule also 

proposes to add a new requirement for 

the submission of amendments (to 

previously submitted declarations and 

reports) resulting from inspection 

findings. The total estimated annual 

burden hours for this new amendment 

requirement would be 112 hours and 

the total estimated annual cost would be 

$4,267. Note that the estimated burden 

hours and cost for inspection related 

amendments are already included in the 

information collection authorization 

from OMB. Therefore, to avoid double 

counting the information, it does not 

appear as a separate line item under the 

revision to the information collection 

for this proposed rule. Finally, this rule 

proposes to add a new reporting form, 

entitled ‘‘No Changes’’ Certification 

Form, for UDOC facilities to use, if 

appropriate, for certifying that there are 

no changes to the information declared 

in the facilities prior year’s annual 

declaration on past activities. This new 

form will reduce industry’s estimated 

annual burden by 15 hours and $571.50. 

Note that, like the information related to 

inspection-related amendments, the 

estimated burden hours and cost for 

implementing the ‘‘No Changes’’

Certification Form are included in a 

prior information collection 

authorization from OMB. In conclusion, 

the total estimated annual burden hours 

for declarations, reports, amendments, 

and requests for compliance-related 

information under this proposed rule 

will increase from 4401 burden hours to 

4471 burden hours. The changes 

proposed by this rule are addressed 

under two separate information 

collection submissions. 

Comments are invited on: (i) Whether 

the collection of information is 

necessary for the functions of the 

agency, including whether the 

information shall have practical utility; 

(ii) the accuracy of the agency’s estimate 

of the burden of the proposed collection 

of information; (iii) ways to enhance the 

quality, utility, and clarity of the 

information to be collected; and (iv) 

ways to minimize the burden of the 

collection on respondents, including 

through the use of automated collection 

techniques or other forms of information 

technology. 

Send comments regarding this burden 

estimate or any other aspect of this 

collection of information, including 

suggestions for reducing the burden, to 

David Rostker, Office of Management 

and Budget (OMB), by e-mail to 

David_Rostker@omb.eop.gov, or by fax 

to (202) 395–7285; and to the Regulatory 

Policy Division, Bureau of Industry and 

Security, Department of Commerce, P.O. 

Box 273, Washington, DC 20044. 

3. This rule does not contain policies 

with Federalism implications as that 

term is defined in Executive Order 

13132. 

4. The Regulatory Flexibility Act 

(RFA), as amended by the Small 

Business Regulatory Enforcement 

Fairness Act of 1996 (SBREFA), 5 U.S.C. 

601 et seq., generally requires an agency 

to prepare a regulatory flexibility 

analysis of any rule subject to the notice 

and comment rulemaking requirements 

under the Administrative Procedure Act 

(5 U.S.C. 553) or any other statute, 

unless the agency certifies that the rule 

will not have a significant economic 

impact on a substantial number of small 

entities. Under section 605(b) of the 

RFA, however, if the head of an agency 

certifies that a rule will not have a 

significant economic impact on a 

substantial number of small entities, the 

statute does not require the agency to 

prepare a regulatory flexibility analysis. 

Pursuant to section 605(b), the Chief 

Counsel for Regulations, Department of 

Commerce, certified to the Chief 

Counsel for Advocacy, Small Business 

Administration, that this proposed rule, 

if promulgated, will not have a 

significant economic impact on a 

substantial number of small entities for 

the reasons explained below. 

Consequently, BIS has not prepared a 

regulatory flexibility analysis. 

Small entities include small 

businesses, small organizations and 

small governmental jurisdictions. For 

purposes of assessing the impacts of this 

proposed rule on small entities, small 

entity is defined as: (1) A small business 

according to RFA default definitions for 

small business (based on SBA size 

standards), (2) a small governmental 

jurisdiction that is a government of a 

city, county, town, school district or 

special district with a population of less 

than 50,000, and (3) a small 

organization that is any not-for-profit 

enterprise which is independently 

owned and operated and is not 

dominant in its field. BIS has 

determined that this proposed rule 

would affect only the first category of 

small entities (i.e., small businesses). 

70768 Federal Register / Vol. 69, No. 234 / Tuesday, December 7, 2004 / Proposed Rules 

The President reported to the Congress, 

in December 2003, as required under 

Section 309 of the CWC Implementation 

Act, that 297 U.S. companies 

representing 691 facilities, plant sites, 

and trading companies were subject to 

the declaration and reporting 

requirements under the Chemical 

Weapons Convention Regulations 

(CWCR). Although BIS estimates that 

the majority of these 297 companies are 

substantially sized businesses, having 

more than 500 employees, BIS does not 

have sufficient information on these 

companies to definitively characterize 

them as large entities. The Small 

Business Administration (SBA) has 

established standards for what 

constitutes a small business, with 

respect to each of the Standard 

Industrial Classification (SIC) code 

categories for ‘‘Chemicals and Allied 

Products.’’ However, BIS is not able to 

determine which of these SIC code 

categories apply to the companies that 

are subject to the declaration, reporting, 

advance notification, recordkeeping or 

inspection requirements of this rule. 

Therefore, for the purpose of assessing 

the impact of this proposed rule, BIS 

will assume that the 297 companies are 

small entities. 

Although this proposed rule would 

affect a substantial number of small 

entities (i.e., 297 companies), if adopted, 

the additional recordkeeping and 

reporting requirements that would be 

imposed by this rule would not have a 

significant economic impact on these 

entities. 

First, this rule proposes to add a new 

Section 711.3 that would authorize BIS 

to contact any facility to determine 

whether or not it is in compliance with 

the CWCR. The information that BIS 

would be authorized to request would 

concern production, processing, 

consumption, export, import, or other 

activities involving scheduled 

chemicals and UDOCs described in 

Parts 712 through 715 of the CWCR. 

This new requirement would apply to 

all persons and facilities subject to the 

reporting or declaration provisions of 

the CWCR, as set forth in Part 721. The 

total estimated annual burden hours for 

the compliance reviews authorized 

under new Section 711.3 would be 85 

hours and the total estimated annual 

cost would be $3,236.46. 

Second, this rule proposes to add a 

new requirement for the submission of 

amendments (to previously submitted 

declarations and reports) resulting from 

inspection findings. The total estimated 

annual burden hours for the new 

amendment requirement would be 112 

hours and the total estimated annual 

cost would be $4,267.

Finally, this rule proposes to add a 

new reporting form, entitled ‘‘No 

Changes’’ Certification Form, for UDOC 

facilities to use, if appropriate, for 

certifying that there are no changes to 

the information declared in the facilities 

prior year’s annual declaration on past 

activities. This new form will reduce 

industry’s estimated annual burden by 

15 hours and $571.50. 

The total estimated increase in annual 

burden hours to implement the 

additional recordkeeping and reporting 

requirements described above would be 

197 burden hours and the total 

estimated annual cost would be 

$7,503.46. The total cost of these 

recordkeeping and reporting 

requirements would represent only a 

small percentage of the revenues 

generated by the affected companies. 

Although the proposed rule would 

affect a substantial number of small 

entities (i.e., 297 companies), the total 

economic impact on the affected entities 

(i.e., $7,503.46) would not be 

significant. Since the proposed revisions 

to the CWCR would not impose a 

significant economic impact on a 

substantial number of small entities, BIS 

did not prepare a regulatory flexibility 

analysis for this rule. 

Finally, the changes proposed by this 

rule should be viewed in light of the fact 

that BIS’s discretion in formulating the 

declaration, reporting and advance 

notification, and recordkeeping 

requirements of the CWCR is limited by 

the Chemical Weapons Convention (the 

Convention). The Organization for the 

Prohibition of Chemical Weapons 

(OPCW) has issued forms for States 

Parties to use for declarations. In 

drafting the CWCR requirements and the 

forms for U.S. persons to use, BIS has 

consistently interpreted the 

Convention’s requirements as narrowly 

as possible to ensure that only 

information that the United States 

National Authority must declare to the 

OPCW is to be submitted to BIS. Other 

States Parties, such as Canada, have 

imposed much broader reporting 

requirements on their industries, with 

the government taking on the 

responsibility of determining which of 

the information collected must be 

declared to the OPCW. In addition, 

certain declaration requirements of the 

Convention are subject to interpretation 

by States Parties. Until the Conference 

of States Parties establishes clear rules 

for these requirements, States Parties 

may use their ‘‘national discretion’’ to 

implement them. ‘‘National discretion’’

generally means a reasonable 

interpretation of the requirement. For 

requirements currently subject to 

‘‘national discretion,’’ BIS has adopted 

in this rule the minimum requirements 

consistent with a reasonable reading of 

the Convention, keeping in mind its 

purposes and objectives.

List of Subjects 

15 CFR Part 710

Chemicals, Exports, Foreign Trade, 

Imports, Treaties. 

15 CFR Part 711

Chemicals, Confidential business 

information, Reporting and 

recordkeeping requirements. 

15 CFR Part 712

Chemicals, Exports, Foreign Trade, 

Imports, Reporting and recordkeeping 

requirements. 

15 CFR Part 713

Chemicals, Exports, Foreign Trade, 

Imports, Reporting and recordkeeping 

requirements. 

15 CFR Part 714

Chemicals, Exports, Foreign Trade, 

Imports, Reporting and recordkeeping 

requirements. 

15 CFR Part 715

Chemicals, Exports, Foreign Trade, 

Imports, Reporting and recordkeeping 

requirements. 

15 CFR Part 716

Chemicals, Confidential business 

information, Reporting and 

recordkeeping requirements, Search 

warrant, Treaties. 

15 CFR Part 717

Chemicals, Confidential business 

information, Reporting and 

recordkeeping requirements, Search 

warrant, Treaties. 

15 CFR Part 718

Confidential business information, 

Reporting and recordkeeping 

requirements. 

15 CFR Part 719

Administrative proceedings, Exports, 

Imports, Penalties, Violations. 

15 CFR Part 720

Penalties, violations. 

15 CFR Part 721

Reporting and recordkeeping 

requirements.

Accordingly, the Chemical Weapons 

Convention Regulations (15 CFR, 

Chapter VII, Subchapter B, Parts 710–

729) are proposed to be revised to read 

as follows:

Federal Register / Vol. 69, No. 234 / Tuesday, December 7, 2004 / Proposed Rules 70769

PART 710—GENERAL INFORMATION 

AND OVERVIEW OF THE CHEMICAL 

WEAPONS CONVENTION 

REGULATIONS (CWCR)

Sec. 

710.1 Definitions of terms used in the 

Chemical Weapons Convention 

Regulations (CWCR). 

710.2 Scope of the CWCR. 

710.3 Purposes of the Convention and 

CWCR. 

710.4 Overview of scheduled chemicals and 

examples of affected industries. 

710.5 Authority. 

710.6 Relationship between the Chemical 

Weapons Convention Regulations and 

the Export Administration Regulations, 

the International Traffic in Arms 

Regulations, and the Alcohol, Tobacco, 

Firearms and Explosives Regulations. 

Supplement No. 1 to Part 710—States Parties 

to the Convention on the Prohibition of 

the Development, Production, 

Stockpiling and Use of Chemical 

Weapons and on Their Destruction 

Supplement No. 2 to Part 710—Definitions of 

Production

Authority: 22 U.S.C. 6701 et seq.; E.O. 

13128, 64 FR 36703, 3 CFR, 1999 Comp., p. 

199.

§ 710.1 Definitions of terms used in the 

Chemical Weapons Convention Regulations 

(CWCR). 

The following are definitions of terms 

used in the CWCR (parts 710 through 

729 of this subchapter, unless otherwise 

noted): 

Act (The). Means the Chemical 

Weapons Convention Implementation 

Act of 1998 (22 U.S.C. 6701 et seq.). 

Advance Notification. Means a notice 

informing BIS of a company’s intention 

to export to or import from a State Party 

a Schedule 1 chemical. This advance 

notification must be submitted to BIS at 

least 45 days prior to the date of export 

or import (except for transfers of 5 

milligrams or less of saxitoxin for 

medical/diagnostic purposes, which 

must be submitted to BIS at least 3 days 

prior to export or import). BIS will 

inform the company in writing of the 

earliest date the shipment may occur 

under the advance notification 

procedure. Additionally, this advance 

notification requirement is imposed in 

addition to any export license 

requirements under the Department of 

Commerce’s Export Administration 

Regulations (15 CFR Parts 730 through 

799) or the Department of State’s 

International Traffic in Arms 

Regulations (22 CFR Parts 120 through 

130) or any import license requirements 

under the Department of Justice’s 

Bureau of Alcohol, Tobacco, Firearms 

and Explosives Regulations (27 CFR part 

447). 

Bureau of Industry and Security (BIS).

Means the Bureau of Industry and 

Security of the United States 

Department of Commerce, including 

Export Administration and Export 

Enforcement.

By-product. Means any chemical 

substance or mixture produced without 

a separate commercial intent during the 

manufacture, processing, use or disposal 

of another chemical substance or 

mixture. 

Chemical Weapon. Means the 

following, together or separately: 

(1) Toxic chemicals and their 

precursors, except where intended for 

purposes not prohibited under the 

Chemical Weapons Convention (CWC), 

provided that the type and quantity are 

consistent with such purposes; 

(2) Munitions and devices, 

specifically designed to cause death or 

other harm through the toxic properties 

of those toxic chemicals specified in 

paragraph (1) of this definition, which 

would be released as a result of the 

employment of such munitions and 

devices; 

(3) Any equipment specifically 

designed for use directly in connection 

with the employment of munitions or 

devices specified in paragraph (2) of this 

definition. 

Chemical Weapons Convention (CWC 

or Convention). Means the Convention 

on the Prohibition of the Development, 

Production, Stockpiling and Use of 

Chemical Weapons and on Their 

Destruction, and its annexes opened for 

signature on January 13, 1993. 

Chemical Weapons Convention 

Regulations (CWCR). Means the 

regulations contained in 15 CFR parts 

710 through 729. 

Consumption. Consumption of a 

chemical means its conversion into 

another chemical via a chemical 

reaction. Unreacted material must be 

accounted for as either waste or as 

recycled starting material. 

Declaration or report form. Means a 

multi-purpose form to be submitted to 

BIS regarding activities involving 

Schedule 1, Schedule 2, Schedule 3, or 

unscheduled discrete organic chemicals. 

Declaration forms will be used by 

facilities that have data declaration 

obligations under the CWCR and are 

‘‘declared’’ facilities whose facilityspecific information will be transmitted 

to the OPCW. Report forms will be used 

by entities that are ‘‘undeclared’’

facilities or trading companies that have 

limited reporting requirements for only 

export and import activities under the 

CWCR and whose facility-specific 

information will not be transmitted to 

the OPCW. Information from declared 

facilities, undeclared facilities and 

trading companies will also be used to 

compile U.S. national aggregate figures 

on the production, processing, 

consumption, export and import of 

specific chemicals. See also related 

definitions of declared facility, 

undeclared facility and report.

Declared facility or plant site. Means 

a facility or plant site that submits 

declarations of activities involving 

Schedule 1, Schedule 2, Schedule 3, or 

unscheduled discrete organic chemicals 

above specified threshold quantities. 

Discrete organic chemical. Means any 

chemical belonging to the class of 

chemical compounds consisting of all 

compounds of carbon, except for its 

oxides, sulfides, and metal carbonates, 

identifiable by chemical name, by 

structural formula, if known, and by 

Chemical Abstract Service registry 

number, if assigned. (Also see the 

definition for unscheduled discrete 

organic chemical.) 

Domestic transfer. Means, with regard 

to declaration requirements for 

Schedule 1 chemicals under the CWCR, 

any movement of any amount of a 

Schedule 1 chemical outside the 

geographical boundary of a facility in 

the United States to another destination 

in the United States, for any purpose. 

Also means, with regard to declaration 

requirements for Schedule 2 and 

Schedule 3 chemicals under the CWCR, 

movement of a Schedule 2 or Schedule 

3 chemical in quantities and 

concentrations greater than specified 

thresholds, outside the geographical 

boundary of a facility in the United 

States, to another destination in the 

United States, for any purpose. 

Domestic transfer includes movement 

between two divisions of one company 

or a sale from one company to another. 

Note that any movement to or from a 

facility outside the United States is 

considered an export or import for 

reporting purposes, not a domestic 

transfer. (Also see definition of United 

States.) 

EAR. Means the Export 

Administration Regulations (15 CFR 

parts 730 through 799). 

Explosive. Means a chemical (or a 

mixture of chemicals) that is included 

in Class 1 of the United Nations 

Organization hazard classification 

system. 

Facility. Means any plant site, plant or 

unit. 

Facility Agreement. Means a written 

agreement or arrangement between a 

State Party and the Organization relating 

to a specific facility subject to on-site 

verification pursuant to Articles IV, V, 

and VI of the Convention. 

Host Team. Means the U.S. 

Government team that accompanies the 

inspection team from the Organization 

for the Prohibition of Chemical 

70770 Federal Register / Vol. 69, No. 234 / Tuesday, December 7, 2004 / Proposed Rules 

Weapons during a CWC inspection for 

which the regulations in this subchapter 

apply. 

Host Team Leader. Means the 

representative from the Department of 

Commerce who heads the U.S. 

Government team that accompanies the 

Inspection Team during a CWC 

inspection for which the regulations in 

this subchapter apply. 

Hydrocarbon. Means any organic 

compound that contains only carbon 

and hydrogen. 

Impurity. Means a chemical substance 

unintentionally present with another 

chemical substance or mixture. 

Inspection Notification. Means a 

written announcement to a plant site by 

the United States National Authority 

(USNA) or the BIS Host Team of an 

impending inspection under the 

Convention. 

Inspection Site.—Means any facility 

or area at which an inspection is carried 

out and which is specifically defined in 

the respective facility agreement or 

inspection request or mandate or 

inspection request as expanded by the 

alternative or final perimeter. 

Inspection Team. Means the group of 

inspectors and inspection assistants 

assigned by the Director-General of the 

Technical Secretariat to conduct a 

particular inspection. 

Intermediate. Means a chemical 

formed through chemical reaction that 

is subsequently reacted to form another 

chemical. 

ITAR. Means the International Traffic 

in Arms Regulations (22 CFR parts 120 

through 130). 

Organization for the Prohibition of 

Chemical Weapons (OPCW). Means the 

international organization, located in 

The Hague, the Netherlands, that 

administers the CWC. 

Person. Means any individual, 

corporation, partnership, firm, 

association, trust, estate, public or 

private institution, any State or any 

political subdivision thereof, or any 

political entity within a State, any 

foreign government or nation or any 

agency, instrumentality or political 

subdivision of any such government or 

nation, or other entity located in the 

United States. 

Plant. Means a relatively selfcontained area, structure or building 

containing one or more units with 

auxiliary and associated infrastructure, 

such as: 

(1) Small administrative area; 

(2) Storage/handling areas for 

feedstock and products;

(3) Effluent/waste handling/treatment 

area; 

(4) Control/analytical laboratory; 

(5) First aid service/related medical 

section; and 

(6) Records associated with the 

movement into, around, and from the 

site, of declared chemicals and their 

feedstock or product chemicals formed 

from them, as appropriate. 

Plant site. Means the local integration 

of one or more plants, with any 

intermediate administrative levels, 

which are under one operational 

control, and includes common 

infrastructure, such as: 

(1) Administration and other offices; 

(2) Repair and maintenance shops; 

(3) Medical center; 

(4) Utilities; 

(5) Central analytical laboratory; 

(6) Research and development 

laboratories; 

(7) Central effluent and waste 

treatment area; and 

(8) Warehouse storage. 

Precursor. Means any chemical 

reactant which takes part, at any stage 

in the production, by whatever method, 

of a toxic chemical. The term includes 

any key component of a binary or 

multicomponent chemical system. 

Processing. Means a physical process 

such as formulation, extraction and 

purification in which a chemical is not 

converted into another chemical. 

Production. Means the formation of a 

chemical through chemical reaction, 

including biochemical or biologically 

mediated reaction (see Supplement No. 

2 to this part).

Notes: 1. Production of Schedule 1 

chemicals means formation through chemical 

synthesis as well as processing to extract and 

isolate Schedule 1 chemicals. 

2. Production of a Schedule 2 or Schedule 

3 chemical means all steps in the production 

of a chemical in any units within the same 

plant through chemical reaction, including 

any associated processes (e.g., purification, 

separation, extraction, distillation, or 

refining) in which the chemical is not 

converted into another chemical. The exact 

nature of any associated process (e.g., 

purification, etc.) is not required to be 

declared.

Production by synthesis. Means 

production of a chemical that is isolated 

for use or sale. 

Protective purposes in relation to 

Schedule 1 chemicals. Means any 

purpose directly related to protection 

against toxic chemicals and to 

protection against chemicals weapons. 

Further means the Schedule 1 chemical 

is used for determining the adequacy of 

defense equipment and measures. 

Purposes not prohibited by the CWC.

Means the following: 

(1) Any peaceful purpose related to an 

industrial, agricultural, research, 

medical or pharmaceutical activity or 

other activity; 

(2) Any purpose directly related to 

protection against toxic chemicals and 

to protection against chemical weapons; 

(3) Any military purpose of the 

United States that is not connected with 

the use of a chemical weapon and that 

is not dependent on the use of the toxic 

or poisonous properties of the chemical 

weapon to cause death or other harm; or 

(4) Any law enforcement purpose, 

including any domestic riot control 

purpose and including imposition of 

capital punishment. 

Report. Means information due to BIS 

on exports and imports of Schedule 1, 

Schedule 2 or Schedule 3 chemicals 

above applicable thresholds. Such 

information is included in the national 

aggregate declaration transmitted to the 

OPCW. Facility-specific information is 

not included in the national aggregate 

declaration. Note: This definition does 

not apply to parts 719 and 720 (see

§ 719.1) of this subchapter. 

Schedules of Chemicals. Means 

specific lists of toxic chemicals, groups 

of chemicals, and precursors contained 

in the CWC. See Supplements No. 1 to 

parts 712 through 714 of this 

subchapter. 

State Party. Means a country for 

which the CWC is in force. See

Supplement No. 1 to this part. 

Storage. For purposes of Schedule 1 

chemical reporting, means any quantity 

that is not accounted for under the 

categories of production, export, import, 

consumption or domestic transfer. 

Technical Secretariat. Means the 

organ of the OPCW charged with 

carrying out administrative and 

technical support functions for the 

OPCW, including carrying out the 

verification measures delineated in the 

CWC. 

Toxic Chemical. Means any chemical 

which, through its chemical action on 

life processes, can cause death, 

temporary incapacitation, or permanent 

harm to humans or animals. The term 

includes all such chemicals, regardless 

of their origin or of their method of 

production, and regardless of whether 

they are produced in facilities, in 

munitions, or elsewhere. Toxic 

chemicals that have been identified for 

the application of verification measures 

are in schedules contained in 

Supplements No. 1 to parts 712 through 

714 of this subchapter. 

Trading company. Means any person 

involved in the export and/or import of 

scheduled chemicals in amounts greater 

than specified thresholds, but not in the 

production, processing or consumption 

of such chemicals in amounts greater 

than threshold amounts requiring 

declaration. If such persons exclusively 

export or import scheduled chemicals in 

Federal Register / Vol. 69, No. 234 / Tuesday, December 7, 2004 / Proposed Rules 70771

amounts greater than specified 

thresholds, they are subject to reporting 

requirements but are not subject to 

routine inspections. Such persons must 

be the principal party in interest of the 

exports or imports and may not delegate 

CWC reporting responsibilities to a 

forwarding or other agent. 

Transfer. See domestic transfer. 

Transient intermediate. Means any 

chemical which is produced in a 

chemical process but, because they are 

in a transition state in terms of 

thermodynamics and kinetics, exist only 

for a very short period of time, and 

cannot be isolated, even by modifying or 

dismantling the plant, or altering 

process operating conditions, or by 

stopping the process altogether. 

Undeclared facility or plant site.

Means a facility or plant site that is not 

subject to declaration requirements 

because of past or anticipated 

production, processing or consumption 

involving scheduled or unscheduled 

discrete organic chemicals above 

specified threshold quantities. However, 

such facilities and plant sites may have 

a reporting requirement for exports or 

imports of such chemicals. 

Unit. Means the combination of those 

items of equipment, including vessels 

and vessel set up, necessary for the 

production, processing or consumption 

of a chemical. 

United States. Means the several 

States of the United States, the District 

of Columbia, and the commonwealths, 

territories, and possessions of the 

United States, and includes all places 

under the jurisdiction or control of the 

United States, including any of the 

places within the provisions of 

paragraph (41) of section 40102 of Title 

49 of the United States Code, any civil 

aircraft of the United States or public 

aircraft, as such terms are defined in 

paragraphs (1) and (37), respectively, of 

section 40102 of Title 49 of the United 

States Code, and any vessel of the 

United States, as such term is defined in 

section 3(b) of the Maritime Drug 

Enforcement Act, as amended (section 

1903(b) of Title 46 App. of the United 

States Code).

United States National Authority 

(USNA). Means the Department of State 

serving as the national focal point for 

the effective liaison with the 

Organization for the Prohibition of 

Chemical Weapons and other States 

Parties to the Convention and 

implementing the provisions of the 

Chemical Weapons Convention 

Implementation Act of 1998 in 

coordination with an interagency group 

designated by the President consisting 

of the Secretary of Commerce, Secretary 

of Defense, Secretary of Energy, the 

Attorney General, and the heads of other 

agencies considered necessary or 

advisable by the President, or their 

designees. The Secretary of State is the 

Director of the USNA. 

Unscheduled chemical. Means a 

chemical that is not contained in 

Schedule 1, Schedule 2, or Schedule 3 

(see Supplements No. 1 to parts 712 

through 714 of this subchapter). 

Unscheduled Discrete Organic 

Chemical (UDOC). Means any ‘‘discrete 

organic chemical’’ that is not contained 

in the Schedules of Chemicals (see

Supplements No. 1 to parts 712 through 

714 of this subchapter) and subject to 

the declaration requirements of part 715 

of this subchapter. Unscheduled 

discrete organic chemicals subject to 

declaration under this subchapter are 

those produced by synthesis that are 

isolated for use or sale as a specific endproduct. 

You. The term ‘‘you’’ or ‘‘your’’ means 

any person (see also definition of 

‘‘person’’). With regard to the 

declaration and reporting requirements 

of the CWCR, ‘‘you’’ refers to persons 

that have an obligation to report certain 

activities under the provisions of the 

CWCR.

§ 710.2 Scope of the CWCR. 

The Chemical Weapons Convention 

Regulations (parts 710 through 729 of 

this subchapter), or CWCR, implement 

certain obligations of the United States 

under the Convention on the 

Prohibition of the Development, 

Production, Stockpiling and Use of 

Chemical Weapons and on Their 

Destruction, known as the CWC or 

Convention. 

(a) Persons and facilities subject to the 

CWCR. (1) The CWCR apply to all 

persons and facilities located in the 

United States, except the following U.S. 

Government facilities: 

(i) Department of Defense facilities; 

(ii) Department of Energy facilities; 

and 

(iii) Facilities of other U.S. 

Government agencies that notify the 

USNA of their decision to be excluded 

from the CWCR. 

(2) For purposes of this subchapter, 

‘‘United States Government facilities’’

are those facilities owned and operated 

by a U.S. Government agency (including 

those operated by contractors to the 

agency), and those facilities leased to 

and operated by a U.S. Government 

agency (including those operated by 

contractors to the agency). ‘‘United 

States Government facilities’’ do not 

include facilities owned by a U.S. 

Government agency and leased to a 

private company or other entity such 

that the private company or entity may 

independently decide for what purposes 

to use the facilities. 

(b) Activities subject to the CWCR.

The activities subject to the CWCR 

(parts 710 through 729 of this 

subchapter) are activities, including 

production, processing, consumption, 

exports and imports, involving 

chemicals further described in parts 712 

through 715 of this subchapter. These 

do not include activities involving 

inorganic chemicals other than those 

listed in the Schedules of Chemicals, or 

other specifically exempted 

unscheduled discrete organic chemicals.

§ 710.3 Purposes of the Convention and 

CWCR. 

(a) Purposes of the Convention. (1) 

The Convention imposes upon the 

United States, as a State Party, certain 

declaration, inspection, and other 

obligations. In addition, the United 

States and other States Parties to the 

Convention undertake never under any 

circumstances to: 

(i) Develop, produce, otherwise 

acquire, stockpile, or retain chemical 

weapons, or transfer, directly or 

indirectly, chemical weapons to anyone; 

(ii) Use chemical weapons; 

(iii) Engage in any military 

preparations to use chemical weapons; 

or 

(iv) Assist, encourage or induce, in 

any way, anyone to engage in any 

activity prohibited by the Convention. 

(2) One objective of the Convention is 

to assure States Parties that lawful 

activities of chemical producers and 

users are not converted to unlawful 

activities related to chemical weapons. 

To achieve this objective and to give 

States Parties a mechanism to verify 

compliance, the Convention requires the 

United States and all other States Parties 

to submit declarations concerning 

chemical production, consumption, 

processing and other activities, and to 

permit international inspections within 

their borders. 

(b) Purposes of the Chemical Weapons 

Convention Regulations. To fulfill the 

United States’ obligations under the 

Convention, the CWCR (parts 710 

through 729 of this subchapter) prohibit 

certain activities, and compel the 

submission of information from all 

facilities in the United States, except for 

Department of Defense and Department 

of Energy facilities and facilities of other 

U.S. Government agencies that notify 

the USNA of their decision to be 

excluded from the CWCR on activities, 

including exports and imports of 

scheduled chemicals and certain 

information regarding unscheduled 

discrete organic chemicals as described 

in parts 712 through 715 of this 

70772 Federal Register / Vol. 69, No. 234 / Tuesday, December 7, 2004 / Proposed Rules 

subchapter. U.S. Government facilities 

are those owned by or leased to the U.S. 

Government, including facilities that are 

contractor-operated. The CWCR also 

require access for on-site inspections 

and monitoring by the OPCW, as 

described in parts 716 and 717 of this 

subchapter.

§ 710.4 Overview of scheduled chemicals 

and examples of affected industries. 

The following provides examples of 

the types of industries that may be 

affected by the CWCR (parts 710 

through 729 of this subchapter). These 

examples are not exhaustive, and you 

should refer to parts 712 through 715 of 

this subchapter to determine your 

obligations. 

(a) Schedule 1 chemicals are listed in 

Supplement No. 1 to part 712 of this 

subchapter. Schedule 1 chemicals have 

little or no use in industrial and 

agricultural industries, but may have 

limited use for research, 

pharmaceutical, medical, public health, 

or protective purposes. 

(b) Schedule 2 chemicals are listed in 

Supplement No. 1 to part 713 of this 

subchapter. Although Schedule 2 

chemicals may be useful in the 

production of chemical weapons, they 

also have legitimate uses in areas such 

as: 

(1) Flame retardant additives and 

research; 

(2) Dye and photographic industries 

(e.g., printing ink, ball point pen fluids, 

copy mediums, paints, etc.); 

(3) Medical and pharmaceutical 

preparation (e.g., anticholinergics, 

arsenicals, tranquilizer preparations);

(4) Metal plating preparations; 

(5) Epoxy resins; and 

(6) Insecticides, herbicides, 

fungicides, defoliants, and rodenticides. 

(c) Schedule 3 chemicals are listed in 

Supplement No. 1 to part 714 of this 

subchapter. Although Schedule 3 

chemicals may be useful in the 

production of chemical weapons, they 

also have legitimate uses in areas such 

as: 

(1) The production of: 

(i) Resins; 

(ii) Plastics; 

(iii) Pharmaceuticals; 

(iv) Pesticides; 

(v) Batteries; 

(vi) Cyanic acid; 

(vii) Toiletries, including perfumes 

and scents; 

(viii) Organic phosphate esters (e.g., 

hydraulic fluids, flame retardants, 

surfactants, and sequestering agents); 

and 

(2) Leather tannery and finishing 

supplies. 

(d) Unscheduled discrete organic 

chemicals are used in a wide variety of 

commercial industries, and include 

acetone, benzoyl peroxide and 

propylene glycol.

§ 710.5 Authority. 

The CWCR (parts 710 through 729 of 

this subchapter) implement certain 

provisions of the Chemical Weapons 

Convention under the authority of the 

Chemical Weapons Convention 

Implementation Act of 1998 (Act), the 

National Emergencies Act, the 

International Emergency Economic 

Powers Act (IEEPA), as amended, and 

the Export Administration Act of 1979, 

as amended, by extending verification 

and trade restriction requirements under 

Article VI and related parts of the 

Verification Annex of the Convention to 

U.S. persons. In Executive Order 13128 

of June 25, 1999, the President delegated 

authority to the Department of 

Commerce to promulgate regulations to 

implement the Act, and consistent with 

the Act, to carry out appropriate 

functions not otherwise assigned in the 

Act but necessary to implement certain 

reporting, monitoring and inspection 

requirements of the Convention and the 

Act.

§ 710.6 Relationship between the Chemical 

Weapons Convention Regulations and the 

Export Administration Regulations, the 

International Traffic in Arms Regulations, 

and the Alcohol, Tobacco, Firearms and 

Explosives Regulations. 

Certain obligations of the U.S. 

Government under the CWC pertain to 

exports and imports. The obligations on 

exports are implemented in the Export 

Administration Regulations (EAR) (15 

CFR parts 730 through 799) and the 

International Traffic in Arms 

Regulations (ITAR) (22 CFR parts 120 

through 130). See in particular §§ 742.2 

and 742.18 and part 745 of the EAR, and 

Export Control Classification Numbers 

1C350, 1C351, 1C355 and 1C395 of the 

Commerce Control List (Supplement 

No. 1 to part 774 of the EAR). The 

obligations on imports are implemented 

in the Chemical Weapons Convention 

Regulations (§§ 712.2 and 713.1) and the 

Alcohol, Tobacco, Firearms and 

Explosives Regulations in 27 CFR part 

447.

Supplement No. 1 to Part 710—States Parties 

to the Convention on the Prohibition of the 

Development, Production, Stockpiling, and 

Use of Chemical Weapons and on Their 

Destruction 

List of States Parties as of November 24, 2004

Afghanistan, Albania, Algeria, Andorra, 

Argentina, Armenia, Australia, Austria, 

Azerbaijan 

Bahrain, Bangladesh, Belarus, Belgium, 

Belize, Benin, Bolivia, Bosnia-Herzegovina, 

Botswana, Brazil, Brunei Darussalam*, 

Bulgaria, Burkina Faso, Burundi 

Cameroon, Canada, Cape Verde, Chad, Chile, 

China**, Colombia, Cook Islands*, Costa 

Rica, Cote d’Ivoire (Ivory Coast), Croatia, 

Cuba, Cyprus, Czech Republic 

Denmark, Dominica 

Ecuador, El Salvador, Equatorial Guinea, 

Eritrea, Estonia, Ethiopia 

Fiji, Finland, France 

Gabon, Gambia, Georgia, Germany, Ghana, 

Greece, Guatemala, Guinea, Guyana 

Holy See*, Hungary 

Iceland, India, Indonesia, Iran (Islamic 

Republic of), Ireland, Italy 

Jamaica, Japan, Jordan 

Kazakhstan, Kenya, Kiribati, Korea (Republic 

of), Kyrgyzstan, Kuwait 

Laos (P.D.R.)*, Latvia, Lesotho, Libya, 

Liechtenstein, Lithuania, Luxembourg 

Macedonia (The Former Yugoslav Republic 

of), Madagascar, Malawi Malaysia, 

Maldives, Mali, Malta, Marshall Islands, 

Mauritania, Mauritius, Mexico, Micronesia 

(Federated States of) Moldova (Republic 

of)*, Monaco, Mongolia, Morocco, 

Mozambique 

Namibia, Nauru, Nepal, Netherlands, New 

Zealand, Nicaragua, Niger, Nigeria, Norway 

Oman 

Pakistan, Palau, Panama, Papua New Guinea, 

Paraguay, Peru, Philippines, Poland, 

Portugal 

Qatar 

Romania, Russian Federation, Rwanda 

Saint Kitts and Nevis, Saint Lucia, Saint 

Vincent and the Grenadines, Samoa, San 

Marino, Sao Tome and Principe, Saudi 

Arabia, Senegal, Serbia and Montenegro*, 

Seychelles, Sierra Leone, Singapore, 

Slovak Republic*, Slovenia, Solomon 

Islands, South Africa, Spain, Sri Lanka, 

Sudan, Suriname*, Swaziland, Sweden, 

Switzerland 

Tajikistan, Tanzania (United Republic of), 

Thailand, Timor Leste (East Timor), Togo, 

Tonga, Trinidad and Tobago, Tunisia, 

Turkey, Turkmenistan, Tuvalu 

Uganda, Ukraine, United Arab Emirates, 

United Kingdom, United States, Uruguay, 

Uzbekistan 

Venezuela, Vietnam 

Yemen 

Zambia, Zimbabwe

* For export control purposes, these 

destinations are identified using a different 

nomenclature under the Commerce Country 

Chart in Supplement No. 1 to part 738 of the 

Export Administration Regulations (15 CFR 

Parts 730 through 799). 

** For CWC States Parties purposes, China 

includes Hong Kong and Macau.

Federal Register / Vol. 69, No. 234 / Tuesday, December 7, 2004 / Proposed Rules 70773

SUPPLEMENT NO. 2 TO PART 710—DEFINITIONS OF PRODUCTION

Schedule 1 chemicals Schedule 2 and Schedule 3 chemicals 

Unscheduled discrete

organic chemicals

(UDOCs) 

Produced by a biochemical or biologically mediated reaction. Produced by synthesis.*

Formation through chemical synthesis. 

Processing to extract and isolate Schedule 1 chemicals. 

All production steps in any units within the same plant 

which includes associated processes—purification, 

separation, extraction distillation or refining.**

*Intermediates used in a single or multi-step process to produce another declared UDOC are not declarable. 

**Intermediates are subject to declaration, except ‘‘transient intermediates,’’ which are those chemicals in a transition state in terms of thermodynamics and kinetics, that exist only for a very short period of time, and cannot be isolated, even by modifying or dismantling the plant, or by altering process operating conditions, or by stopping the process altogether are not subject to declaration. 

PART 711—GENERAL INFORMATION 

REGARDING REQUIREMENTS FOR 

DECLARATION, REPORT, ADVANCE 

NOTIFICATION, AND ELECTRONIC 

FILING OF DECLARATIONS AND 

REPORTS

Sec. 

711.1 Overviews of declaration, reporting, 

and advance notification requirements. 

711.2 Who submits declarations, reports, 

and advance notifications? 

711.3 Compliance review. 

711.4 Assistance in determining your 

obligations. 

711.5 Numerical precision of submitted 

data. 

711.6 Where to obtain forms. 

711.7 Where to submit declarations, 

reports, and advance notifications. 

711.8 How to request authorization from 

BIS to make electronic submissions of 

declarations or reports.

Authority: 22 U.S.C. 6701 et seq.; E.O. 

13128, 64 FR 36703, 3 CFR, 1999 Comp., p. 

199.

§ 711.1 Overviews of declaration, 

reporting, and advance notification 

requirements. 

Parts 712 through 715 of the CWCR 

(parts 710 through 729 of this 

subchapter) describe the declaration, 

advance notification and reporting 

requirements for Schedule 1, 2 and 3 

chemicals and for unscheduled discrete 

organic chemicals (UDOCs). For each 

type of chemical, the Convention 

requires annual declarations. If, after 

reviewing parts 712 through 715 of this 

subchapter, you determine that you 

have declaration, advance notification 

or reporting requirements, you may 

obtain the appropriate forms by 

contacting the Bureau of Industry and 

Security (BIS) (see § 711.6).

§ 711.2 Who submits declarations, reports, 

and advance notifications? 

The owner, operator, or senior 

management official of a facility subject 

to declaration, report, or advance 

notification requirements under the 

CWCR (parts 710 through 729 of this 

subchapter) is responsible for the 

submission of all required documents in 

accordance with all applicable 

provisions of the CWCR.

§ 711.3 Compliance review. 

Periodically, BIS will request 

information from persons and facilities 

subject to the CWCR to determine 

compliance with the reporting, 

declaration and notification 

requirements set forth herein. 

Information requested may relate to the 

production, processing, consumption, 

export, import, or other activities 

involving scheduled chemicals and 

unscheduled discrete organic chemicals 

described in parts 712 through 715 of 

this subchapter. Any person or facility 

subject to the CWCR and receiving such 

a request for information will be 

required to provide a response to BIS 

within the time-frame specified in the 

request. This requirement does not, in 

itself, impose a requirement to create 

new records or maintain existing 

records. The recordkeeping 

requirements that apply to persons and 

facilities that are subject to the reporting 

or declaration provisions of the CWCR 

are set forth in part 721.

§ 711.4 Assistance in determining your 

obligations. 

(a) Determining if your chemical is 

subject to declaration, reporting or 

advance notification requirements. (1) If 

you need assistance in determining if 

your chemical is classified as a 

Schedule 1, Schedule 2, or Schedule 3 

chemical, or is an unscheduled discrete 

organic chemical, submit your written 

request for a chemical determination to 

BIS. Such requests may be sent via 

facsimile to (703) 605–4425, e-mailed to 

cdr@cwc.gov, or mailed to the Treaty 

Compliance Division, Bureau of 

Industry and Security, U.S. Department 

of Commerce, 1555 Wilson Boulevard, 

Suite 700, Arlington, Virginia 22209–

2405. Your request should include the 

information noted in paragraph (a)(2) of 

this section to ensure an accurate 

determination. Also include any 

additional information that you feel is 

relevant to the chemical or process 

involved (see part 718 of this subchapter 

for provisions regarding treatment of 

confidential business information). If 

you are unable to provide all of the 

information required in paragraph (a)(2) 

of this section, you should include an 

explanation identifying the reasons or 

deficiencies that preclude you from 

supplying the information. If BIS cannot 

make a determination based upon the 

information submitted, BIS will return 

the request to you and identify the 

additional information that is necessary 

to complete a chemical determination. 

BIS will provide a written response to 

your chemical determination request 

within 10 working days of receipt of the 

request. 

(2) Include the following information 

in each chemical determination request: 

(i) Date of request; 

(ii) Company name and complete 

street address; 

(iii) Point of contact; 

(iv) Phone and facsimile number of 

contact; 

(v) E-mail address of contact, if you 

want an acknowledgment of receipt sent 

via e-mail; 

(vi) Chemical Name; 

(vii) Structural formula of the 

chemical, if the chemical is not 

specifically identified by name and 

chemical abstract service registry 

number in Supplements No. 1 to parts 

712 through 714 of the CWCR; and 

(viii) Chemical Abstract Service 

registry number, if assigned. 

(b) Other inquiries. If you need 

assistance in interpreting the provisions 

of this subchapter or need assistance 

with declaration, forms, reporting, 

advance notification, inspection or 

facility agreement issues, contact BIS’s 

Treaty Compliance Division by phone at 

(703) 605–4400. If you require a 

response from BIS in writing, submit a 

detailed request to BIS that explains 

your question, issue, or request. Send 

the request to the address or facsimile 

70774 Federal Register / Vol. 69, No. 234 / Tuesday, December 7, 2004 / Proposed Rules 

included in paragraph (a) of this section, 

or e-mail the request to cwcqa@cwc.gov.

§ 711.5 Numerical precision of submitted 

data. 

Numerical information submitted in 

declarations and reports is to be 

provided per applicable rounding rules 

in each part (i.e., parts 712 through 715 

of this subchapter) with a precision 

equal to that which can be reasonably 

provided using existing documentation, 

equipment, and measurement 

techniques.

§ 711.6 Where to obtain forms. 

(a) Forms to complete declarations 

and reports required by the CWCR may 

be obtained by contacting: Treaty 

Compliance Division, Bureau of 

Industry and Security, U.S. Department 

of Commerce, 1555 Wilson Blvd., Suite 

700, Arlington, VA 22209–2405, 

Telephone: (703) 605–4400. Forms and 

forms software may also be downloaded 

from the Internet at http://www.cwc.gov. 

(b) If the amount of information you 

are required to submit is greater than the 

given form will allow, multiple copies 

of forms may be submitted.

§ 711.7 Where to submit declarations, 

reports and advanced notifications. 

Declarations, reports and advance 

notifications required by the CWCR 

must be sent to: Treaty Compliance 

Division, Bureau of Industry and 

Security, U.S. Department of Commerce, 

1555 Wilson Blvd., Suite 700, Arlington, 

VA 22209–2405, Telephone: (703) 605–

4400. Advanced notifications may also 

be facsimiled to (703) 235–1481. 

Specific types of declarations and 

reports and due dates are outlined in 

Supplement No. 2 to parts 712 through 

715 of the CWCR.

§ 711.8 How to request authorization from 

BIS to make electronic submissions of 

declarations or reports. 

(a) Scope. This section provides an 

optional method of submitting 

declarations or reports. Specifically, this 

section applies to the electronic 

submission of declarations and reports 

required under the CWCR. If you choose 

to submit declarations and reports by 

electronic means, all such electronic 

submissions must be made through the 

Web-Data Entry System for Industry 

(Web-DESI), which can be accessed on 

the CWC Web site at http://

www.cwc.gov. 

(b) Authorization. If you or your 

company has a facility, plant site, or 

trading company that has been assigned 

a U.S. Code Number (USC Number), you 

may submit declarations and reports 

electronically, once you have received 

authorization from BIS to do so. An 

authorization to submit declarations and 

reports electronically may be limited or 

withdrawn by BIS at any time. There are 

no prerequisites for obtaining 

permission to submit electronically, nor 

are there any limitations with regard to 

the types of declarations or reports that 

are eligible for electronic submission. 

However, BIS may direct, for any 

reason, that any electronic declaration 

or report be resubmitted in writing, 

either in whole or in part. 

(1) Requesting approval to submit 

declarations and reports electronically.

To submit declarations and reports 

electronically, you or your company 

must submit a written request to BIS at 

the address identified in § 711.6 of the 

CWCR. Both the envelope and letter 

must be marked ‘‘Attn: Electronic 

Declaration or Report Request.’’ Your 

request should be on company 

letterhead and must contain your name 

or the company’s name, your mailing 

address at the company, the name of the 

facility, plant site or trading company 

and its U.S. Code Number, the address 

of the facility, plant site or trading 

company (this address may be different 

from the mailing address), the list of 

individuals who are authorized to view, 

edit, or edit and submit declarations and 

reports on behalf of your company, and 

the telephone number and name and 

title of the official responsible for 

certifying that each individual listed in 

the request is authorized to view, edit, 

or edit and submit declarations and 

reports on behalf of you or your 

company. Additional information 

required for submitting electronic 

declarations and reports may be found 

on BIS’s Web site at http://

www.cwc.gov. Once you have completed 

and submitted the necessary 

certifications, you may be authorized by 

BIS to view, edit, or edit and submit 

declarations and reports electronically.

Note to § 711.8(b)(1): You must submit a 

separate request for each facility, plant site or 

trading company owned by your company 

(e.g., each site that is assigned a unique U.S. 

Code Number).

(2) Assignment and use of passwords 

for facilities, plant sites and trading 

companies (USC password) and WebDESI user accounts (user name and 

password). (i) Each person, facility, 

plant site or trading company 

authorized to submit declarations and 

reports electronically will be assigned a 

password (USC password) that must be 

used in conjunction with the U.S.C. 

Number. Each individual authorized by 

BIS to view, edit, or edit and submit 

declarations and reports electronically 

for a facility, plant site or trading 

company will be assigned a Web-DESI 

user account (user name and password) 

telephonically by BIS. A Web-DESI user 

account will be assigned to you only if 

your company has certified to BIS that 

you are authorized to act for it in 

viewing, editing, or editing and 

submitting electronic declarations and 

reports under the CWCR.

Note to § 711.8(b)(2)(i): When individuals 

must have access to multiple Web-DESI 

accounts, their companies must identify such 

individuals on the approval request for each 

of these Web-DESI accounts. BIS will 

coordinate with such individuals to ensure 

that the assigned user name and password is 

the same for each account.

(ii) Your company may reveal the 

facility, plant site or trading company 

password (USC password) only to WebDESI users with valid passwords, their 

supervisors, and employees or agents of 

the company with a commercial 

justification for knowing the password. 

(iii) If you are an authorized WebDESI account user, you may not: 

(A) Disclose your user name or 

password to anyone; 

(B) Record your user name or 

password, either in writing or 

electronically; 

(C) Authorize another person to use 

your user name or password; or 

(D) Use your user name or password 

following termination, either by BIS or 

by your company, of your authorization 

or approval for Web-DESI use. 

(iv) To prevent misuse of the WebDESI account: 

(A) If Web-DESI user account 

information (i.e., user name and 

password) is lost, stolen or otherwise 

compromised, the company and the 

user must report the loss, theft or 

compromise of the user account 

information, immediately, by calling 

BIS at (703) 235–1335. Within two 

business days of making the report, the 

company and the user must submit 

written confirmation to BIS at the 

address provided in § 711.6 of the 

CWCR. 

(B) Your company is responsible for 

immediately notifying BIS whenever a 

Web-DESI user leaves the employ of the 

company or otherwise ceases to be 

authorized by the company to submit 

declarations and reports electronically 

on its behalf. 

(v) No person may use, copy, 

appropriate or otherwise compromise a 

Web-DESI account user name or 

password assigned to another person. 

No person, except a person authorized 

access by the company, may use or copy 

the facility, plant site or trading 

company password (USC password), nor 

may any person steal or otherwise 

compromise this password. 

Federal Register / Vol. 69, No. 234 / Tuesday, December 7, 2004 / Proposed Rules 70775

(c) Electronic submission of 

declarations and reports.

(1) General instructions. Upon 

submission of the required certifications 

and approval of the company’s request 

to use electronic submission, BIS will 

provide instructions on both the method 

for transmitting declarations and reports 

electronically and the process for 

submitting required supporting 

documents, if any. These instructions 

may be modified by BIS from time to 

time. 

(2) Declarations and reports. The 

electronic submission of a declaration or 

report will constitute an official 

document as required under parts 712 

through 715 of the CWCR. Such 

submissions must provide the same 

information as written declarations and 

reports and are subject to the 

recordkeeping provisions of part 720 of 

the CWCR. The company and Web-DESI 

user submitting the declaration or report 

will be deemed to have made all 

representations and certifications as if 

the submission were made in writing by 

the company and signed by the 

certifying official. Electronic submission 

of a declaration or report will be 

considered complete upon transmittal to 

BIS. 

(d) Updating. A company approved 

for electronic submission of declarations 

or reports under Web-DESI must 

promptly notify BIS of any change in its 

name, ownership or address. If your 

company wishes to have an individual 

added as a Web-DESI user, your 

company must inform BIS and follow 

the instructions provided by BIS. Your 

company should conduct periodic 

reviews to ensure that the company’s 

designated certifying official and WebDESI users are individuals whose 

current responsibilities make it 

necessary and appropriate that they act 

for the company in either capacity.

PART 712—ACTIVITIES INVOLVING 

SCHEDULE 1 CHEMICALS

Sec. 

712.1 Round to zero rule that applies to 

activities involving Schedule 1 

chemicals. 

712.2 Restrictions on the activities 

involving Schedule 1 chemicals. 

712.3 Initial declaration requirements for 

declared facilities which are engaged in 

the production of Schedule 1 chemicals 

for purposes not prohibited by the CWC. 

712.4 New Schedule 1 production facility. 

712.5 Annual declaration requirements for 

facilities engaged in the production of 

Schedule 1 chemicals for purposes not 

prohibited by the CWC. 

712.6 Advance notification and annual 

report of all exports and imports of 

Schedule 1 chemicals to, or from, other 

States Parties. 

712.7 Amended declaration or report. 

712.8 Declarations and reports returned 

without action by BIS. 

712.9 Deadlines for submission of Schedule 

1 declarations, reports, advance 

notifications, and amendments. 

Supplement No. 1 to Part 712—Schedule 1 

Chemicals 

Supplement No. 2 to Part 712—Deadlines for 

Submission of Schedule 1 Declarations, 

Advance Notifications, Reports, and 

Amendments

Authority: 22 U.S.C. 6701 et seq.; 50 U.S.C. 

1601 et seq.; 50 U.S.C. 1701 et seq.; E.O. 

12938, 59 FR 59099, 3 CFR, 1994 Comp., p. 

950, as amended by E.O. 13094, 63 FR 40803, 

3 CFR, 1998 Comp., p. 200; E.O. 13128, 64 

FR 36703, 3 CFR, 1999 Comp., p. 199.

§ 712.1 Round to zero rule that applies to 

activities involving Schedule 1 chemicals. 

Facilities that produce, export or 

import mixtures containing less than 

0.5% aggregate quantities of Schedule 1 

chemicals (see Supplement No. 1 to this 

part) as unavoidable by-products or 

impurities may round to zero and are 

not subject to the provision of this part 

712. Schedule 1 content may be 

calculated by volume or weight, 

whichever yields the lesser percent. 

Note that such mixtures may be subject 

to the regulatory requirements of other 

federal agencies.

§ 712.2 Restrictions on the activities 

involving Schedule 1 chemicals. 

(a) You may not produce Schedule 1 

chemicals for protective purposes. 

(b) You may not import any Schedule 

1 chemical unless: 

(1) The import is from a State Party; 

(2) The import is for research, 

medical, pharmaceutical, or protective 

purposes; 

(3) The import is in types and 

quantities strictly limited to those that 

can be justified for such purposes; and 

(4) You have notified BIS at least 45 

calendar days prior to the import, 

pursuant to § 712.6 of the CWCR.

Note 1 to § 712.2: Pursuant to § 712.6, 

advance notifications of import of saxitoxin 

of 5 milligrams or less for medical/diagnostic 

purposes must be submitted to BIS at least 

3 days prior to import.

Note 2 to § 712.2: For specific provisions 

relating to the prior advance notification of 

exports of all Schedule 1 chemicals, see 

§ 745.1 of the Export Administration 

Regulations (EAR) (15 CFR parts 730 through 

799). For specific provisions relating to 

license requirements for exports of Schedule 

1 chemicals, see § 742.2 and § 742.18 of the 

EAR for Schedule 1 chemicals subject to the 

jurisdiction of the Department of Commerce 

and see the International Traffic in Arms 

Regulations (22 CFR parts 120 through 130) 

for Schedule 1 chemicals subject to the 

jurisdiction of the Department of State.

(c)(1) The provisions of paragraphs (a) 

and (b) of this section do not apply to 

the retention, ownership, possession, 

transfer, or receipt of a Schedule 1 

chemical by a department, agency, or 

other entity of the United States, or by 

a person described in paragraph (c)(2) of 

this section, pending destruction of the 

Schedule 1 chemical; 

(2) A person referred to in paragraph 

(c)(1) of this section is: 

(i) Any person, including a member of 

the Armed Forces of the United States, 

who is authorized by law or by an 

appropriate officer of the United States 

to retain, own, possess transfer, or 

receive the Schedule 1 chemical; or 

(ii) In an emergency situation, any 

otherwise non-culpable person if the 

person is attempting to seize or destroy 

the Schedule 1 chemical.

§ 712.3 Initial declaration requirements for 

declared facilities which are engaged in the 

production of Schedule 1 chemicals for 

purposes not prohibited by the CWC. 

Initial declarations submitted in 

February 2000 remain valid until 

amended or rescinded. If you plan to 

change/amend the technical description 

of your facility submitted with your 

initial declaration, you must submit an 

amended initial declaration to BIS 200 

calendar days prior to implementing the 

change (see 712.5(b)(1)(ii)).

§ 712.4 New Schedule 1 production 

facility. 

(a) Establishment of a new Schedule 

1 production facility. (1) If your facility 

has never before been declared under 

§ 712.5 of the CWCR, or the initial 

declaration for your facility has been 

withdrawn pursuant to § 712.5(f) of the 

CWCR, and you intend to begin 

production of Schedule 1 chemicals at 

your facility in quantities greater than 

100 grams aggregate per year for 

research, medical, or pharmaceutical 

purposes, you must provide an initial 

declaration (with a current detailed 

technical description of your facility) to 

BIS in no less than 200 calendar days in 

advance of commencing such 

production. Such facilities are 

considered to be ‘‘new Schedule 1 

production facilities’’ and are subject to 

an initial inspection within 200 

calendar days of submitting an initial 

declaration. 

(2) New Schedule 1 production 

facilities that submit an initial 

declaration pursuant to paragraph (a)(1) 

of this section are considered approved 

Schedule 1 production facilities for 

purposes of the CWC, unless otherwise 

notified by BIS within 30 days of receipt 

by BIS of that initial declaration. 

(b) Types of declaration forms 

required. If your new Schedule 1 

70776 Federal Register / Vol. 69, No. 234 / Tuesday, December 7, 2004 / Proposed Rules 

production facility will produce in 

excess of 100 grams aggregate of 

Schedule 1 chemicals, you must 

complete the Certification Form, Form 

1–1 and Form A. You must also provide 

a detailed technical description of the 

new facility or its relevant parts, and a 

detailed diagram of the declared areas in 

the facility. 

(c) Two hundred days after a new 

Schedule 1 production facility submits 

its initial declaration, it is subject to the 

declaration requirements of § 712.5(a)(1) 

and (a)(2), and § 712.5(b)(1)(ii).

§ 712.5 Annual declaration requirements 

for facilities engaged in the production of 

Schedule 1 chemicals for purposes not 

prohibited by the CWC. 

(a) Declaration requirements. (1) 

Annual declaration on past activities.

You must complete the forms specified 

in paragraph (b)(2) of this section if you 

produced at your facility in excess of 

100 grams aggregate of Schedule l 

chemicals in the previous calendar year. 

As a declared Schedule 1 facility, in 

addition to declaring the production of 

each Schedule 1 chemical that 

comprises your aggregate production of 

Schedule 1 chemicals, you must also 

declare any Schedule 1, Schedule 2, or 

Schedule 3 precursor used to produce 

the declared Schedule 1 chemical. You 

must further declare each Schedule 1 

chemical used (consumed) and stored at 

your facility, and domestically 

transferred from your facility during the 

previous calendar year, whether or not 

you produced that Schedule 1 chemical 

at your facility. 

(2) Annual declaration on anticipated 

activities. You must complete the forms 

specified in paragraph (b)(3) of this 

section if you anticipate that you will 

produce at your facility more than 100 

grams aggregate of Schedule 1 chemicals 

in the next calendar year. If you are not 

already a declared facility, you must 

complete an initial declaration (see

§ 712.4) 200 calendar days before 

commencing operations or increasing 

production which will result in 

production of more than 100 grams 

aggregate of Schedule 1 chemicals. 

(b) Declaration forms to be used. (1) 

Initial declaration. (i) You must have 

completed the Certification Form, Form 

1–1 and Form A if you produced at your 

facility in excess of 100 grams aggregate 

of Schedule 1 chemicals in calendar 

years 1997, 1998, or 1999. You must 

have provided a detailed current 

technical description of your facility or 

its relevant parts including a narrative 

statement, and a detailed diagram of the 

declared areas in the facility. 

(ii) If you plan to change the technical 

description of your facility from your 

initial declaration completed and 

submitted pursuant to § 712.3 or § 712.4, 

you must submit an amended initial 

declaration to BIS 200 calendar days 

prior to the change. Such amendments 

to your initial declaration must be made 

by completing a Certification Form, 

Form 1–1 and Form A, including the 

new description of the facility. See

§ 712.7 for additional instructions on 

amending Schedule 1 declarations. 

(2) Annual declaration on past 

activities. If you are subject to the 

declaration requirement of paragraph 

(a)(1) of this section, you must complete 

the Certification Form and Forms 1–1, 

1–2, 1–2A, 1–2B, and Form A if your 

facility was involved in the production 

of Schedule 1 chemicals in the previous 

calendar year. Form B is optional. 

(3) Annual declaration on anticipated 

activities. If you anticipate that you will 

produce at your facility in excess of 100 

grams aggregate of Schedule 1 chemicals 

in the next calendar year you must 

complete the Certification Form and 

Forms 1–1, 1–4, and Form A. Form B is 

optional. 

(c) Quantities to be declared. If you 

produced in excess of 100 grams 

aggregate of Schedule 1 chemicals in the 

previous calendar year, you must 

declare the entire quantity of such 

production, rounded to the nearest 

gram. You must also declare the 

quantity of any Schedule 1, Schedule 2 

or Schedule 3 precursor used to produce 

the declared Schedule 1 chemical, 

rounded to the nearest gram. You must 

further declare the quantity of each 

Schedule 1 chemical consumed or 

stored by, or domestically transferred 

from, your facility, whether or not the 

Schedule 1 chemical was produced by 

your facility, rounded to the nearest 

gram. In calculating the amount of 

Schedule 1 chemical you produced, 

consumed or stored, count only the 

amount of the Schedule 1 chemical(s) in 

a mixture, not the total weight of the 

mixture (i.e., do not count the weight of 

the solution, solvent, or container). 

(d) For the purpose of determining if 

a Schedule 1 chemical is subject to 

declaration, you must declare a 

Schedule 1 chemical that is an 

intermediate, but not a transient 

intermediate. 

(e) ‘‘Declared’’ Schedule 1 facilities 

and routine inspections. Only facilities 

that submitted a declaration pursuant to 

paragraph (a)(1) or (a)(2) of this section 

or § 712.4 are considered ‘‘declared’’

Schedule 1 facilities. A ‘‘declared’’

Schedule 1 facility is subject to initial 

and routine inspection by the OPCW 

(see part 716 of this subchapter). 

(f) Approval of declared Schedule 1 

production facilities. Facilities that 

submit declarations pursuant to this 

section are considered approved 

Schedule 1 production facilities for 

purposes of the CWC, unless otherwise 

notified by BIS within 30 days of receipt 

by BIS of an annual declaration on past 

activities or annual declaration on 

anticipated activities (see paragraphs 

(a)(1) and (a)(2) of this section). If your 

facility does not produce more than 100 

grams aggregate of Schedule 1 

chemicals, no approval by BIS is 

required. 

(g) Withdrawal of Schedule 1 initial 

declarations. A facility subject to 

§§ 712.3, 712.4 and 712.5 of the CWCR 

may withdraw its initial declaration at 

any time by notifying BIS in writing. A 

notification requesting the withdrawal 

of the initial declaration should be sent 

on company letterhead to the address in 

§ 711.6 of the CWCR. BIS will 

acknowledge receipt of the withdrawal 

of the initial declaration. Facilities 

withdrawing their initial declaration 

may not produce subsequently in excess 

of 100 grams aggregate of Schedule 1 

chemicals within a calendar year unless 

pursuant to § 712.4.

§ 712.6 Advance notification and annual 

report of all exports and imports of 

Schedule 1 chemicals to, or from, other 

States Parties. 

Pursuant to the Convention, the 

United States is required to notify the 

OPCW not less than 30 days in advance 

of every export or import of a Schedule 

1 chemical, in any quantity, to or from 

another State Party. In addition, the 

United States is required to provide a 

report of all exports and imports of 

Schedule 1 chemicals to or from other 

States Parties during each calendar year. 

If you plan to export or import any 

quantity of a Schedule 1 chemical from 

or to your declared facility, undeclared 

facility or trading company, you must 

notify BIS in advance of the export or 

import and complete an annual report of 

exports and imports that actually 

occurred during the previous calendar 

year. The United States will transmit to 

the OPCW the advance notifications and 

a detailed annual declaration of each 

actual export or import of a Schedule 1 

chemical from/to the United States. 

Note that the advance notification and 

annual report requirements of this 

section do not relieve you of any 

requirement to obtain a license for 

export of Schedule 1 chemicals subject 

to the EAR or ITAR or a license for 

import of Schedule 1 chemicals from 

the Department of Justice under the 

Alcohol, Tobacco, Firearms and 

Explosives Regulations in 27 CFR part 

447. Only ‘‘declared’’ facilities as 

defined in § 712.5(d) are subject to 

Federal Register / Vol. 69, No. 234 / Tuesday, December 7, 2004 / Proposed Rules 70777

initial and routine inspections pursuant 

to part 716 of this subchapter. 

(a) Advance notification of exports 

and imports. You must notify BIS at 

least 45 calendar days prior to exporting 

or importing any quantity of a Schedule 

1 chemical, except for exports or 

imports of 5 milligrams or less of 

Saxitoxin—B (7)—for medical/

diagnostic purposes, listed in 

Supplement No. 1 to this part to or from 

another State Party. Advance 

notification of export or import of 5 

milligrams or less of Saxitoxin for 

medical/diagnostic purposes only, must 

be submitted to BIS at least 3 calendar 

days prior to export or import. Note that 

advance notifications for exports may be 

sent to BIS prior to or after submission 

of a license application to BIS for 

Schedule 1 chemicals subject to the 

EAR and controlled under ECCN 1C351 

or to the Department of State for 

Schedule 1 chemicals controlled under 

the ITAR. Such advance notifications 

must be submitted separately from 

license applications.

(1) Advance notifications should be 

on company letterhead or must clearly 

identify the reporting entity by name of 

company, complete address, name of 

contact person and telephone and 

facsimile numbers, along with the 

following information: 

(i) Chemical name; 

(ii) Structural formula of the 

chemical; 

(iii) Chemical Abstract Service (CAS) 

Registry Number; 

(iv) Quantity involved in grams; 

(v) Planned date of export or import; 

(vi) Purpose (end-use) of export or 

import (i.e., research, medical, 

pharmaceutical, or protective purposes); 

(vii) Name(s) of exporter and 

importer; 

(viii) Complete street address(es) of 

exporter and importer; 

(ix) U.S. export license or control 

number, if known; and 

(x) Company identification number, 

once assigned by BIS. 

(2) Send the advance notification by 

facsimile to (703) 235–1481 or to the 

following address for mail and courier 

deliveries: Treaty Compliance Division, 

Bureau of Industry and Security, 

Department of Commerce, 1555 Wilson 

Boulevard, Suite 700, Arlington, VA 

22209–2405, Attn: ‘‘Advance 

Notification of Schedule 1 Chemical 

[Export][Import].’’

(3) Upon receipt of the advance 

notification, BIS will inform the 

exporter or importer of the earliest date 

after which the shipment may occur 

under the advance notification 

procedure. To export a Schedule 1 

chemical subject to an export license 

requirement either under the EAR or the 

ITAR, the exporter must have applied 

for and been granted a license (see

§ 742.2 and § 742.18 of the EAR, or the 

ITAR at 22 CFR parts 120 through 130). 

(b) Annual report requirements for 

exports and imports of Schedule 1 

chemicals. Any person subject to the 

CWCR that exported or imported any 

quantity of Schedule 1 chemical to or 

from another State Party during the 

previous calendar year has a reporting 

requirement under this section. 

(1) Annual report on exports and 

imports. Declared and undeclared 

facilities, trading companies, and any 

other person subject to the CWCR that 

exported or imported any quantity of a 

Schedule 1 chemical to or from another 

State Party in a previous calendar year 

must submit an annual report on 

exports and imports. 

(2) Report forms to submit. (i) 

Declared Schedule 1 facilities. (A) If 

your facility declared production of a 

Schedule 1 chemical and you also 

exported or imported any amount of 

that same Schedule 1 chemical, you 

must report the export or import by 

submitting either: 

(1) Combined declaration and report.

Submit, along with your declaration, 

Form 1–3 for that same Schedule 1 

chemical to be reported. Attach Form A, 

as appropriate; Form B is optional; or 

(2) Report. Submit, separately from 

your declaration, a Certification Form, 

Form 1–1, and a Form 1–3 for each 

Schedule 1 chemical to be reported. 

Attach Form A, as appropriate; Form B 

is optional. 

(B) If your facility declared 

production of a Schedule 1 chemical 

and exported or imported any amount of 

a different Schedule 1 chemical, you 

must report the export or import by 

submitting either: 

(1) Combined declaration and report.

Submit, along with your declaration, a 

Form 1–3 for each Schedule 1 chemical 

to be reported. Attach Form A, as 

appropriate; Form B is optional; or 

(2) Report. Submit, separately from 

your declaration, a Certification Form, 

Form 1–1, and a Form 1–3 for each 

Schedule 1 chemical to be reported. 

Attach Form A, as appropriate; Form B 

is optional. 

(ii) If you are an undeclared facility, 

trading company, or any other person 

subject to the CWCR, and you exported 

or imported any amount of a Schedule 

1 chemical, you must report the export 

or import by submitting a Certification 

Form, Form 1–1, and a Form 1–3 for 

each Schedule 1 chemical to be 

reported. Attach Form A, as appropriate; 

Form B is optional. 

(c) Paragraph (a) of this section does 

not apply to the activities and persons 

set forth in § 712.2(b).

§ 712.7 Amended declaration or report. 

In order for BIS to maintain accurate 

information on previously submitted 

facility declarations, including 

information necessary to facilitate 

inspection notifications and activities or 

to communicate declaration or report 

requirements, amended declarations or 

reports will be required under the 

following circumstances described in 

this section. This section applies only to 

annual declarations on past activities 

and annual reports on exports and 

imports submitted for the previous 

calendar year or annual declarations on 

anticipated activities covering the 

current calendar year, unless specified 

otherwise in a final inspection report. 

(a) Changes to information that 

directly affect inspection of a declared 

facility’s Annual Declaration of Past 

Activities (ADPA) or Annual 

Declaration on Anticipated Activities 

(ADAA). You must submit an amended 

declaration or report to BIS within 15 

days of any change in the following 

information: 

(1) Types of Schedule 1 chemicals 

produced (e.g., additional Schedule 1 

chemicals); 

(2) Quantities of Schedule 1 

chemicals produced; 

(3) Activities involving Schedule 1 

chemicals; and 

(4) End-use of Schedule 1 chemicals 

(e.g., additional end-use(s)). 

(b) Changes to export or import 

information submitted in Annual 

Reports on Exports and Imports from 

undeclared facilities, trading companies 

and U.S. persons. You must submit an 

amended report or amended combined 

declaration and report for changes to 

export or import information within 15 

days of any change in the following 

export or import information: 

(1) Types of Schedule 1 chemicals 

exported or imported (e.g., additional 

Schedule 1 chemicals); 

(2) Quantities of Schedule 1 

chemicals exported or imported; 

(3) Destination(s) of Schedule 1 

chemicals exported; 

(4) Source(s) of Schedule 1 chemicals 

imported; 

(5) Activities involving exports and 

imports of Schedule 1 chemicals; and 

(6) End-use(s) of Schedule 1 

chemicals exported or imported (e.g.,

additional end-use(s)). 

(c) Changes to company and facility 

information previously submitted to BIS 

in the ADPA, the ADAA, and the 

Annual Report on Exports and Imports.

(1) Internal company changes. You must 

70778 Federal Register / Vol. 69, No. 234 / Tuesday, December 7, 2004 / Proposed Rules 

submit an amended declaration or 

report to BIS within 30 days of any 

change in the following information: 

(i) Name of declaration/report point of 

contact (D–POC), including telephone 

number, facsimile number, and e-mail 

address; 

(ii) Name(s) of inspection point(s) of 

contact (I–POC), including telephone 

number(s), and facsimile number(s); 

(iii) Company name (see § 712.7(c)(2) 

of the CWCR for other company 

changes); 

(iv) Company mailing address; 

(v) Facility name; 

(vi) Facility owner, including 

telephone number, and facsimile 

number; and 

(vii) Facility operator, including 

telephone number, and facsimile 

number. 

(2) Change in ownership of company 

or facility. If you sold or purchased a 

declared facility or trading company, 

you must submit an amended 

declaration or report to BIS, either 

before the effective date of the change or 

within 30 days after the effective date of 

the change. The amended declaration or 

report must include the following 

information: 

(i) Information that must be submitted 

to BIS by the company selling a 

declared facility:

(A) Name of seller (i.e., name of the 

company selling a declared facility); 

(B) Name of the declared facility and 

U.S. Code Number for that facility; 

(C) Name of purchaser (i.e., name of 

the new company purchasing a declared 

facility) and identity of contact person 

for the purchaser, if known; 

(D) Date of ownership transfer or 

change; 

(E) Additional details on sale of the 

declared facility relevant to ownership 

or operational control over any portion 

of that facility (e.g., whether the entire 

facility or only a portion of the declared 

facility has been sold to a new owner); 

and 

(F) Details regarding whether the new 

owner will submit the next declaration 

or report for the entire calendar year 

during which the ownership change 

occurred, or whether the previous 

owner and new owner will submit 

separate declarations or reports for the 

periods of the calendar year during 

which each owned the facility or trading 

company. 

(1) If the new owner is responsible for 

submitting the declaration or report for 

the entire current year, it must have in 

its possession the records for the period 

of the year during which the previous 

owner owned the facility. 

(2) If the previous owner and new 

owner will submit separate declarations 

for the periods of the calendar year 

during which each owned the facility 

(‘‘part-year declarations’’), and if, at the 

time of transfer of ownership, the 

previous owner’s activities are not 

above the declaration thresholds set 

forth in §§ 712.4 and 712.5 of the 

CWCR, the previous owner and the new 

owner must still submit declarations to 

BIS with the below threshold quantities 

indicated. 

(3) If the part-year declarations 

submitted by the previous owner and 

the new owner are not, when combined, 

above the declaration threshold set forth 

in §§ 712.4 and 712.5 of the CWCR, BIS 

will return the declarations without 

action as set forth in § 712.8 of the 

CWCR. 

(4) If part-year reports are submitted 

by the previous owner and the new 

owner as required in § 712.5 of the 

CWCR, BIS will submit both reports in 

the OPCW. 

(ii) Information that must be 

submitted to BIS by the company 

purchasing a declared facility: 

(A) Name of purchaser (i.e., name of 

company purchasing a declared facility; 

(B) Mailing address of purchaser; 

(C) Name of declaration point of 

contact (D–POC) for the purchaser, 

including telephone number, facsimile 

number, and e-mail address; 

(D) Name of inspection points of 

contact (I–POC) for the purchaser, 

including telephone number(s), 

facsimile number(s) and e-mail 

address(es); 

(E) Name of the declared facility and 

U.S. Code Number for that facility; 

(F) Location of the declared facility; 

(G) Owner and operator of the 

declared facility, including telephone 

number, and facsimile number; and 

(H) Details on the next declaration or 

report submission on whether the new 

owner will submit the declaration or 

report for the entire calendar year 

during which the ownership change 

occurred, or whether the previous 

owner and new owner will submit 

separate declarations or reports for the 

periods of the calendar year during 

which each owned the facility or trading 

company. 

(1) If the new owner is taking 

responsibility for submitting the 

declaration or report for the entire 

current year, it must have in its 

possession the records for the period of 

the year during which the previous 

owner owned the facility. 

(2) If the previous owner and new 

owner will submit separate declarations 

for the periods of the calendar year 

during which each owned the facility, 

and, at the time of transfer of 

ownership, the previous owner’s 

activities are not above the declaration 

thresholds set forth in §§ 712.4 and 

712.5 of the CWCR, the previous owner 

and the new owner must still submit 

declarations to BIS with the below 

threshold quantities indicated. 

(3) If the part-year declarations 

submitted by the previous owner and 

the new owner are not, when combined, 

above the declaration threshold set forth 

in §§ 712.4 and 712.5 of the CWCR, BIS 

will return the declarations without 

action as set forth in § 712.8 of the 

CWCR. 

(4) If part-year reports are submitted 

by the previous owner and the new 

owner as required in § 712.5 of the 

CWCR, BIS will submit both reports to 

the OPCW.

Note 1 to § 712.7(c): You must submit an 

amendment to your most recently submitted 

declaration or report for declaring changes to 

internal company information (e.g., company 

name change) or changes in ownership of a 

facility or trading company that have 

occurred since the submission of this 

declaration or report. BIS will process the 

amendment to ensure current information is 

on file regarding the facility or trading 

company (e.g., for inspection notifications 

and correspondence) and will also forward 

the amended declaration to the OPCW to 

ensure that they also have current 

information on file regarding your facility or 

trading company.

Note 2 to § 712.7(c): You may notify BIS of 

change in ownership via a letter to the 

address given in § 711.6 of the CWCR. If you 

are submitting an amended declaration or 

report, use Form B to address details 

regarding the sale of the declared facility or 

trading company.

Note 3 to § 712.7(c): For ownership 

changes, the declared facility or trading 

company will maintain its original U.S. Code 

Number, unless the facility or trading 

company is sold to multiple owners, at 

which time BIS will assign new U.S. Code 

Numbers for the new facilities.

(d) Inspection-related amendments. If, 

following completion of an inspection 

(see parts 716 and 717 of the CWCR), 

you are required to submit an amended 

declaration based on the final 

inspection report, BIS will notify you in 

writing of the information that will be 

required pursuant to §§ 716.10 and 

717.5 of the CWCR. You must submit an 

amended declaration to BIS no later 

than 45 days following your receipt of 

the BIS post inspection letter.

(e) Non-substantive changes. If, 

subsequent to the submission of your 

declaration or report to BIS, you 

discover one or more non-substantive 

typographical errors in your declaration 

or report, you are not required to submit 

an amended declaration or report to BIS. 

Instead, you may correct these errors in 

a subsequent declaration or report. 

Federal Register / Vol. 69, No. 234 / Tuesday, December 7, 2004 / Proposed Rules 70779

(f) Documentation required for 

amended declarations or reports. If you 

are required to submit an amended 

declaration or report to BIS pursuant to 

paragraph (a), (b), (c), or (d) of this 

section, you must submit either: 

(1) A letter containing all of the 

corrected information required, in 

accordance with the provisions of this 

section, to amend your declaration or 

report; or 

(2) Both of the following: 

(i) A new Certification Form (i.e.,

Form 1–1); and 

(ii) The specific forms (e.g., annual 

declaration on past activities) 

containing the corrected information 

required, in accordance with the 

provisions of this part, to amend your 

declaration or report.

§ 712.8 Declarations and reports returned 

without action by BIS. 

If you submit a declaration or report 

and BIS determines that the information 

contained therein is not required by the 

CWCR, BIS will return the original 

declaration or report to you, without 

action, accompanied by a letter 

explaining BIS’s decision. In order to 

protect your confidential business 

information, BIS will not maintain a 

copy of any declaration or report that is 

returned without action (RWA). 

However, BIS will maintain a copy of 

the RWA letter.

§ 712.9 Deadlines for submission of 

Schedule 1 declarations, reports, advance 

notifications, and amendments. 

Declarations, reports, advance 

notifications, and amendments required 

under this part must be postmarked by 

the appropriate date identified in 

Supplement No. 2 to this part 712. 

Required declarations, reports, advance 

notifications, and amendments include: 

(a) Annual declaration on past 

activities (Schedule 1 chemical 

production during the previous calendar 

year); 

(b) Annual report on exports and 

imports of Schedule 1 chemicals from 

facilities, trading companies, and other 

persons (during the previous calendar 

year); 

(c) Combined declaration and report 

(production of Schedule 1 chemicals, as 

well as exports or imports of the same 

or different Schedule 1 chemicals, by a 

declared facility during the previous 

calendar year); 

(d) Annual declaration on anticipated 

activities (anticipated production of 

Schedule 1 chemicals in the next 

calendar year); 

(e) Advance notification of any export 

to or import from another State Party; 

(f) Initial declaration of a new 

Schedule 1 chemical production 

facility; and 

(g) Amended declaration or report, 

including combined declaration and 

report.

SUPPLEMENT NO. 1 TO PART 712—SCHEDULE 1 CHEMICALS

(CAS registry 

number) 

A. Toxic Chemicals

(1) O-Alkyl (≤C10, incl. cycloalkyl) alkyl (Me, Et, n-Pr or i-Pr)-phosphonofluoridates: 

e.g. Sarin: O-Isopropyl methylphosphonofluoridate .................................................................................................................... (107–44–8) 

Soman: O-Pinacolyl methylphosphonofluoridate ........................................................................................................................ (96–64–0) 

(2) O-Alkyl (≤C10, incl. cycloalkyl) N,N-dialkyl (Me, Et, n-Pr or i-Pr) phosphoramidocyanidates: 

e.g. Tabun: O-Ethyl N,N-dimethyl phosphoramidocyanidate ...................................................................................................... (77–81–6) 

(3) O-Alkyl (H or ≤C10, incl. cycloalkyl) S-2-dialkyl (Me, Et, n-Pr or i-Pr)-aminoethyl alkyl (Me, Et, n-Pr or i-Pr) 

phosphonothiolates and corresponding alkylated or protonated salts: 

e.g. VX: O-Ethyl S-2-diisopropylaminoethyl methyl phosphonothiolate ..................................................................................... (50782–69–9) 

(4) Sulfur mustards: 

2-Chloroethylchloromethylsulfide ................................................................................................................................................ (2625–76–5) 

Mustard gas: Bis(2-chloroethyl)sulfide ........................................................................................................................................ (505–60–2) 

Bis(2-chloroethylthio)methane ..................................................................................................................................................... (63869–13–6) 

Sesquimustard: 1,2-Bis(2-chloroethylthio)ethane ....................................................................................................................... (3563–36–8) 

1,3-Bis(2-chloroethylthio)-n-propane ........................................................................................................................................... (63905–10–2) 

1,4-Bis(2-chloroethylthio)-n-butane ............................................................................................................................................. (142868–93–7) 

1,5-Bis(2-chloroethylthio)-n-pentane ........................................................................................................................................... (142868–94–8) 

Bis(2-chloroethylthiomethyl)ether ................................................................................................................................................ (63918–90–1) 

O-Mustard: Bis(2-chloroethylthioethyl)ether ................................................................................................................................ (63918–89–8) 

(5) Lewisites: 

Lewisite 1: 2-Chlorovinyldichloroarsine ....................................................................................................................................... (541–25–3) 

Lewisite 2: Bis(2-chlorovinyl)chloroarsine ................................................................................................................................... (40334–69–8) 

Lewisite 3: Tris(2-chlorovinyl)arsine ............................................................................................................................................ (40334–70–1) 

(6) Nitrogen mustards: 

HN1: Bis(2-chloroethyl)ethylamine .............................................................................................................................................. (538–07–8) 

HN2: Bis(2-chloroethyl)methylamine ........................................................................................................................................... (51–75–2) 

HN3: Tris(2-chloroethyl)amine .................................................................................................................................................... (555–77–1) 

(7) Saxitoxin ........................................................................................................................................................................................ (35523–89–8) 

(8) Ricin .............................................................................................................................................................................................. (9009–86–3) 

B. Precursors

(9) Alkyl (Me, Et, n-Pr or i-Pr) phosphonyldifluorides: 

e.g. DF: Methylphosphonyldifluoride ........................................................................................................................................... (676–99–3) 

(10) O-Alkyl (H or ≤C10, incl. cycloalkyl) O-2-dialkyl (Me, Et, n-Pr or i-Pr)-aminoethyl alkyl (Me, Et, N-Pr or i-Pr) phosphonites 

and corresponding alkylated or protonated salts: 

e.g. QL: O-Ethyl O-2-diisopropylaminoethyl methylphosphonite ................................................................................................ (57856–11–8) 

(11) Chlorosarin: O-Isopropyl methylphosphonochloridate ................................................................................................................ (1445–76–7) 

(12) Chlorosoman: O-Pinacolyl methylphosphonochloridate ............................................................................................................. (7040–57–5) 

Notes to Supplement No. 1:

Note 1: Note that the following Schedule 1 chemicals are controlled for export purposes under the Export Administration Regulations (see part 

774 of the EAR, the Commerce Control List): Saxitoxin (35523–89–8) and Ricin (9009–86–3). 

Note 2: All Schedule 1 chemicals not listed in Note 1 to this Supplement are controlled for export purposes by the Office of Defense Trade 

Control of the Department of State under the International Traffic in Arms Regulations (22 CFR parts 120 through 130). 

70780 Federal Register / Vol. 69, No. 234 / Tuesday, December 7, 2004 / Proposed Rules 

SUPPLEMENT NO. 2 TO PART 712—DEADLINES FOR SUBMISSION OF SCHEDULE 1 DECLARATIONS, ADVANCE

NOTIFICATIONS, REPORTS, AND AMENDMENTS

Declarations, advance

notifications and reports Applicable forms Due dates 

Annual Declaration on Past Activities (previous 

calendar year)—Declared facility (past production) (optional).

Certification, 1–1, 1–2, 1–2A, 1–2B, A (as appropriate), B.February 28th of the year following any calendar year in which more than 100 grams 

aggregate of Schedule 1 chemicals were 

produced. 

Annual report on exports and imports (previous 

calendar year) (facility, trading company, 

other persons).

Certification, 1–1, 1–3, A (as appropriate), B 

(optional).

February 28th of the year following any calendar year in which Schedule 1 chemicals 

were exported or imported. 

Combined Declaration and Report ..................... Certification, 1–1, 1–2, 1–2A, 1–2B, 1–3, A 

(as appropriate), B (optional).

February 28th of the year following any calendar year in which Schedule 1 chemicals 

were produced, exported, or imported. 

Annual Declaration on Anticipated Activities 

(next calendar year).

Certification, 1–1, 1–4, A (as appropriate), B 

(optional).

September 3rd of the year prior to any calendar year in which Schedule 1 activities 

are anticipated to occur. 

Advance Notification of any export to or import 

from another State Party.

Notify on letterhead. See § 712.6 of the 

CWCR.

45 calendar days prior to any export or import 

of Schedule 1 chemicals, except 3 days 

prior to export or import of 5 milligrams or 

less of saxitoxin for medical/diagnostic purposes. 

Initial Declaration of a new Schedule 1 facility 

(technical description).

Certification, 1–1, A (as appropriate), B (optional).200 calendar days prior to producing in excess of 100 grams aggregate of Schedule 1 

chemicals. 

Amended Declaration .........................................

—Chemicals/activities: § 712.7(a) ......................

—Company information: § 712.7(c) ....................

—Post-inspection letter: § 712.7(d) ....................

Certification, 1–1, 1–2, 1–2A ........................... —15 calendar days after change in information 

—30 calendar days after change in information 

—45 calendar days after receipt of letter 

Amended Report § 712.7(b) ............................... Certification, 1–1, 1–3, A (as appropriate), B 

(optional.

—15 calendar days after change in information 

Combined Declaration & Report ........................ Certification, 1–1, 1–2, 1–2A 1–3, (as appropriate), B (optional).—15 calendar days after change in information 

PART 713—ACTIVITIES INVOLVING 

SCHEDULE 2 CHEMICALS

Sec. 

713.1 Prohibition on exports and imports of 

Schedule 2 chemicals to and from States 

not Party to the CWC. 

713.2 Annual declaration requirements for 

plant sites that produce, process or 

consume Schedule 2 chemicals in excess 

of specified thresholds. 

713.3 Annual declaration and reporting 

requirements for exports and imports of 

Schedule 2 chemicals. 

713.4 Advance declaration requirements for 

additionally planned production, 

processing or consumption of Schedule 

2 chemicals. 

713.5 Amended declaration or report. 

713.6 Declarations and reports returned 

without action by BIS. 

713.7 Deadlines for submission of Schedule 

2 declarations, reports, and amendments. 

Supplement No. 1 To Part 713—Scgedyke 2 

Chemicals 

Supplement No. 2 To Part 713—Deadlines 

For Submission of Schedule 2 

Declarations, Reports, And Amendments

Authority: 22 U.S.C. 6701 et seq.; 50 U.S.C. 

1601 et seq.; 50 U.S.C. 1701 et seq; E.O. 

12938, 59 FR 59099, 3 CFR, 1994 Comp., p. 

950, as amended by E.O. 13094, 63 FR 40803, 

3 CFR, 1998 Comp., p. 200; E.O. 13128, 64 

FR 36703, 3 CFR, 1999 Comp., p. 199.

§ 713.1 Prohibition on exports and imports 

of Schedule 2 chemicals to and from States 

not Party to the CWC. 

(a) You may not export any Schedule 

2 chemical (see Supplement No. 1 to 

this part) to any destination or import 

any Schedule 2 chemical from any 

destination other than a State Party to 

the Convention. See Supplement No. 1 

to part 710 of this subchapter for a list 

of States that are party to the 

Convention.

Note to paragraph (a): See § 742.18 of the 

Export Administration Regulations (15 CFR 

part 742) for prohibitions that apply to 

exports of Schedule 2 chemicals to States not 

Party to the CWC.

(b) Paragraph (a) of this section does 

not apply to: 

(1) The export or import of a Schedule 

2 chemical to or from a State not Party 

to the CWC by a department, agency, or 

other entity of the United States, or by 

any person, including a member of the 

Armed Forces of the United States, who 

is authorized by law, or by an 

appropriate officer of the United States 

to transfer or receive the Schedule 2 

chemical; 

(2) Mixtures containing Schedule 2A 

chemicals, if the concentration of each 

Schedule 2A chemical in the mixture is 

1% or less by weight (note, however, 

that such mixtures may be subject to the 

regulatory requirements of other federal 

agencies); 

(3) Mixtures containing Schedule 2B 

chemicals if the concentration of each 

Schedule 2B chemical in the mixture is 

10% or less by weight (note, however, 

that such mixtures may be subject to the 

regulatory requirements of other federal 

agencies); or 

(4) Products identified as consumer 

goods packaged for retail sale for 

personal use or packaged for individual 

use.

§ 713.2 Annual declaration requirements 

for plant sites that produce, process or 

consume Schedule 2 chemicals in excess 

of specified thresholds. 

(a) Declaration of production, 

processing or consumption of Schedule 

2 chemicals for purposes not prohibited 

by the CWC.

(1) Quantities of production, 

processing or consumption that trigger 

declaration requirements. You must 

complete the forms specified in 

paragraph (b) of this section if you have 

been or will be involved in the 

following activities: 

(i) Annual declaration on past 

activities. (A) You produced, processed 

or consumed at one or more plants on 

your plant site during any of the 

Federal Register / Vol. 69, No. 234 / Tuesday, December 7, 2004 / Proposed Rules 70781

previous three calendar years, a 

Schedule 2 chemical in excess of any of 

the following declaration threshold 

quantities: 

(1) 1 kilogram of chemical BZ: 3–

Quinuclidinyl benzilate (see Schedule 

2, paragraph A.3 in Supplement No. 1 

to this part); 

(2) 100 kilograms of chemical PFIB: 

1,1,3,3,3–Pentafluoro2(trifluoromethyl)-1-propene or 100 

kilograms of chemical Amiton: 0,0-

Diethyl S-[2-(diethylamino) ethyl] 

phosphorothiolate and corresponding 

alkylated or protonated salts (see

Schedule 2, paragraphs A.1 and A.2 in 

Supplement No. 1 to this part); or 

(3) 1 metric ton of any chemical listed 

in Schedule 2, Part B (see Supplement 

No. 1 to this part). 

(B) In order to trigger a declaration 

requirement for a past activity (i.e., 

production, processing or consumption) 

involving a Schedule 2 chemical, a 

plant on your plant site must have 

exceeded the applicable declaration 

threshold for that particular activity 

during one or more of the previous three 

calendar years. For example, if a plant 

on your plant site produced 800 

kilograms of thiodiglycol and consumed 

300 kilograms of the same Schedule 2 

chemical, during the previous calendar 

year, you would not have a declaration 

requirement based on these activities, 

because neither activity at your plant 

would have exceeded the declaration 

threshold of 1 metric ton for that 

Schedule 2 chemical. However, a 

declaration requirement would apply if 

an activity involving a Schedule 2 

chemical at the plant exceeded the 

declaration threshold in an earlier year 

(i.e., during the course of any other 

calendar year within the past three 

calendar years), as indicated in the 

example provided in the note to this 

paragraph.

Note to paragraph (a)(1)(i)(B): To 

determine whether or not you have an annual 

declaration on past activities requirement for 

Schedule 2 chemicals, you must determine 

whether you produced, processed or 

consumed a Schedule 2 chemical above the 

applicable threshold at one or more plants on 

your plant site in any one of the three 

previous calendar years. For example, for the 

2004 annual declaration on past activities 

period, if you determine that one plant on 

your plant site produced greater than 1 

kilogram of the chemical BZ in calendar year 

2002, and no plants on your plant site 

produced, processed or consumed any 

Schedule 2 chemical above the applicable 

threshold in calendar years 2003 or 2004, you 

still have a declaration requirement under 

this paragraph for the previous calendar year 

(2004). However, you must only declare on 

Form 2–3 (question 2–3.1), production data 

for calendar year 2004. You would declare 

‘‘0’’ production because you did not produce 

BZ above the applicable threshold in 

calendar year 2004. Since the plant site did 

not engage in any other declarable activity 

(i.e., consumption, processing) in the 2002–

2004 declaration period, you would leave 

blank questions 2–3.2 and 2–3.3 on Form 2–

3. Note that declaring a ‘‘0’’ production 

quantity for 2004, as opposed to leaving the 

question blank, permits BIS to distinguish 

the activity that triggered the declaration 

requirement from activities that were not 

declarable during that period.

(ii) Annual declaration on anticipated 

activities. You anticipate that you will 

produce, process or consume at one or 

more plants on your plant site during 

the next calendar year, a Schedule 2 

chemical in excess of the applicable 

declaration threshold set forth in 

paragraphs (a)(1)(i)(A)(1) through (3) of 

this section.

Note to paragraph (a)(1)(ii): A null ‘‘0’’

declaration is not required if you do not plan 

to produce, process or consume a Schedule 

2 chemical in the next calendar year.

(2) Schedule 2 chemical production.

(i) For the purpose of determining 

Schedule 2 production, you must 

include all steps in the production of a 

chemical in any units within the same 

plant through chemical reaction, 

including any associated processes (e.g., 

purification, separation, extraction, 

distillation, or refining) in which the 

chemical is not converted into another 

chemical. The exact nature of any 

associated process (e.g., purification, 

etc.) is not required to be declared. 

(ii) For the purpose of determining if 

a Schedule 2 chemical is subject to 

declaration, you must declare an 

intermediate Schedule 2 chemical, but 

not a transient intermediate Schedule 2 

chemical.

(3) Mixtures containing a Schedule 2 

chemical. (i) Mixtures that must be 

counted. You must count the quantity of 

each Schedule 2 chemical in a mixture, 

when determining the total quantity of 

a Schedule 2 chemical produced, 

processed, or consumed at a plant on 

your plant site, if the concentration of 

each Schedule 2 chemical in the 

mixture is 30% or more by volume or 

by weight, whichever yields the lesser 

percent. Do not count a Schedule 2 

chemical in the mixture that represents 

less than 30% by volume or by weight. 

(ii) How to count the quantity of each 

Schedule 2 chemical in a mixture. If 

your mixture contains 30% or more 

concentration of a Schedule 2 chemical, 

you must count the quantity (weight) of 

each Schedule 2 chemical in the 

mixture, not the total weight of the 

mixture. You must separately declare 

each Schedule 2 chemical with a 

concentration in the mixture that is 30% 

or more and exceeds the quantity 

threshold detailed in paragraphs 

(a)(1)(i)(A)(1) through (3) of this section. 

(iii) Determining declaration 

requirements for production, processing 

and consumption. If the total quantity of 

a Schedule 2 chemical produced, 

processed or consumed at a plant on 

your plant site, including mixtures that 

contain 30% or more concentration of a 

Schedule 2 chemical, exceeds the 

applicable declaration threshold set 

forth in paragraphs (a)(1)(i)(A)(1) 

through (3) of this section, you have a 

declaration requirement. For example, if 

during calendar year 2001, a plant on 

your plant site produced a mixture 

containing 300 kilograms of thiodiglycol 

in a concentration of 32% and also 

produced 800 kilograms of thiodiglycol, 

the total amount of thiodiglycol 

produced at that plant for CWCR 

purposes would be 1100 kilograms, 

which exceeds the declaration threshold 

of 1 metric ton for that Schedule 2 

chemical. You must declare past 

production of thiodiglycol at that plant 

site for calendar year 2001. If, on the 

other hand, a plant on your plant site 

processed a mixture containing 300 

kilograms of thiodiglycol in a 

concentration of 25% and also 

processed 800 kilograms of thiodiglycol 

in other than mixture form, the total 

amount of thiodiglycol processed at that 

plant for CWCR purposes would be 800 

kilograms and would not trigger a 

declaration requirement. This is because 

the concentration of thiodiglycol in the 

mixture is less than 30% and therefore 

did not have to be ‘‘counted’’ and added 

to the other 800 kilograms of processed 

thiodiglycol at that plant. 

(b) Types of declaration forms to be 

used. (1) Annual declaration on past 

activities. You must complete the 

Certification Form and Forms 2–1, 2–2, 

2–3, 2–3A, and Form A if one or more 

plants on your plant site produced, 

processed or consumed more than the 

applicable threshold quantity of a 

Schedule 2 chemical described in 

paragraphs (a)(1)(i)(A)(1) through (3) of 

this section in any of the three previous 

calendar years. Form B is optional. If 

you are subject to annual declaration 

requirements, you must include data for 

the previous calendar year only. 

(2) Annual declaration on anticipated 

activities. You must complete the 

Certification Form and Forms 2–1, 2–2, 

2–3, 2–3A, 2–3C, and Form A if you 

plan to produce, process, or consume at 

any plant on your plant site a Schedule 

2 chemical above the applicable 

threshold set forth in paragraphs 

(a)(1)(i)(A)(1) through (3) of this section 

during the following calendar year. 

Form B is optional.

70782 Federal Register / Vol. 69, No. 234 / Tuesday, December 7, 2004 / Proposed Rules 

(c) Quantities to be declared. (1) 

Production, processing and 

consumption of a Schedule 2 chemical 

above the declaration threshold.

(i) Annual declaration on past 

activities. If you are required to 

complete forms pursuant to paragraph 

(a)(1)(i) of this section, you must declare 

the aggregate quantity resulting from 

each type of activity (production, 

processing or consumption) from each 

plant on your plant site that exceeds the 

applicable threshold for that Schedule 2 

chemical. Do not include in these 

aggregate production, processing, and 

consumption quantities any data from 

plants on the plant site that did not 

individually produce, process or 

consume a Schedule 2 chemical in 

amounts greater than the applicable 

threshold. For example, if a plant on 

your plant site produced a Schedule 2 

chemical in an amount greater than the 

applicable declaration threshold during 

the previous calendar year, you would 

have to declare only the production 

quantity from that plant, provided that 

the total amount of the Schedule 2 

chemical processed or consumed at the 

plant did not exceed the applicable 

declaration threshold during any one of 

the previous three calendar years. If in 

the previous calendar year your 

production, processing and 

consumption activities all were below 

the applicable declaration threshold, but 

your declaration requirement is 

triggered because of production 

activities occurring in an earlier year, 

you would declare ‘‘0’’ only for the 

declared production activities. 

(ii) Annual declaration on anticipated 

activities. If you are required to 

complete forms pursuant to paragraph 

(a)(1)(ii) of this section, you must 

declare the aggregate quantity of any 

Schedule 2 chemical that you plan to 

produce, process or consume at any 

plant(s) on your plant site above the 

applicable thresholds set forth in 

paragraphs (a)(1)(i)(A)(1) through (3) of 

this section during the next calendar 

year. Do not include in these anticipated 

aggregate production, processing, and 

consumption quantities any data from 

plants on the plant site that you do not 

anticipate will individually produce, 

process or consume a Schedule 2 

chemical in amounts greater than the 

applicable thresholds. 

(2) Rounding. For the chemical BZ, 

report quantities to the nearest 

hundredth of a kilogram (10 grams). For 

PFIB and the Amiton family, report 

quantities to the nearest 1 kilogram. For 

all other Schedule 2 chemicals, report 

quantities to the nearest 10 kilograms. 

(d) ‘‘Declared’’ Schedule 2 plant site.

A plant site that submitted a declaration 

pursuant to paragraph (a)(1) of this 

section is a ‘‘declared’’ plant site. 

(e) Declared Schedule 2 plant sites 

subject to initial and routine 

inspections. A ‘‘declared’’ Schedule 2 

plant site is subject to initial and routine 

inspection by the Organization for the 

Prohibition of Chemical Weapons if it 

produced, processed or consumed in 

any of the three previous calendar years, 

or is anticipated to produce, process or 

consume in the next calendar year, in 

excess of ten times the applicable 

declaration threshold set forth in 

paragraphs (a)(1)(i)(A)(1) through (3) of 

this section (see part 716 of this 

subchapter). A ‘‘declared’’ Schedule 2 

plant site that has received an initial 

inspection is subject to routine 

inspection.

§ 713.3 Annual declaration and reporting 

requirements for exports and imports of 

Schedule 2 chemicals. 

(a) Declarations and reports of exports 

and imports of Schedule 2 chemicals.

(1) Declarations. A Schedule 2 plant site 

that is declared because it produced, 

processed or consumed a Schedule 2 

chemical at one or more plants above 

the applicable threshold set forth in 

paragraph (b) of this section, and also 

exported from or imported to the plant 

site that same Schedule 2 chemical 

above the applicable threshold, must 

submit export and import information 

as part of its declaration. 

(2) Reports. The following persons 

must submit a report if they 

individually exported or imported a 

Schedule 2 chemical above the 

applicable threshold indicated in 

paragraph (b) of this section: 

(i) A declared plant site that exported 

or imported a Schedule 2 chemical that 

was different than the Schedule 2 

chemical produced, processed or 

consumed at one or more plants at the 

plant site above the applicable 

declaration threshold ; 

(ii) An undeclared plant site; 

(iii) A trading company; or 

(iv) Any other person subject to the 

CWCR.

Note to paragraphs (a)(1) and (a)(2)(i): A 

declared Schedule 2 plant site may need to 

declare exports or imports of Schedule 2 

chemicals that it produced, processed or 

consumed above the applicable threshold 

and also report exports or imports of different 

Schedule 2 chemicals that it did not produce, 

process or consume above the applicable 

threshold quantities. The report may be 

submitted to BIS either with or separately 

from the annual declaration on past activities 

(see § 713.3(d) of the CWCR).

Note to paragraph (a)(2): The U.S. 

Government will not submit to the OPCW 

company-specific information relating to the 

export or import of Schedule 2 chemicals 

contained in reports. The U.S. Government 

will add all export and import information 

contained in reports to export and import 

information contained in declarations to 

establish the U.S. national aggregate 

declaration on exports and imports.

Note to paragraphs (a)(1) and (2): Declared 

and undeclared plant sites must count, for 

declaration or report purposes, all exports 

from and imports to the entire plant site, not 

only from or to individual plants on the plant 

site.

(b) Quantities of exports or imports 

that trigger a declaration or report 

requirement. (1) You have a declaration 

or report requirement and must 

complete the forms specified in 

paragraph (d) of this section if you 

exported or imported a Schedule 2 

chemical in excess of the following 

threshold quantities: 

(i) 1 kilogram of chemical BZ: 3-

Quinuclidinyl benzilate (See Schedule 

2, paragraph A.3 included in 

Supplement No. 1 to this part); 

(ii) 100 kilograms of chemical PFIB: 

1,1,3,3,3-Pentafluoro-2(trifluoromethyl)-

1-propene or 100 kilograms of Amiton : 

O,O Diethyl S-[2(diethylamino)ethyl] 

phosphorothiolate and corresponding 

alkylated or protonated salts (see

Schedule 2, paragraphs A.1 and A.2 

included in Supplement No.1 to this 

part); or 

(iii) 1 metric ton of any chemical 

listed in Schedule 2, Part B (see

Supplement No.1 to this part). 

(2) Mixtures containing a Schedule 2 

chemical. The quantity of each 

Schedule 2 chemical contained in a 

mixture must be counted for the 

declaration or reporting of an export or 

import only if the concentration of each 

Schedule 2 chemical in the mixture is 

30% or more by volume or by weight, 

whichever yields the lesser percent. You 

must declare separately each Schedule 2 

chemical whose concentration in the 

mixture is 30% or more.

Note 1 to paragraph (b)(2): See 

§ 713.2(a)(2)(ii) for information on counting 

amounts of Schedule 2 chemicals contained 

in mixtures and determining declaration and 

report requirements.

Note 2 to paragraph (b)(2): The ‘‘30% and 

above’’ mixtures rule applies only for 

declaration and report purposes. This rule 

does not apply for purposes of determining 

whether the export of your mixture to a nonState Party requires an End-Use Certificate or 

for determining whether you need an export 

license from BIS (see § 742.2, § 742.18 and 

§ 745.2 of the Export Administration 

Regulations) or from the Department of State 

(see the International Traffic in Arms 

Regulations (22 CFR parts 120 through130)).

Federal Register / Vol. 69, No. 234 / Tuesday, December 7, 2004 / Proposed Rules 70783

(c) Declaration and report 

requirements. (1) Annual declaration on 

past activities. A plant site described in 

paragraph (a)(1) that has an annual 

declaration requirement for production, 

processing, or consumption of a 

Schedule 2 chemical for the previous 

calendar year also must declare the 

export and/or import of that same 

Schedule 2 chemical if the amount 

exceeded the applicable threshold set 

forth in paragraph (b) of this section. 

The plant site must declare such export 

or import information as part of its 

annual declaration of past activities. 

(2) Annual report on exports and 

imports. Declared plant sites described 

in paragraph (a)(2)(i) of this section, and 

undeclared plant sites, trading 

companies or any other person 

(described in paragraphs (a)(2)(ii) 

through (iv) of this section) subject to 

the CWCR that exported or imported a 

Schedule 2 chemical in a previous 

calendar year in excess of the applicable 

thresholds set forth in paragraph (b) of 

this section must submit an annual 

report on such exports or imports. 

(d) Types of declaration and report 

forms to be used. (1) Annual declaration 

on past activities. If you are a declared 

Schedule 2 plant site, as described in 

paragraph (a)(1) of this section, you 

must complete Form 2–3B, in addition 

to the forms required by § 713.2(b)(1) of 

the CWCR, for each declared Schedule 

2 chemical exported or imported above 

the applicable threshold in the previous 

calendar year. 

(2) Annual report on exports and 

imports. (i) If you are a declared plant 

site, as described in paragraph (a)(2)(i) 

of this section, you may fulfill your 

annual reporting requirements by: 

(A) Submitting, with your annual 

declaration on past activities, a Form 2–

3B for each Schedule 2 chemical you 

exported or imported above the 

applicable threshold. Attach Form A, as 

appropriate; Form B is optional; or 

(B) Submitting, separately from your 

annual declaration on past activities, a 

Certification Form, Form 2–1, and Form 

2–3B for each Schedule 2 chemical you 

exported or imported above the 

applicable threshold. Attach Form A, as 

appropriate; Form B is optional. 

(ii) If you are an undeclared plant site, 

trading company or any other person 

subject to the CWCR, you must 

complete the Certification Form, Form 

2–1, and Form 2–3B for each Schedule 

2 chemical you exported or imported 

above the applicable threshold. Attach 

Form A, as appropriate; Form B is 

optional. 

(e) Quantities to be declared. (1) 

Calculations. If you exported from or 

imported to your plant site, trading 

company, or other location more than 

the applicable threshold of a Schedule 

2 chemical in the previous calendar 

year, you must declare or report all 

exports and imports of that chemical by 

country of destination or country of 

origin, respectively, and indicate the 

total amount exported to or imported 

from each country. 

(2) Rounding. For purposes of 

declaring or reporting exports and 

imports of a Schedule 2 chemical, you 

must total all exports and imports per 

calendar year per recipient or source 

and then round as follows: for the 

chemical BZ, the total quantity for each 

country of destination or country of 

origin (source) should be reported to the 

nearest hundredth of a kilogram (10 

grams); for PFIB and Amiton and 

corresponding alkylated or protonated 

salts, the quantity for each destination 

or source should be reported to the 

nearest 1 kilogram; and for all other 

Schedule 2 chemicals, the total quantity 

for each destination or source should be 

reported to the nearest 10 kilograms.

§ 713.4 Advance declaration requirements 

for additionally planned production, 

processing, or consumption of Schedule 2 

chemicals. 

(a) Declaration requirements for 

additionally planned activities. (1) You 

must declare additionally planned 

production, processing, or consumption 

of Schedule 2 chemicals after the annual 

declaration on anticipated activities for 

the next calendar year has been 

delivered to BIS if: 

(i) You plan that a previously 

undeclared plant on your plant site 

under § 713.2(a)(1)(ii) will produce, 

process, or consume a Schedule 2 

chemical above the applicable 

declaration threshold; 

(ii) You plan to produce, process, or 

consume at a plant declared under 

§ 713.2(a)(1)(ii) an additional Schedule 

2 chemical above the applicable 

declaration threshold; 

(iii) You plan an additional activity 

(production, processing, or 

consumption) at your declared plant 

above the applicable declaration 

threshold for a chemical declared under 

§ 713.2(a)(1)(ii); 

(iv) You plan to increase the 

production, processing, or consumption 

of a Schedule 2 chemical by a plant 

declared under § 713.2(a)(1)(ii) from the 

amount exceeding the applicable 

declaration threshold to an amount 

exceeding the applicable inspection 

threshold (see § 716.1(b)(2) of the 

CWCR); 

(v) You plan to change the starting or 

ending date of anticipated production, 

processing, or consumption declared 

under § 713.2(a)(1)(ii) by more than 

three months; or 

(vi) You plan to increase your 

production, processing, or consumption 

of a Schedule 2 chemical by a declared 

plant site by 20 percent or more above 

that declared under § 713.2(a)(1)(ii). 

(2) If you must submit a declaration 

on additionally planned activities 

because you plan to engage in any of the 

activities listed in paragraphs (a)(1)(i) 

through (vi) of this section, you also 

should declare changes to your 

declaration relating to the following 

activities. You do not have to submit an 

additionally planned declaration if you 

are only changing the following nonquantitative activities: 

(i) Changes to the plant’s production 

capacity; 

(ii) Changes or additions to the 

product group codes for the plant site or 

the plant(s); 

(iii) Changes to the plant’s activity 

status (i.e., dedicated, multipurpose, or 

other status); 

(iv) Changes to the plant’s 

multipurpose activities; 

(v) Changes to the plant site’s status 

relating to domestic transfer of the 

chemical; 

(vi) Changes to the plant site’s 

purposes for which the chemical will be 

produced, processed or consumed; or 

(vii) Changes to the plant site’s status 

relating to exports of the chemical or the 

addition of new countries for export. 

(b) Declaration forms to be used. If 

you are required to declare additionally 

planned activities pursuant to paragraph 

(a) of this part, you must complete the 

Certification Form and Forms 2–1, 2–2, 

2–3, and 2–3C as appropriate. Such 

forms are due to BIS at least 15 days 

prior to beginning the additional 

activity.

§ 713.5 Amended declaration or report. 

In order for BIS to maintain accurate 

information on previously submitted 

plant site declarations, including 

information necessary to facilitate 

inspection notifications and activities or 

to communicate declaration or report 

requirements, amended declarations or 

reports will be required under the 

circumstances described in this section. 

This section applies only to annual 

declarations on past activities submitted 

for the three previous calendar years, 

annual reports on exports and imports 

for the previous calendar year or annual 

declarations on anticipated activities 

covering the current calendar year, 

unless specified otherwise in a final 

inspection report.

(a) Changes to information that 

directly affect inspection of a declared 

plant site’s Annual Declaration of Past 

70784 Federal Register / Vol. 69, No. 234 / Tuesday, December 7, 2004 / Proposed Rules 

Activities (ADPA) or Combined Annual 

Declaration and Report. You must 

submit an amended declaration or 

report to BIS within 15 days of any 

change in the following information: 

(1) Types of Schedule 2 chemicals 

produced, processed, or consumed; 

(2) Quantities of Schedule 2 

chemicals produced, processed, or 

consumed; 

(3) Activities involving Schedule 2 

chemicals (production, processing, 

consumption); 

(4) End-use of Schedule 2 chemicals 

(e.g., additional end-use(s)); 

(5) Product group codes for Schedule 

2 chemicals produced, processed, or 

consumed; 

(6) Production capacity for 

manufacturing a specific Schedule 2 

chemical at particular plant site; 

(7) Exports or imports (e.g., changes in 

the types of Schedule 2 chemicals 

exported or imported or in the quantity, 

recipients, or sources of such 

chemicals); 

(8) Domestic transfers (e.g., changes in 

the types of Schedule 2 chemicals, types 

of destinations, or product group codes); 

and 

(9) Addition of new plant(s) for the 

production, processing, or consumption 

of Schedule 2 chemicals. 

(b) Changes to export or import 

information submitted in Annual 

Reports on Exports and Imports from 

undeclared plant sites, trading 

companies and U.S. persons. You must 

submit an amended report or amended 

combined declaration and report to BIS 

within 15 days of any change in the 

following export or import information: 

(1) Types of Schedule 2 chemicals 

exported or imported (additional 

Schedule 2 chemicals); 

(2) Quantities of Schedule 2 

chemicals exported or imported; 

(3) Destination(s) of Schedule 2 

chemicals exported; 

(4) Source(s) of Schedule 2 chemicals 

imported; and 

(5) End-use(s) of Schedule 2 

chemicals imported or exported (e.g.,

addition of new end-use(s)). 

(c) Changes to company and plant site 

information that must be maintained by 

BIS for the ADPA, Annual Declaration 

on Anticipated Activities (ADAA), and 

the Annual Report on Exports and 

Imports. (1) Internal company changes.

You must submit an amended 

declaration or report to BIS within 30 

days of any change in the following 

information: 

(i) Name of declaration/report point of 

contact (D–POC), including telephone 

number, facsimile number, and e-mail 

address; 

(ii) Name(s) of inspection point(s) of 

contact (I–POC), including telephone 

number(s), facsimile number(s) and email address(es); 

(iii) Company name (see paragraph 

(c)(2) of this section for other company 

changes); 

(iv) Company mailing address; 

(v) Plant site name; 

(vi) Plant site owner, including 

telephone number, and facsimile 

number; 

(vii) Plant site operator, including 

telephone number, and facsimile 

number; 

(viii) Plant name; 

(ix) Plant owner, including telephone 

number, and facsimile number; and 

(x) Plant operator, including 

telephone number and facsimile 

number. 

(2) Change in ownership of company, 

plant site, or plant. If you sold or

purchased a declared plant site, plant, 

or trading company you must submit an 

amended declaration or report to BIS, 

either before the effective date of the 

change or within 30 days after the 

effective date of the change. The 

amended declaration or report much 

include the following information: 

(i) Information that must be submitted 

to BIS by the company selling a 

declared plant site: 

(A) Name of seller (i.e., name of the 

company selling a declared plant site); 

(B) Name of the declared plant site 

and U.S. Code Number for that plant 

site; 

(C) Name of purchaser (i.e., name of 

the new company/owner purchasing a 

declared plant site) and identity of 

contact person for the purchaser, if 

known; 

(D) Date of ownership transfer or 

change; 

(E) Additional (e.g., unique) details on 

the sale of the declared plant site 

relevant to ownership or operational 

control over any portion of the declared 

plant site (e.g., whether the entire plant 

site or only a portion of the declared 

plant site has been sold to a new 

owner); and 

(F) Details regarding whether the new 

owner will submit the next declaration 

or report for the entire calendar year 

during which the ownership change 

occurred, or whether the previous 

owner and new owner will submit 

separate declarations or reports for the 

periods of the calendar year during 

which each owned the plant site or 

trading company. 

(1) If the new owner is responsible for 

submitting the declaration or report for 

the entire current year, it must have in 

its possession the records for the period 

of the year during which the previous 

owner owned the plant site. 

(2) If the previous owner and new 

owner will submit separate declarations 

or reports for the periods of the calendar 

year during which each owned the plant 

site, and, if at the time of transfer of 

ownership, the previous owner’s 

activities are not above the declaration 

or report thresholds set forth in 

§ 713.2(a)(1)(i)(A)(1) through (3) and 

§ 713.3(b)(1)(i) through (iii) of the 

CWCR, respectively, the previous owner 

and the new owner must still submit 

declarations to BIS with the below 

threshold quantities indicated. 

(3) If the part-year declarations 

submitted by the previous owner and 

the new owner are not, when combined, 

above the declaration thresholds set 

forth in § 713.2(a)(1)(i)(A)(1) through (3) 

of the CWCR, BIS will return the 

declarations without action as set forth 

in § 713.6 of the CWCR. 

(4) If part-year reports submitted by 

the previous owner and the new owner 

are not, when combined, above the 

thresholds in §§ 713.3(b)(1)(i) through 

(iii) of the CWCR, BIS will return the 

reports without action as set forth in 

§ 713.6 of the CWCR. 

(ii) Information that must be 

submitted to BIS by the company 

purchasing a declared plant site: 

(A) Name of purchaser (i.e., name of 

individual or company purchasing a 

declared plant site); 

(B) Mailing address of purchaser; 

(C) Name of declaration point of 

contact (D–POC) for the purchaser, 

including telephone number, facsimile 

number, and e-mail address; 

(D) Name of inspection point(s) of 

contact (I–POC) for the purchaser, 

including telephone number(s), 

facsimile number(s) and e-mail 

address(es); 

(E) Name of the declared plant site 

and U.S. Code Number for that plant 

site; 

(F) Location of the declared plant site; 

(G) Owner of the declared plant site, 

including telephone number, and 

facsimile number; 

(H) Operator of the declared plant 

site, including telephone number, and 

facsimile number; 

(I) Name of plant(s) where Schedule 2 

activities exceed the applicable 

declaration threshold;

(J) Owner and operator of plant(s) 

where Schedule 2 activities exceed the 

applicable declaration threshold, 

including telephone numbers, and 

facsimile numbers; 

(K) Location of the plant where 

Schedule 2 activities exceed the 

applicable declaration threshold; and 

(L) Details on the next declaration or 

report submission on whether the new 

owner will submit the declaration or 

report for the entire calendar year 

during which the ownership change 

Federal Register / Vol. 69, No. 234 / Tuesday, December 7, 2004 / Proposed Rules 70785

occurred, or whether the previous 

owner and new owner will submit 

separate declarations or reports for the 

periods of the calendar year during 

which each owned the plant site or 

trading company.

Note 1 to § 713.5(c): You must submit an 

amendment to your most recently submitted 

declaration or report for declaring changes to 

internal company information (e.g., company 

name change) or changes in ownership of a 

facility or trading company that have 

occurred since the submission of this 

declaration or report. BIS will process the 

amendment to ensure current information is 

on file regarding the facility or trading 

company (e.g., for inspection notifications 

and correspondence) and will also forward 

the amended declaration to the OPCW to 

ensure that they also have current 

information on file regarding your facility or 

trading company.

Note 2 to § 713.5(c): You may notify BIS of 

change in ownership via a letter to the 

address given in § 711.6 of the CWCR. If you 

are submitting an amended declaration or 

report, use Form B to address details 

regarding the sale of the declared plant site 

or trading company.

Note 3 to § 713.5(c): For ownership 

changes, the declared facility or trading 

company will maintain its original U.S. Code 

Number, unless the plant site or trading 

company is sold to multiple owners, at 

which time BIS will assign new U.S. Code 

Numbers.

(d) Inspection-related amendments. If, 

following the completion of an 

inspection (see parts 716 and 717 of the 

CWCR), you are required to submit an 

amended declaration based on the final 

inspection report, BIS will notify you in 

writing of the information that will be 

required pursuant to §§ 716.10 and 

717.5 of the CWCR. You must submit an 

amended declaration to BIS no later 

than 45 days following your receipt of 

BIS’s post inspection letter. 

(e) Non-substantive changes. If, 

subsequent to the submission of your 

declaration or report to BIS, you 

discover one or more non-substantive 

typographical errors in your declaration 

or report, you are not required to submit 

an amended declaration or report to BIS. 

Instead, you may correct these errors in 

a subsequent declaration or report. 

(f) Documentation required for 

amended declarations or reports. If you 

are required to submit an amended 

declaration or report to BIS pursuant to 

paragraph (a), (b), (c), or (d) of this 

section, you must submit either: 

(1) A letter containing all of the 

corrected information required, in 

accordance with the provisions of this 

section, to amend your declaration or 

report; or 

(2) Both of the following: 

(i) A new Certification Form; and 

(ii) The specific forms required for the 

declaration or report type being 

amended (e.g., annual declaration on 

past activities) containing the corrected 

information required, in accordance 

with the requirements of this section, to 

amend your declaration or report.

§ 713.6 Declarations and reports returned 

without action by BIS. 

If you submit a declaration or report 

and BIS determines that the information 

contained therein is not required by the 

CWCR, BIS will return the original 

declaration or report to you, without 

action, accompanied by a letter 

explaining BIS’s decision. In order to 

protect your confidential business 

information, BIS will not maintain a 

copy of any declaration or report that is 

returned without action (RWA). 

However, BIS will maintain a copy of 

the RWA letter.

§ 713.7 Deadlines for submission of 

Schedule 2 declarations, reports, and 

amendments. 

Declarations, reports, and 

amendments required under this part 

must be postmarked by the appropriate 

date identified in Supplement No. 2 to 

this part 713. Required declarations, 

reports, and amendments include: 

(a) Annual declaration on past 

activities (production, processing, or 

consumption) of Schedule 2 chemicals 

during the previous calendar year); 

(b) Annual report on exports and 

imports of Schedule 2 chemicals by 

plant sites, trading companies, and 

other persons subject to the CWCR 

(during the previous calendar year); 

(c) Combined declaration and report 

(production, processing, or 

consumption of Schedule 2 chemicals, 

as well as exports or imports of the same 

or different Schedule 2 chemicals, by a 

declared plant site during the previous 

calendar year); 

(d) Annual declaration on anticipated 

activities (production, processing or 

consumption) involving Schedule 2 

chemicals during the next calendar year; 

(e) Declaration on Additionally 

Planned Activities (production, 

processing or consumption) involving 

Schedule 2 chemicals; and 

(f) Amended declaration and report, 

including combined declaration and 

report.

SUPPLEMENT NO. 1 TO PART 713—SCHEDULE 2 CHEMICALS

(CAS registry 

number) 

A. Toxic Chemicals

(1) Amiton: O,O-Diethyl S-[2-(diethylamino)ethyl] phosphorothiolate ................................................................................................ (78–53–5) and 

corresponding 

alkylated or 

protonated 

salts 

(2) PFIB: 1,1,3,3,3-Pentafluoro-2-(trifluoromethyl)-1-propene ........................................................................................................... (382–21–8) 

(3) BZ: 3-Quinuclidinyl benzilate ........................................................................................................................................................ (6581–06–2)

B. Precursors

(4) Chemicals, except for those listed in Schedule 1, containing a phosphorus atom to which is bonded one methyl, ethyl or 

propyl (normal or iso) group but not further carbon atoms: 

e.g. Methylphosphonyl dichloride ................................................................................................................................................ (676–97–1) 

Dimethyl methylphosphonate ...................................................................................................................................................... (756–79–6) 

Exemption: Fonofos: O-Ethyl S-phenyl ethylphosphono-thiolothionate ............................................................................................. (944–22–9) 

(5) N,N-Dialkyl (Me, Et, n-Pr or i-Pr) phosphoramidic dihalides. 

(6) Dialkyl (Me, Et, n-Pr or i-Pr) N,N-dialkyl (Me, Et, n-Pr or i-Pr)-phosphoramidates. 

(7) Arsenic trichloride ......................................................................................................................................................................... (7784–34–1) 

(8) 2,2-Diphenyl-2-hydroxyacetic acid ................................................................................................................................................ (76–93–7) 

(9) Quinuclidine-3-ol ........................................................................................................................................................................... (1619–34–7) 

(10) N,N-Dialkyl (Me, Et, n-Pr or i-Pr) aminoethyl-2-chlorides and corresponding protonated salts. 

70786 Federal Register / Vol. 69, No. 234 / Tuesday, December 7, 2004 / Proposed Rules 

SUPPLEMENT NO. 1 TO PART 713—SCHEDULE 2 CHEMICALS—Continued

(CAS registry 

number) 

(11) N,N-Dialkyl (Me, Et, n-Pr or i-Pr) aminoethane-2-ols and corresponding protonated salts. 

Exemptions: N,N-Dimethylaminoethanol and corresponding protonated salts .......................................................................... (108–01–0) 

N,N-Diethylaminoethanol and corresponding protonated salts .................................................................................................. (100–37–8) 

(12) N,N-Dialkyl (Me, Et, n-Pr or i-Pr) aminoethane-2-thiols and corresponding protonated salts. 

(13) Thiodiglycol: Bis(2-hydroxyethyl)sulfide ...................................................................................................................................... (111–48–8) 

(14) Pinacolyl alcohol: 3,3-Dimethylbutane-2-ol ................................................................................................................................. (464–07–3) 

Notes to Supplement No. 1

Note 1: Note that the following Schedule 2 chemicals are controlled for export purposes by the Office of Defense Trade Control of the Department of State under the International Traffic in Arms Regulations (22 CFR parts 120 through 130): Amiton: O,O-Diethyl S-[2-(diethylamino)ethyl] 

phosphorothiolate and corresponding alkylated or protonated salts (78–53–5); BZ: 3-Quinuclidinyl benzilate 6581–06–2); and Methylphosphonyl 

dichloride (676–97–1). 

Note 2: All Schedule 2 chemicals not listed in Note 1 to this Supplement are controlled for export purposes under the Export Administration 

Regulations (see part 774 of the EAR, the Commerce Control List). 

SUPPLEMENT NO. 2 TO PART 713—DEADLINES FOR SUBMISSION OF SCHEDULE 2 DECLARATIONS, REPORTS, AND

AMENDMENTS

Declarations and reports Applicable forms Due dates 

Annual Declaration on Past Activities (previous 

calendar year).

Declared plant site (production, processing, or 

consumption). 

Certification, 2–1, 2–2, 2–3, 2–3A, 2–3B (if 

also exported or imported), A (as appropriate), B (optional).

February 28 of the year following any calendar year in which the production, processing, or consumption of a Schedule 2 

chemical exceeded the applicable declaration thresholds in § 713.2(a)(1)(i) of the 

CWCR. 

Annual Report on Exports and Imports (previous calendar year).

Plant site, trading company, other persons. 

Certification, 2–1, 2–3B, A (as appropriate), B 

(optional).

February 28 of the year following any calendar year in which exports or imports of a 

Schedule 2 chemical by a plant site, trading 

company, or other person subject to the 

CWCR (as described in § 713.3(a)(2) of the 

CWCR) exceeded the applicable thresholds 

in § 713.3(b)(1) of the CWCR. 

Combined Declaration & Report ........................

Declared plant site (production, processing, or 

consumption; exports and imports). 

Certification, 2–1, 2–2, 2–3, 2–3A, 2–3B, A 

(as appropriate), B (optional).

February 28 of the year following any calendar year in which the production, processing, or consumption of a Schedule 2 

chemical and the export or import of the 

same or a different Schedule 2 chemical by 

a declared plant site exceeded the applicable thresholds in §§ 713.2(a)(1)(i) and 

713.3(b)(1), respectively, of the CWCR. 

Annual Declaration on Anticipated Activities 

(next calendar year).

Certification, 2–1, 2–2, 2–3, 2–3A, 2–3C, A 

(as appropriate), B (optional).

September 3 of the year prior to any calendar 

year in which Schedule 2 activities are anticipated to occur. 

Declaration on Additionally Planned Activities 

(production, processing and consumption).

Certification, 2–1, 2–2, 2–3, 2–3A, 2–3C, A 

(as appropriate), B (optional).

15 calendar days before the additionally 

planned activity begins. 

Amended Declaration: 

—Declaration information ............................

—Company information 

—Post-inspection letter 

Certification, 2–1, 2–2, 2–3, 2–3A, 2–3B (if 

also exported or imported), A (as appropriate), B (optional).

—15 calendar days after change in information 

—30 calendar days after change in information 

—45 calendar days after receipt of letter 

Amended Report ................................................ Certification, 2–1, 2–3B, A (as appropriate), B 

(optional).

—15 calendar days after change in information 

Amended Combined Declaration & Report ........ Certification, 2–1, 2–2, 2–3, 2–3A, 2–3B, A 

(as appropriate), B (optional).

—15 calendar days after change in information 

PART 714—ACTIVITIES INVOLVING 

SCHEDULE 3 CHEMICALS

Sec. 

714.1 Annual declaration requirements for 

plant sites that produce a Schedule 3 

chemical in excess of 30 metric tons. 

714.2 Annual reporting requirements for 

exports and imports in excess of 30 

metric tons of Schedule 3 chemicals. 

714.3 Advance declaration requirements for 

additionally planned production of 

Schedule 3 chemicals. 

714.4 Amended declaration or report. 

714.5 Declarations and reports returned 

without action by BIS. 

714.6 Deadlines for submission of Schedule 

3 declarations, reports, and amendments. 

Supplement No. 1 to Part 714—Schedule 3 

Chemicals 

Supplement No. 2 to Part 714—Deadlines for 

Submission of Schedule 3 Declarations, 

Reports, and Amendments

Authority: 22 U.S.C. 6701 et seq.; E.O. 

13128, 64 FR 36703, 3 CFR, 1999 Comp., p. 

199.

§ 714.1 Annual declaration requirements 

for plant sites that produce a Schedule 3 

chemical in excess of 30 metric tons. 

(a) Declaration of production of 

Schedule 3 chemicals for purposes not

Federal Register / Vol. 69, No. 234 / Tuesday, December 7, 2004 / Proposed Rules 70787

prohibited by the CWC. (1) Production 

quantities that trigger the declaration 

requirement. You must complete the 

appropriate forms specified in 

paragraph (b) of this section if you have 

produced or anticipate producing a 

Schedule 3 chemical (see Supplement 

No. 1 to this part) as follows: 

(i) Annual declaration on past 

activities. You produced at one or more 

plants on your plant site in excess of 30 

metric tons of any single Schedule 3 

chemical during the previous calendar 

year. 

(ii) Annual declaration on anticipated 

activities. You anticipate that you will 

produce at one or more plants on your 

plant site in excess of 30 metric tons of 

any single Schedule 3 chemical in the 

next calendar year. 

(2) Schedule 3 chemical production.

(i) For the purpose of determining 

Schedule 3 production, you must 

include all steps in the production of a 

chemical in any units within the same 

plant through chemical reaction, 

including any associated processes (e.g., 

purification, separation, extraction, 

distillation, or refining) in which the 

chemical is not converted into another 

chemical. The exact nature of any 

associated process (e.g., purification, 

etc.) is not required to be declared. 

(ii) For the purpose of determining if 

a Schedule 3 chemical is subject to 

declaration, you must declare an 

intermediate Schedule 3 chemical, but 

not a transient intermediate Schedule 3 

chemical. 

(3) Mixtures containing a Schedule 3 

chemical. (i) When you must count the 

quantity of a Schedule 3 chemical in a 

mixture for declaration purposes. The 

quantity of each Schedule 3 chemical 

contained in a mixture must be counted 

for declaration purposes only if the 

concentration of each Schedule 3 

chemical in the mixture is 80% or more 

by volume or by weight, whichever 

yields the lesser percent. 

(ii) How to count the amount of a 

Schedule 3 chemical in a mixture. If 

your mixture contains 80% or more 

concentration of a Schedule 3 chemical, 

you must count only the amount 

(weight) of the Schedule 3 chemical in 

the mixture, not the total weight of the 

mixture. 

(b) Types of declaration forms to be 

used. (1) Annual declaration on past 

activities. You must complete the 

Certification Form and Forms 3–1, 3–2, 

3–3, and Form A if one or more plants 

on your plant site produced in excess of 

30 metric tons of any single Schedule 3 

chemical during the previous calendar 

year. Form B is optional. 

(2) Annual declaration on anticipated 

activities. You must complete the 

Certification Form, and Forms 3–1 and 

3–3 if you anticipate that you will 

produce at one or more plants on your 

plant site in excess of 30 metric tons of 

any single Schedule 3 chemical in the 

next calendar year. 

(c) Quantities to be declared. (1) 

Production of a Schedule 3 chemical in 

excess of 30 metric tons. If your plant 

site is subject to the declaration 

requirements of paragraph (a) of this 

section, you must declare the range 

within which the production at your 

plant site falls (30 to 200 metric tons, 

200 to 1,000 metric tons, etc.) as 

specified on Form 3–3. When specifying 

the range of production for your plant 

site, you must aggregate the production 

quantities of all plants on the plant site 

that produced the Schedule 3 chemical 

in amounts greater than 30 metric tons. 

Do not aggregate amounts of production 

from plants on the plant site that did not 

individually produce a Schedule 3 

chemical in amounts greater than 30 

metric tons. You must complete a 

separate Form 3–3 for each Schedule 3 

chemical for which production at your 

plant site exceeds 30 metric tons. 

(2) Rounding. To determine the 

production range into which your plant 

site falls, add all the production of the 

declared Schedule 3 chemical during 

the calendar year from all plants on 

your plant site that produced the 

Schedule 3 chemical in amounts 

exceeding 30 metric tons, and round to 

the nearest ten metric tons.

(d) ‘‘Declared’’ Schedule 3 plant site.

A plant site that submitted a declaration 

pursuant to paragraph (a)(1) of this 

section is a ‘‘declared’’ Schedule 3 plant 

site. 

(e) Routine inspections of declared 

Schedule 3 plant sites. A ‘‘declared’’

Schedule 3 plant site is subject to 

routine inspection by the Organization 

for the Prohibition of Chemical 

Weapons (see part 716 of the CWCR) if: 

(1) The declared plants on your plant 

site produced in excess of 200 metric 

tons aggregate of any Schedule 3 

chemical during the previous calendar 

year; or 

(2) You anticipate that the declared 

plants on your plant site will produce 

in excess of 200 metric tons aggregate of 

any Schedule 3 chemical during the 

next calendar year.

§ 714.2 Annual reporting requirements for 

exports and imports in excess of 30 metric 

tons of Schedule 3 chemicals. 

(a) Any person subject to the CWCR 

that exported from or imported into the 

United States in excess of 30 metric tons 

of any single Schedule 3 chemical 

during the previous calendar year has a 

reporting requirement under this 

section. 

(1) Annual report on exports and 

imports. Declared plant sites, 

undeclared plant sites, trading 

companies, or any other person subject 

to the CWCR that exported from or 

imported into the United States in 

excess of 30 metric tons of any single 

Schedule 3 chemical during the 

previous calendar year must submit an 

annual report on exports and imports.

Note 1 to paragraph (a)(1): Declared and 

undeclared plant sites must count, for report 

purposes, all exports from and imports to the 

entire plant site, not only from or to 

individual plants on the plant site.

Note 2 to paragraph (a)(1): The U.S. 

Government will not submit to the OPCW 

company-specific information relating to the 

export or import of Schedule 3 chemicals 

contained in reports. The U.S. Government 

will add all export and import information 

contained in reports to establish the U.S. 

national aggregate declaration on exports and 

imports.

(2) Mixtures containing a Schedule 3 

chemical. The quantity of a Schedule 3 

chemical contained in a mixture must 

be counted for reporting an export or 

import only if the concentration of the 

Schedule 3 chemical in the mixture is 

80% or more by volume or by weight, 

whichever yields the lesser percent. For 

reporting purposes, only count the 

weight of the Schedule 3 chemical in 

the mixture, not the entire weight of the 

mixture.

Note to paragraph (a)(2): The ‘‘80% and 

above’’ mixtures rule applies only for report 

purposes. This rule does not apply for 

purposes of determining whether the export 

of your mixture to a non-State Party requires 

an End-Use Certificate or for determining 

whether you need an export license from BIS 

(see 15 CFR 742.2, 742.18 and 745.2 of the 

Export Administration Regulations) or from 

the Department of State (see the International 

Traffic in Arms Regulations (22 CFR parts 

120 through 130)).

(b) Types of forms to be used. (1) 

Declared Schedule 3 plant sites. (i) If 

your plant site is declared for 

production of a Schedule 3 chemical 

(and has completed questions 3–3.1 and 

3–3.2 on Form 3–3) and you also 

exported from or imported to your plant 

site in excess of 30 metric tons of that 

same Schedule 3 chemical, you must 

report the export or import by either: 

(A) Completing question 3–3.3 on 

Form 3–3 on your declaration for that 

same Schedule 3 chemical; or 

(B) Submitting, separately from your 

declaration, a Certification Form, Form 

3–1, and a Form 3–3 for each Schedule 

3 chemical to be reported, completing 

70788 Federal Register / Vol. 69, No. 234 / Tuesday, December 7, 2004 / Proposed Rules 

only question 3–3.3. Attach Form A, as 

appropriate; Form B is optional. 

(ii) If your plant site is declared for 

production of a Schedule 3 chemical 

and you exported or imported in excess 

of 30 metric tons of a different Schedule 

3 chemical, you must report the export 

or import by either: 

(A) Submitting, along with your 

declaration, a Form 3–3 for each 

Schedule 3 chemical to be reported, 

completing only question 3–3.3. Attach 

Form A, as appropriate; Form B is 

optional; or

(B) Submitting, separately from your 

declaration, a Certification Form, Form 

3–1 and a Form 3.3 for each Schedule 

3 chemical to be reported, completing 

only question 3–3.3. Attach Form A, as 

appropriate; Form B is optional. 

(2) If you are an undeclared plant site, 

a trading company, or any other person 

subject to the CWCR, you must submit 

a Certification Form, Form 3–1, and a 

Form 3–3 for each Schedule 3 chemical 

to be reported, completing only question 

3–3.3. Attach Form A, as appropriate; 

Form B is optional. 

(c) Quantities to be reported. (1) 

Calculations. If you exported from or 

imported to your plant site or trading 

company more than 30 metric tons of a 

Schedule 3 chemical in the previous 

calendar year, you must report all 

exports and imports of that chemical by 

country of destination or country of 

origin, respectively, and indicate the 

total amount exported to or imported 

from each country. 

(2) Rounding. For purposes of 

reporting exports and imports of a 

Schedule 3 chemical, you must total all 

exports and imports per calendar year 

per recipient or source and then round 

to the nearest 0.1 metric tons.

Note to § 714.2(c): Under the Convention, 

the United States is obligated to provide the 

OPCW a national aggregate annual 

declaration of the quantities of each Schedule 

3 chemical exported and imported. The U.S. 

Government will not submit your companyspecific information relating to the export or 

import of a Schedule 3 chemical reported 

under this § 714.2. The U.S. Government will 

add all export and import information 

submitted by various facilities under this 

section to produce a national aggregate 

annual declaration of destination-bydestination trade for each Schedule 3 

chemical.

§ 714.3 Advance declaration requirements 

for additionally planned production of 

Schedule 3 chemicals. 

(a) Declaration requirements. (1) You 

must declare additionally planned 

production of Schedule 3 chemicals 

after the annual declaration on 

anticipated activities for the next 

calendar year has been delivered to BIS 

if: 

(i) You plan that a previously 

undeclared plant on your plant site 

under § 714.1(a)(1)(ii) will produce a 

Schedule 3 chemical above the 

declaration threshold; 

(ii) You plan to produce at a plant 

declared under § 714.1(a)(1)(ii) an 

additional Schedule 3 chemical above 

the declaration threshold; 

(iii) You plan to increase the 

production of a Schedule 3 chemical by 

declared plants on your plant site from 

the amount exceeding the applicable 

declaration threshold to an amount 

exceeding the applicable inspection 

threshold (see § 716.1(b)(3) of the 

CWCR); or 

(iv) You plan to increase the aggregate 

production of a Schedule 3 chemical at 

a declared plant site to an amount above 

the upper limit of the range previously 

declared under § 714.1(a)(1)(ii). 

(2) If you must submit a declaration 

on additionally planned activities 

because you plan to engage in any of the 

activities listed in paragraphs (a)(1)(i) 

through (iv) of this section, you also 

should declare any changes to the 

anticipated purposes of production or 

product group codes. You do not have 

to submit a declaration on additionally 

planned activities if you are only 

changing your purposes of production 

or product group codes. 

(b) Declaration forms to be used. If 

you are required to declare additionally 

planned activities pursuant to paragraph 

(a) of this section, you must complete 

the Certification Form and Forms 3–1, 

3–2, and 3–3 as appropriate. Such forms 

are due to BIS at least 15 days in 

advance of the beginning of the 

additional or new activity.

§ 714.4 Amended declaration or report. 

In order for BIS to maintain accurate 

information on previously submitted 

plant site declarations, including 

information necessary to facilitate 

inspection notifications and activities or 

to communicate declaration or report 

requirements, amended declarations or 

reports will be required under the 

following circumstances described in 

this section. This section applies only to 

annual declarations on past activities 

and annual reports on exports and 

imports submitted for the previous 

calendar year or annual declarations on 

anticipated activities covering the 

current calendar year, unless specified 

otherwise in a final inspection report. 

(a) Changes to information that 

directly affects a declared plant site’s 

Annual Declaration of Past Activities 

(ADPA) or Combined Annual 

Declaration or Report which was 

previously submitted to BIS. You must 

submit an amended declaration or 

report to BIS within 15 days of any 

change in the following information: 

(1) Types of Schedule 3 chemicals 

produced (e.g., production of additional 

Schedule 3 chemicals); 

(2) Production range (e.g., from 30 to 

200 metric tons to above 200 to 1000 

metric tons) of Schedule 3 chemicals; 

(3) Purpose of Schedule 3 chemical 

production (e.g., additional end-uses); 

and 

(4) Addition of new plant(s) for 

production of Schedule 3 chemicals. 

(b) Changes to export or import 

information submitted in Annual 

Reports on Exports and Imports from 

undeclared plant sites, trading 

companies and U.S. persons. You must 

submit an amended report or amended 

combined declaration and report to BIS 

within 15 days of any change in the 

following export or import information: 

(1) Types of Schedule 3 chemicals 

exported or imported (additional 

Schedule 3 chemicals); 

(2) Quantities of Schedule 3 

chemicals exported or imported; 

(3) Destination(s) of Schedule 3 

chemicals exported; 

(4) Source(s) of Schedule 3 chemicals 

imported; and 

(5) End-use(s) of Schedule 3 

chemicals exported or imported (e.g., 

addition of new end-use(s)). 

(c) Changes to company and plant site 

information submitted in the ADPA, the 

Annual Declaration of Anticipated 

Activities, and the Annual Report on 

Exports and Imports. (1) Internal 

company changes. You must submit an 

amended declaration or report to BIS 

within 30 days of any change in the 

following information: 

(i) Name of declaration/report point of 

contact (D-POC), including telephone 

number, facsimile number, and e-mail 

address; 

(ii) Name(s) of inspection point(s) of 

contact (I-POC), including telephone 

number, and facsimile number, and email address(es); 

(iii) Company name (see 714.4(c)(2) 

for other company changes); 

(iv) Company mailing address; 

(v) Plant site name; 

(vi) Plant site owner, including 

telephone number and facsimile 

number; 

(vii) Plant site operator, including 

telephone number and facsimile 

number; 

(viii) Plant name; 

(xi) Plant owner, including telephone 

number and facsimile number; and 

(x) Plant operator, including 

telephone number and facsimile 

number.

Federal Register / Vol. 69, No. 234 / Tuesday, December 7, 2004 / Proposed Rules 70789

(2) Change in ownership of company, 

plant site, or plant. If you sold or

purchased a declared company, plant 

site or plant, you must submit an 

amended declaration or report to BIS, 

either before the effective date of the 

change or within 30 days after the 

effective date of the change. The 

amended declaration or report must 

include the following information. 

(i) Information that must be submitted 

to BIS by a company selling a declared 

plant site: 

(A) Name of seller (i.e., name of the 

company selling a declared plant site); 

(B) Name of declared plant site and 

U.S. Code Number for that plant site; 

(C) Name of purchaser (i.e., name of 

company purchasing a declared plant 

site) and identity of the new owner and 

contact person for the purchaser, if 

known; 

(D) Date of ownership transfer; 

(E) Additional (e.g., unique) details on 

the sale of the plant site relevant to 

ownership or operational control over 

any portion of the declared plant site 

(e.g., whether the entire plant site or 

only a portion of the declared plant site 

has been sold to a new owner); and 

(F) Details regarding whether the new 

owner will submit the declaration or 

report for the entire calendar year 

during which the ownership changed 

occurred, or whether the previous 

owner and the new owner will submit 

separate declarations or reports for the 

periods of the calendar year during 

which each owned the plant site or 

trading company. 

(1) If the new owner is responsible for 

submitting the declaration or report for 

the entire current year, it must have in 

its possession the records for the period 

of the year during which the previous 

owner owned the plant site or trading 

company. 

(2) If the previous owner and new 

owner will submit separate declarations 

or reports for the periods of the calendar 

year during which each owned the plant 

site or trading company, and, at the time 

of transfer of ownership, the previous 

owner’s activities are not above the 

declaration or report thresholds set forth 

in § 714.1(a)(1) and § 714.2(a)(1) of the 

CWCR, respectively, the previous owner 

and the new owner must still submit 

declarations to BIS with the below 

threshold quantities indicated. 

(3) If the part-year declarations 

submitted by the previous owner and 

the new owner are not, when combined, 

above the declaration threshold set forth 

in § 714.1(a)(1) of the CWCR, BIS will 

return the declarations without action as 

set forth in § 714.5 of the CWCR. 

(4) If part-year reports are not, when 

combined, above the report threshold 

set forth in § 714.2(a)(1) of the CWCR, 

BIS will return the reports without 

action as set forth in § 714.5 of the 

CWCR. 

(ii) Information that must be 

submitted to BIS by the company 

purchasing a declared plant site: 

(A) Name of purchaser (i.e., name of 

individual or company purchasing a 

declared plant site); 

(B) Mailing address of purchaser; 

(C) Name of declaration point of 

contact (D-POC) for the purchaser, 

including telephone number, facsimile 

number, and e-mail address; 

(D) Name(s) of inspection point(s)s of 

contact (I-POC) for the purchaser, 

including telephone number, facsimile 

number, and e-mail address(es); 

(E) Name of the declared plant site 

and U.S. Code Number for that plant 

site; 

(F) Location of the declared plant site; 

(G) Operator of the declared plant site, 

including telephone number, and 

facsimile number; 

(H) Name of plant where Schedule 3 

production exceeds the declaration 

threshold; 

(I) Owner of plant where Schedule 3 

production exceeds the declaration 

threshold; 

(J) Operator of plant where Schedule 

3 production exceeds the declaration 

threshold; and 

(K) Details on the next declaration or 

report submission on whether the new 

owner will submit the declaration or 

report for the entire calendar year 

during which the ownership change 

occurred, or whether the previous 

owner and new owner will submit 

separate declarations or reports for the 

periods of the calendar year during 

which each owned the plant site or 

trading company.

Note 1 to § 714.4(c): You must submit an 

amendment to your most recently submitted 

declaration or report for declaring changes to 

internal company information (e.g., company 

name change) or changes in ownership of a 

facility or trading company that have 

occurred since the submission of this 

declaration or report. BIS will process the 

amendment to ensure current information is 

on file regarding the facility or trading 

company (e.g., for inspection notifications 

and correspondence) and will also forward 

the amended declaration to the OPCW to 

ensure that they also have current 

information on file regarding your facility or 

trading company.

Note 2 to § 714.4(c): You may notify BIS of 

change in ownership via a letter to the 

address given in § 711.6 of the CWCR. If you 

are submitting an amended declaration or 

report, use Form B to address details 

regarding the sale of the declared plant site 

or trading company.

Note 3 to § 714.4(c): For ownership 

changes, the declared plant site or trading 

company will maintain its original U.S. Code 

Number, unless the plant site or trading 

company is sold to multiple owners, at 

which time BIS will assign new U.S. Code 

Numbers.

(d) Inspection-related amendments. If, 

following the completion of an 

inspection (see parts 716 and 717 of the 

CWCR), you are required to submit an 

amended declaration based on the final 

inspection report, BIS will notify you in 

writing of the information to be 

amended pursuant to §§ 716.10 and 

717.5(b) of the CWCR. Amended 

declarations must be submitted to BIS 

no later than 45 days following your 

receipt of BIS’s post inspection letter. 

(e) Non-substantive changes. If, 

subsequent to the submission of your 

declaration or report to BIS, you 

discover one or more non-substantiative 

typographical errors in your declaration 

or report, you are not required to submit 

an amended declaration or report to BIS. 

Instead, you may correct these errors in 

a subsequent declaration or report. 

(f) Documentation required for 

amended declarations or reports. If you 

are required to submit an amended 

declaration or report to BIS pursuant to 

paragraph (a), (b), (c), or (d) of this 

section, you must submit either: 

(1) A letter containing all of the 

corrected information required, in 

accordance with the provisions of this 

section, to amend your declaration or 

report; or 

(2) Both of the following: 

(i) A new Certification Form; and 

(ii) The specific forms required for the 

declaration or report type being 

amended (e.g., annual declaration on 

past activities) containing the corrected 

information required, in accordance 

with the requirements of this section, to 

amend your declaration or report.

§ 714.5 Declarations and reports returned 

without action by BIS. 

If you submit a declaration or report 

and BIS determines that the information 

contained therein is not required by the 

CWCR, BIS will return the original 

declaration or report to you, without 

action, accompanied by a letter 

explaining BIS’s decision. In order to 

protect your confidential business 

information, BIS will not maintain a 

copy of the any declaration or report 

that is returned without action. 

However, BIS will maintain a copy of 

the RWA letter.

§ 714.6 Deadlines for submission of 

Schedule 3 declarations, reports, and 

amendments. 

Declarations, reports, and 

amendments required under this part 

70790 Federal Register / Vol. 69, No. 234 / Tuesday, December 7, 2004 / Proposed Rules 

must be postmarked by the appropriate 

date identified in Supplement No. 2 to 

this part 714 of the CWCR. Required 

declarations, reports, and amendments 

include: 

(a) Annual declaration on past 

activities (production of Schedule 3 

chemicals during the previous calendar 

year); (b) Annual report on exports and 

imports of Schedule 3 chemicals from 

plant sites, trading companies, and 

other persons subject to the CWCR 

(during the previous calendar year); (c) Combined declaration and report 

(production of Schedule 3 chemicals, as 

well as exports or imports of the same 

or different Schedule 3 chemicals, by a 

declared plant site during the previous 

calendar year); (d) Annual declaration on anticipated 

activities (anticipated production of 

Schedule 3 chemicals during the next 

calendar year); 

(e) Declaration on Additionally 

Planned Activities (additionally 

planned production of Schedule 3 

chemicals); and 

(f) Amended declaration and report, 

including combined declaration and 

report.

SUPPLEMENT NO. 1 TO PART 714—SCHEDULE 3 CHEMICALS

(CAS registry 

number) 

A. Toxic chemicals

(1) Phosgene: Carbonyl dichloride ..................................................................................................................................................... (75–44–5) 

(2) Cyanogen chloride ........................................................................................................................................................................ (506–77–4) 

(3) Hydrogen cyanide ......................................................................................................................................................................... (74–90–8) 

(4) Chloropicrin: Trichloronitromethane .............................................................................................................................................. (76–06–2) 

B. Precursors

(5) Phosphorus oxychloride ................................................................................................................................................................ (10025–87–3) 

(6) Phosphorus trichloride .................................................................................................................................................................. (7719–12–2) 

(7) Phosphorus pentachloride ............................................................................................................................................................ (10026–13–8) 

(8) Trimethyl phosphite ....................................................................................................................................................................... (121–45–9) 

(9) Triethyl phosphite .......................................................................................................................................................................... (122–52–1) 

(10) Dimethyl phosphite ..................................................................................................................................................................... (868–85–9) 

(11) Diethyl phosphite ........................................................................................................................................................................ (762–04–9) 

(12) Sulfur monochloride .................................................................................................................................................................... (10025–67–9) 

(13) Sulfur dichloride .......................................................................................................................................................................... (10545–99–0) 

(14) Thionyl chloride ........................................................................................................................................................................... (7719–09–7) 

(15) Ethyldiethanolamine .................................................................................................................................................................... (139–87–7) 

(16) Methyldiethanolamine ................................................................................................................................................................. (105–59–9) 

(17) Triethanolamine .......................................................................................................................................................................... (102–71–6) 

Note to Supplement No. 1: Refer to Supplement No. 1 to part 774 of the Export Administration Regulations (the Commerce Control List), 

ECCNs 1C350 and 1C355, for export controls related to Schedule 3 chemicals. 

SUPPLEMENT NO. 2 TO PART 714—DEADLINES FOR SUBMISSION OF SCHEDULE 3 DECLARATIONS, REPORTS, AND

AMENDMENTS

Declarations Applicable forms Due dates 

Annual Declaration on Past Activities (previous 

calendar year).

Declared plant site (production) 

Certification, 3–1, 3–2, 3–3 (if also exported 

or imported), A (as appropriate), B (optional).

February 28 of the year following any calendar year in which the production of a 

Schedule 3 chemical exceeded the declaration threshold in § 714.1(a)(1)(i) of the 

CWCR. 

Annual Report on Exports and Imports (previous calendar year); 

Plant site, trading company, other persons. 

Certification, 3–1, 3–3.3 and 3–3.4, A (as appropriate), B (optional).February 28 of the year following any calendar year in which exports or imports of a 

Schedule 3 chemical by a plant site, trading 

company, or other person subject to the 

CWCR (as described in § 714.2(a) of the 

CWCR) exceeded the threshold in 

§ 714.2(a) of the CWCR. 

Combined Declaration & Report ........................ Certification, 3–1, 3–2, and 3–3, A (as appropriate), B (optional).February 28 of the year following any calendar year in which the production of a 

Schedule 3 chemical and the export or import of the same or a different Schedule 3 

chemical by a declared plant site exceeded 

the applicable thresholds in §§ 714.1(a)(1)(i) 

and 714.2(a), respectively, of the CWCR. 

Annual Declaration on Anticipated Activities 

(Production); (next calendar year).

Certification, 3–1, 3–2, 3–3.2, A (as appropriate), B (optional).September 3 of the year prior to any calendar 

year in which Schedule 3 production is anticipated to occur. 

Declaration on Additionally Planned Activities ... Certification, 3–1, 3–3.1 and 3–3.2, A (as appropriate), B (optional).15 calendar days before the additionally 

planned activity begins. 

Amended Declaration: 

—Declaration information ............................

—Company information 

—Post-inspection letter. 

Certification, 3–1, 3–2, 3–3 .............................. —15 calendar days after change in information 

—30 calendar days after change in information 

—45 calendar days after receipt of letter 

Amended Report ................................................ Certification, 3–1, 3–2, 3–3, A (as appropriate), B (optional.—15 calendar days after change in information 

Federal Register / Vol. 69, No. 234 / Tuesday, December 7, 2004 / Proposed Rules 70791

Declarations Applicable forms Due dates 

Combined Declaration & Report ........................ Certification, 3–1,3–2, 3–3, A (as appropriate), 

B (optional).

—15 calendar days after change in information 

PART 715—ACTIVITIES INVOLVING 

UNSCHEDULED DISCRETE ORGANIC 

CHEMICALS (UDOCs)

Sec. 

715.1 Annual declaration requirements for 

production by synthesis of unscheduled 

discrete organic chemicals (UDOCs). 

715.2 Amended declaration. 

715.3 Declarations returned without action 

by BIS. 

715.4 Deadlines for submitting UDOC 

declarations, no changes authorization 

forms, and amendments. 

Supplement No. 1 to part 715—Definition of 

an Unscheduled Discrete Organic 

Chemical. 

Supplement No. 2 to Part 715—Examples of 

Unscheduled Discrete Organic 

Chemicals (UDOCs) and UDOC 

Production. 

Supplement No. 3 to Part 715—Deadlines for 

Submission of Declarations, No Changes 

Authorization Forms, and Amendments 

for Unscheduled Discrete Organic 

Chemical (UDOC) Facilities.

Authority: 22 U.S.C. 6701 et seq.; E.O. 

13128, 64 FR 36703, 3 CFR, 1999 Comp., p. 

199.

§ 715.1 Annual declaration requirements 

for production by synthesis of unscheduled 

discrete organic chemicals (UDOCs). 

(a) Declaration of production by 

synthesis of UDOCs for purposes not 

prohibited by the CWC. (1) Production 

quantities that trigger the declaration 

requirement. See § 711.6 of the CWCR 

for information on obtaining the forms 

you will need to declare production of 

unscheduled discrete organic chemicals. 

You must complete the forms specified 

in paragraph (b) of this section if your 

plant site produced by synthesis: 

(i) In excess of 200 metric tons 

aggregate of all UDOCs (including all 

UDOCs containing the elements 

phosphorus, sulfur or fluorine, referred 

to as ‘‘PSF-chemicals’’) during the 

previous calendar year; or 

(ii) In excess of 30 metric tons of an 

individual PSF-chemical at one or more 

plants at your plant site during the 

previous calendar year.

Note to § 715.1(a)(1)(ii): In calculating the 

aggregate production quantity of each 

individual PSF chemical produced by a PSF 

plant, do not include production of a PSF 

chemical that was produced in quantities less 

than 30 metric tons. Include only production 

quantities from those PSF plants that 

produced more than 30 metric tons of an 

individual PSF chemical.

(2) UDOCs subject to declaration 

requirements under this part. (i) UDOCs 

subject to declaration requirements 

under this part are those produced by 

synthesis that have been isolated for: 

(A) Use; or 

(B) Sale as a specific end product. 

(ii) Exemptions.

(A) Polymers and oligomers 

consisting of two or more repeating 

units; 

(B) Chemicals and chemical mixtures 

produced through a biological or 

biomediated process; 

(C) Products from the refining of 

crude oil, including sulfur-containing 

crude oil; 

(D) Metal carbides (i.e., chemicals 

consisting only of metal and carbon); 

and 

(E) UDOCs produced by synthesis that 

are ingredients or by-products in foods 

designed for consumption by humans 

and/or animals.

Note to paragraph (a)(2): See Supplement 

No. 2 to this part for examples of UDOCs 

subject to the declaration requirements of 

this part, and for examples of activities that 

are not considered production by synthesis.

(3) Exemptions for UDOC plant sites.

UDOC plant sites that exclusively 

produced hydrocarbons or explosives 

are exempt from UDOC declaration 

requirements. For the purposes of this 

part, the following definitions apply for 

hydrocarbons and explosives: 

(i) Hydrocarbon means any organic 

compound that contains only carbon 

and hydrogen; and 

(ii) Explosive means a chemical (or a 

mixture of chemicals) that is included 

in Class 1 of the United Nations 

Organization hazard classification 

system. 

(b) Types of declaration forms to be 

used. (1) Annual declaration on past 

activities. (i) You must complete the 

Certification Form and Form UDOC 

(consisting of two pages), unless there 

are no changes from the previous year’s 

declaration and you submit a No 

Changes Authorization Form pursuant 

to paragraph (b)(1)(ii) of this section. 

Attach Form A as appropriate; Form B 

is optional. 

(ii) You may complete the No Changes 

Authorization Form if there are no 

updates or changes to any information 

(except the certifying official and dates 

signed and submitted) in your plant 

site’s previously submitted annual 

declaration on past activities. Your 

plant site’s activities will be declared to 

the OPCW and subject to inspection, if 

applicable, based upon the data 

reported in the most recent UDOC 

Declaration that you submitted to BIS.

Note to § 715.1(b)(1)(ii): If, after submitting 

the No Changes Authorization Form, you 

have changes to information, you must 

submit a complete amendment to the annual 

declaration on past activities. See § 715.2.

(c) ‘‘Declared’’ UDOC plant site. A 

plant site that submitted a declaration 

pursuant to paragraph (a)(1) of this 

section is a ‘‘declared’’ UDOC plant site. 

(d) Routine inspections of declared 

UDOC plant sites. A ‘‘declared’’ UDOC 

plant site is subject to routine 

inspection by the Organization for the 

Prohibition of Chemical Weapons (see

part 716 of the CWCR) if it produced by 

synthesis more than 200 metric tons 

aggregate of UDOCs during the previous 

calendar year.

§ 715.2 Amended declaration. 

In order for BIS to maintain accurate 

information on previously submitted 

plant site declarations, including 

current information necessary to 

facilitate inspection notifications and 

activities or to communicate declaration 

requirements, amended declarations 

will be required under the following 

circumstances described in this section. 

This section applies only to annual 

declarations on past activities submitted 

for the previous calendar year, unless 

specified otherwise in a final inspection 

report. 

(a) Changes to information that 

directly affects a declared plant site’s 

Annual Declaration of Past Activities 

(ADPA) which was previously submitted 

to BIS. You must submit an amended 

declaration to BIS within15 days of any 

change in the following information: 

(1) Product group codes for UDOCs 

produced in quantities exceeding the 

applicable declaration threshold 

specified in § 715.1(a)(1); 

(2) Approximate number of plants at 

the declared plant site that produced 

any amount of UDOCs (including all 

PSF chemicals); 

(3) Aggregate amount of production 

(by production range) of UDOCs 

produced by all plants at the declared 

plant site; 

(4) Exact number of plants at the 

declared plant site that individually 

produced more than 30 metric tons of a 

single PSF chemical; and 

(5) Production range of each plant at 

the declared plant site that individually 

70792 Federal Register / Vol. 69, No. 234 / Tuesday, December 7, 2004 / Proposed Rules 

produced more than 30 metric tons of a 

single PSF chemical. 

(b) Changes to company and plant 

site information submitted in the ADPA 

that must be maintained by BIS. (1) 

Internal company changes. You must 

submit an amended declaration to BIS 

within 30 days of any change in the 

following information: 

(i) Name of declaration point of 

contact (D–POC), including telephone 

number, facsimile number, and e-mail 

address; 

(ii) Name(s) of inspection point(s) of 

contact (I–POC), including telephone 

number, facsimile number(s) and e-mail 

address(es);

(iii) Company name (see 715.2(b)(2) 

for other company changes); 

(iv) Company mailing address; 

(v) Plant site name; 

(vi) Plant site owner, including 

telephone number and facsimile 

number; and 

(vii) Plant site operator, including 

telephone number and facsimile 

number. 

(2) Change in ownership of company 

or plant site. If you sold or purchased 

a declared plant site, you must submit 

an amended declaration to BIS, either 

before the effective date of the change or 

within 30 days after the effective date of 

the change. The amended declaration 

must include the following information. 

(i) Information that must be submitted 

to BIS by the company selling a 

declared plant site: 

(A) Name of seller (i.e., name of 

company selling a declared plant site); 

(B) Name of declared plant site name 

and U.S. Code Number for that plant 

site; 

(C) Name of purchaser (i.e., name of 

new company purchasing a declared 

plant site) and identity of contact person 

for the purchaser, if known; 

(D) Date of ownership transfer or 

change; 

(E) Additional details on the sale of 

the declared plant site relevant to 

ownership or operational control over 

any portion of the declared plant site 

(e.g., whether the entire plant site or 

only a portion of the declared plant site 

has been sold to a new owner); and 

(F) Details regarding whether the new 

owner will submit the declaration for 

the entire calendar year during which 

the ownership change occurred, or 

whether the previous owner and new 

owner will submit separate declarations 

for the periods of the calendar year 

during which each owned the plant site. 

(1) If the new owner is responsible for 

submitting the declaration for the entire 

current year, it must have in its 

possession the records for the period of 

the year during which the previous 

owner owned the plant site. 

(2) If the previous owner and new 

owner will submit separate declarations 

for the periods of the calendar year 

during which each owned the plant site, 

and, if at the time of transfer of 

ownership, the previous owner’s 

activities are not above the declaration 

thresholds set forth in § 715.1(a)(1) of 

the CWCR, the previous owner and the 

new owner must still submit 

declarations to BIS with the below 

threshold quantities indicated. 

(3) If the part-year declarations 

submitted by the previous owner and 

the new owner are not, when combined, 

above the declaration threshold set forth 

in § 715.1(a)(1) of the CWCR, BIS will 

return the declarations without action as 

set forth in § 715.3 of the CWCR. 

(ii) Information that must be 

submitted to BIS by the company 

purchasing a declared plant site: 

(A) Name of purchaser (i.e., name of 

individual or company purchasing a 

declared plant site); 

(B) Mailing address of purchaser; 

(C) Name of declaration point of 

contact (D-POC) for the purchaser, 

including telephone number, facsimile 

number, and e-mail address; 

(D) Name(s) of inspection point(s) of 

contact (I-POC) for the purchaser, 

including telephone number(s), 

facsimile number(s), and e-mail 

address(es); 

(E) Name of the declared plant site 

and U.S. Code Number for that plant 

site; 

(F) Location of the declared plant site; 

(G) Name of plant site where the 

production of UDOCs exceeds the 

applicable declaration threshold; 

(H) Owner of plant site where the 

production of UDOCs exceeds the 

applicable declaration threshold, 

including telephone number and 

facsimile number; 

(I) Operator of plant site where the 

production of UDOCs exceeds the 

applicable declaration threshold, 

including telephone number and 

facsimile number; and 

(J) Details on the next declaration or 

report submission on whether the new 

owner will submit the declaration or 

report for the entire calendar year 

during which the ownership change 

occurred, or whether the previous 

owner and new owner will submit 

separate declarations or report for the 

periods of the calendar year during 

which each owned the plant site.

Note 1 to § 715.2(b): You must submit an 

amendment to your most recently submitted 

declaration or report for declaring changes to 

internal company information (e.g., company 

name change) or changes in ownership of a 

facility or trading company that have 

occurred since the submission of this 

declaration or report. BIS will process the 

amendment to ensure current information is 

on file regarding the facility or trading 

company (e.g., for inspection notifications 

and correspondence) and will also forward 

the amended declaration to the OPCW to 

ensure that they also have current 

information on file regarding your facility or 

trading company.

Note 2 to § 715.2(b): You may notify BIS of 

change in ownership via a letter to the 

address given in § 711.6 of the CWCR. If you 

are submitting an amended declaration, use 

Form B to address details regarding the sale 

of the declared plant site.

Note 3 to § 715.2(b): For ownership 

changes, the declared plant site will maintain 

its original U.S. Code Number, unless the 

plant site is sold to multiple owners, at 

which time BIS will assign new U.S. Code 

Numbers.

(c) Inspection-related amendments. If, 

following completion of an inspection 

(see parts 716 or 717 of the CWCR), you 

are required to submit an amended 

declaration based on the final 

inspection report, BIS will notify you in 

writing of the information that will be 

required pursuant to §§ 716.10 and 

717.5 of the CWCR. You must submit an 

amended declaration to BIS no later 

than 45 days following your receipt of 

BIS’s post inspection letter. 

(d) Non-substantive changes. If, 

subsequent to the submission of your 

declaration to BIS, you discover one or 

more non-substantive typographical 

errors in your declaration, you are not 

required to submit an amended 

declaration to BIS. Instead, you may 

correct these errors in a subsequent 

declaration.

(e) Documentation required for 

amended declarations. If you are 

required to submit an amended 

declaration to BIS pursuant to paragraph 

(a), (b), or (c) of this section, you must 

submit either: 

(1) A letter containing all of the 

corrected information required, in 

accordance with the provisions of this 

section, to amend your declaration; or 

(2) Both of the following: 

(i) A new Certification Form; and 

(ii) The specific form required for the 

declaration containing the corrected 

information required, in accordance 

with the requirements of this section, to 

amend your declaration.

§ 715.3 Declarations returned without 

action by BIS. 

If you submit a declaration and BIS 

determines that the information 

contained therein is not required by the 

CWCR, BIS will return the original 

declaration to you, without action, 

accompanied by a letter explaining 

BIS’s decision. In order to protect your 

Federal Register / Vol. 69, No. 234 / Tuesday, December 7, 2004 / Proposed Rules 70793

confidential business information, BIS 

will not maintain a copy of any 

declaration that is returned without 

action. However, BIS will maintain a 

copy of the RWA letter.

§ 715.4 Deadlines for submitting UDOC 

declarations, no changes authorization 

forms, and amendments. 

Declarations, no changes 

authorization forms, and amendments 

required under this part must be 

postmarked by the appropriate dates 

identified in Supplement No. 3 to this 

part 715 of the CWCR. Required 

declarations include: 

(a) Annual declaration on past 

activities (UDOC production during the 

previous calendar year); 

(b) No changes authorization form 

(may be completed and submitted to BIS 

when there are no changes to any 

information in your plant site’s 

previously submitted annual declaration 

on past activities, except the certifying 

official and the dates signed and 

submitted); and 

(c) Amended declaration.

Supplement No. 1 to Part 715—Definition of 

an Unscheduled Discrete Organic Chemical 

Unscheduled discrete organic chemical 

means any chemical: (1) Belonging to the 

class of chemical compounds consisting of 

all compounds of carbon except for its 

oxides, sulfides and metal carbonates 

identifiable by chemical name, by structural 

formula, if known, and by Chemical Abstract 

Service registry number, if assigned; and (2) 

that is not contained in the Schedules of 

Chemicals (see Supplements No. 1 to parts 

712 through 714 of this subchapter). 

Unscheduled discrete organic chemicals 

subject to declaration under this part are 

those produced by synthesis that are isolated 

for use or sale as a specific end-product.

Note: Carbon oxides consist of chemical 

compounds that contain only the elements 

carbon and oxygen and have the chemical 

formula CxOy, where x and y denote integers. 

The two most common carbon oxides are 

carbon monoxide (CO) and carbon dioxide 

(CO2). Carbon sulfides consist of chemical 

compounds that contain only the elements 

carbon and sulfur, and have the chemical 

formula CaSb, where a and b denote integers. 

The most common carbon sulfide is carbon 

disulfide (CS2). Metal carbonates consist of 

chemical compounds that contain a metal 

(i.e., the Group I Alkalis, Groups II Alkaline 

Earths, the Transition Metals, or the elements 

aluminum, gallium, indium, thallium, tin, 

lead, bismuth or polonium), and the elements 

carbon and oxygen. Metal carbonates have 

the chemical formula Md(CO3)e, where d and 

e denote integers and M represents a metal. 

Common metal carbonates are sodium 

carbonate (Na2CO3) and calcium carbonate 

(CaCO3). In addition, metal carbides or other 

compounds consisting of only a metal, as 

described in this Note, and carbon (e.g.,

calcium carbide (CaC2)), are exempt from 

declaration requirements (see

§ 715.1(a)(2)(ii)(D)).

Supplement No. 2 to Part 715—Examples of 

Unscheduled Discrete Organic Chemicals 

(UDOCs) and UDOC Production 

(1) Examples of UDOCs not subject to 

declaration include: 

(i) UDOCs produced coincidentally as byproducts that are not isolated for use or sale 

as a specific end product, and are routed to, 

or escape from, the waste stream of a stack, 

incinerator, or waste treatment system or any 

other waste stream; 

(ii) UDOCs, contained in mixtures, which 

are produced coincidentally and not isolated 

for use or sale as a specific end-product; 

(iii) UDOCs produced by recycling (i.e.,

involving one of the processes listed in 

paragraph (3) of this supplement) of 

previously declared UDOCs; 

(iv) UDOCs produced by the mixing (i.e.,

the process of combining or blending into 

one mass) of previously declared UDOCs; 

and 

(v) UDOCs that are intermediates and that 

are used in a single or multi-step process to 

produce another declared UDOC. 

(2) Examples of UDOCs that you must 

declare under part 715 include, but are not 

limited to, the following, unless they are not 

isolated for use or sale as a specific end 

product: 

(i) Acetophenone (CAS # 98–86–2); 

(ii) 6-Chloro-2-methyl aniline (CAS # 87–

63–8); 

(iii) 2-Amino-3-hydroxybenzoic acid (CAS 

# 548–93–6); and 

(iv) Acetone (CAS # 67–64–1). 

(3) Examples of activities that are not 

considered production by synthesis under 

part 715 and, thus, the end products resulting 

from such activities would not be declared 

under part 715, are as follows: 

(i) Fermentation; 

(ii) Extraction; 

(iii) Purification; 

(iv) Distillation; and 

(v) Filtration.

SUPPLEMENT NO. 3 TO PART 715—DEADLINES FOR SUBMISSION OF DECLARATIONS, NO CHANGES AUTHORIZATION

FORMS, AND AMENDMENTS FOR UNSCHEDULED DISCRETE ORGANIC CHEMICAL (UDOC) FACILITIES

Declarations Applicable forms Due dates 

Annual Declaration on Past Activities (previous 

calendar year).

Declared plant site 

Certification, UDOC, A (as appropriate), B 

(optional).

February 28 of the year following any calendar year in which the production of 

UDOCs exceeded the applicable declaration threshold in § 715.1(a)(1) of the CWCR. 

No Changes Authorization Form (declaration 

required, but no changes to data contained in 

previously submitted annual declaration on 

past activities (previous calendar year).

Declared plant site 

No Changes Authorization Form ..................... February 28 of the year following any calendar year in which the production of 

UDOCs exceeded the applicable declaration threshold in § 715.1(a)(1) of the CWCR. 

Amended Declaration 

—Declaration information ............................

—Company information 

—Post-inspection letter 

Certification, UDOC, A (as appropriate), B 

(optional).

—15 calendar days after change in information. 

—30 calendar days after change in information. 

—45 calendar days after receipt of letter. 

PART 716—INITIAL AND ROUTINE 

INSPECTIONS OF DECLARED 

FACILITIES

Sec. 

716.1 General information on the conduct 

of initial and routine inspections. 

716.2 Purposes and types of inspections of 

declared facilities. 

716.3 Consent to inspections; warrants for 

inspections. 

716.4 Scope and conduct of inspections. 

716.5 Notification, duration and frequency 

of inspections. 

716.6 Facility agreements. 

716.7 Samples. 

716.8 On-site monitoring of Schedule 1 

facilities. 

716.9 Report of inspection-related costs. 

716.10 Post inspection activities. 

Supplement No. 1 to Part 716—Notification, 

Duration, and Frequency of Inspections. 

Supplement No. 2 to Part 716—[Reserved]. 

Supplement No. 3 to Part 716—[Reserved].

Authority: 22 U.S.C. 6701 et seq.; E.O. 

13128, 64 FR 36703, 3 CFR, 1999 Comp., p. 

199.

70794 Federal Register / Vol. 69, No. 234 / Tuesday, December 7, 2004 / Proposed Rules 

§ 716.1 General information on the 

conduct of initial and routine inspections. 

This part provides general 

information about the conduct of initial 

and routine inspections of declared 

facilities subject to inspection under 

CWC Verification Annex Part VI (E), 

Part VII(B), Part VIII(B) and Part IX(B). 

See part 717 of this subchapter for 

provisions concerning challenge 

inspections. 

(a) Overview. Each State Party to the 

CWC, including the United States, has 

agreed to allow certain inspections of 

declared facilities by inspection teams 

employed by the Organization for the 

Prohibition of Chemical Weapons 

(OPCW) to ensure that activities are 

consistent with obligations under the 

Convention. BIS is responsible for 

leading, hosting and escorting 

inspections of all facilities subject to the 

provisions of this subchapter (see

§ 710.2 of this subchapter). 

(b) Declared facilities subject to initial 

and routine inspections. (1) Schedule 1 

facilities. (i) Your declared facility is 

subject to inspection if it produced in 

excess of 100 grams aggregate of 

Schedule 1 chemicals in the previous 

calendar year or anticipates producing 

in excess of 100 grams aggregate of 

Schedule 1 chemicals during the next 

calendar year. 

(ii) If you are a new Schedule 1 

production facility pursuant to § 712.4 

of the CWCR, your facility is subject to 

an initial inspection within 200 days of 

submitting an initial declaration.

Note to paragraph (b)(1): All Schedule 1 

facilities submitting a declaration are subject 

to inspection.

(2) Schedule 2 plant sites. (i) Your 

declared plant site is subject to 

inspection if at least one plant on your 

plant site produced, processed or 

consumed, in any of the three previous 

calendar years, or you anticipate that at 

least one plant on your plant site will 

produce, process or consume in the next 

calendar year, any Schedule 2 chemical 

in excess of the following: 

(A) 10 kg of chemical BZ: 3-

Quinuclidinyl benzilate (see Schedule 

2, Part A, paragraph 3 in Supplement 

No. 1 to part 713 of this subchapter); 

(B) 1 metric ton of chemical PFIB: 

1,1,3,3,3-Pentafluoro-2(trifluoromethyl)-

1-propene or any chemical belonging to 

the Amiton family (see Schedule 2, Part 

A, paragraphs 1 and 2 in Supplement 

No. 1 to part 713 of this subchapter); or 

(C) 10 metric tons of any chemical 

listed in Schedule 2, Part B (see

Supplement No. 1 to part 713 of this 

subchapter). 

(ii) Initial inspection for new 

Schedule 2 plant sites. Your declared 

plant site is subject to an initial 

inspection within the first year after 

submitting a declaration, if at least one 

plant on your plant site produced, 

processed or consumed in any of the 

three previous years, or you anticipate 

that at least one plant on your plant site 

will produce, process or consume in the 

next calendar year, any Schedule 2 

chemical in excess of the threshold 

quantities set forth in paragraphs 

(b)(2)(i)(A) through (C) of this section.

Note to paragraph (b)(2): The applicable 

inspection threshold for Schedule 2 plant 

sites is ten times higher than the applicable 

declaration threshold. Only declared plant 

sites, comprising at least one declared plant 

that exceeds the applicable inspection 

threshold, are subject to inspection.

(3) Schedule 3 plant sites. Your 

declared plant site is subject to 

inspection if the declared plants on your 

plant site produced during the previous 

calendar year, or you anticipate they 

will produce in the next calendar year, 

in excess of 200 metric tons aggregate of 

any Schedule 3 chemical.

Note to paragraph (b)(3): The methodology 

for determining a declarable and inspectable 

plant site is different. A Schedule 3 plant site 

that submits a declaration is subject to 

inspection only if the aggregate production of 

a Schedule 3 chemical at all declared plants 

on the plant site exceeds 200 metric tons.

(4) Unscheduled discrete organic 

chemical plant sites. Your declared 

plant site is subject to inspection if it 

produced by synthesis more than 200 

metric tons aggregate of unscheduled 

discrete organic chemicals (UDOC) 

during the previous calendar year.

Note 1 to paragraph (b)(4): You must 

include amounts of unscheduled discrete 

organic chemicals containing phosphorus, 

sulfur or fluorine in the calculation of your 

plant site’s aggregate production of 

unscheduled discrete organic chemicals.

Note 2 to paragraph (b)(4): All UDOC plant 

sites that submit a declaration based on 

§ 715.1(a)(1)(i) of the CWCR are subject to a 

routine inspection.

(c) Responsibilities of the Department 

of Commerce. As the host and escort for 

the international Inspection Team for all 

inspections of facilities subject to the 

provisions of the CWCR under this part, 

BIS will: 

(1) Lead on-site inspections; 

(2) Provide Host Team notification to 

the facility of an impending inspection; 

(3) Take appropriate action to obtain 

an administrative warrant in the event 

the facility does not consent to the 

inspection; 

(4) Dispatch an advance team to the 

vicinity of the site to provide 

administrative and logistical support for 

the impending inspection and, upon 

request, to assist the facility with 

inspection preparation; 

(5) Escort the Inspection Team on-site 

throughout the inspection process; 

(6) Assist the Inspection Team with 

verification activities; 

(7) Negotiate the development of a 

site-specific facility agreement, if 

appropriate (see § 716.6); and 

(8) Ensure that an inspection adheres 

to the Convention, the Act and any 

warrant issued thereunder, and a sitespecific facility agreement, if concluded.

§ 716.2 Purposes and types of inspections 

of declared facilities. 

(a) Schedule 1 facilities. (1) Purposes 

of inspections. The aim of inspections of 

Schedule 1 facilities is to verify that: 

(i) The facility is not used to produce 

any Schedule 1 chemical, except for the 

declared Schedule 1 chemicals; 

(ii) The quantities of Schedule 1 

chemicals produced, processed or 

consumed are correctly declared and 

consistent with needs for the declared 

purpose; and 

(iii) The Schedule 1 chemical is not 

diverted or used for purposes other than 

those declared.

(2) Types of inspections. (i) Initial 

inspections. (A) During initial 

inspections of declared Schedule 1 

facilities, in addition to the verification 

activities listed in paragraph (a)(1) of 

this section, the Host Team and the 

Inspection Team will draft site-specific 

facility agreements (see § 716.6) for the 

conduct of routine inspections. 

(B) For new Schedule 1 production 

facilities declared pursuant to § 712.4 of 

the CWCR, the U.S. National Authority, 

in coordination with BIS, will conclude 

a facility agreement with the OPCW 

before the facility begins producing 

above 100 grams aggregate of Schedule 

1 chemicals. 

(ii) Routine inspections. During 

routine inspections of declared 

Schedule 1 facilities, the verification 

activities listed in paragraph (a)(1) of 

this section will be carried out pursuant 

to site-specific facility agreements 

(§ 716.6) developed during the initial 

inspections and concluded between the 

U.S. Government and the OPCW 

pursuant to the Convention. 

(b) Schedule 2 plant sites. (1) 

Purposes of inspections. (i) The general 

aim of inspections of declared Schedule 

2 plant sites is to verify that activities 

are in accordance with obligations 

under the Convention and consistent 

with the information provided in 

declarations. Particular aims of 

inspections of declared Schedule 2 

plant sites are to verify: 

(A) The absence of any Schedule 1 

chemical, especially its production, 

Federal Register / Vol. 69, No. 234 / Tuesday, December 7, 2004 / Proposed Rules 70795

except in accordance with the 

provisions of the Convention; 

(B) Consistency with declarations of 

production, processing or consumption 

of Schedule 2 chemicals; and 

(C) Non-diversion of Schedule 2 

chemicals for activities prohibited 

under the Convention. 

(ii) During initial inspections, 

Inspection Teams shall collect 

information to determine the frequency 

and intensity of subsequent inspections 

by assessing the risk to the object and 

purpose of the Convention posed by the 

relevant chemicals, the characteristics of 

the plant site and the nature of the 

activities carried out there. The 

Inspection Team will take the following 

criteria into account, inter alia: 

(A) The toxicity of the scheduled 

chemicals and of the end-products 

produced with them, if any; 

(B) The quantity of the scheduled 

chemicals typically stored at the 

inspected site; 

(C) The quantity of feedstock 

chemicals for the scheduled chemicals 

typically stored at the inspected site; 

(D) The production capacity of the 

Schedule 2 plants; and 

(E) The capability and convertibility 

for initiating production, storage and 

filling of toxic chemicals at the 

inspected site. 

(2) Types of inspections. (i) Initial 

inspections. During initial inspections 

of declared Schedule 2 plant sites, in 

addition to the verification activities 

listed in paragraph (b)(1) of this section, 

the Host Team and the Inspection Team 

will generally draft site-specific facility 

agreements for the conduct of routine 

inspections (see § 716.6). 

(ii) Routine inspections. During 

routine inspections of declared 

Schedule 2 plant sites, the verification 

activities listed in paragraph (b)(1) of 

this section will be carried out pursuant 

to any appropriate site-specific facility 

agreements developed during the initial 

inspections (see § 716.6), and concluded 

between the U.S. Government and the 

OPCW pursuant to the Convention and 

the Act. 

(c) Schedule 3 plant sites. (1) 

Purposes of inspections. The general 

aim of inspections of declared Schedule 

3 plant sites is to verify that activities 

are consistent with the information 

provided in declarations. The particular 

aim of inspections is to verify the 

absence of any Schedule 1 chemical, 

especially its production, except in 

accordance with the Convention. 

(2) Routine inspections. During 

routine inspections of declared 

Schedule 3 plant sites, in addition to the 

verification activities listed in paragraph 

(c)(1) of this section, the Host Team and 

the Inspection Team may draft sitespecific facility agreements for the 

conduct of subsequent routine 

inspections (see § 716.6). Although the 

Convention does not require facility 

agreements for declared Schedule 3 

plant sites, the owner, operator, 

occupant or agent in charge of a plant 

site may request one. The Host Team 

will not seek a facility agreement if the 

owner, operator, occupant or agent in 

charge of the plant site does not request 

one. Subsequent routine inspections 

will be carried out pursuant to sitespecific facility agreements, if 

applicable. 

(d) Unscheduled discrete organic 

chemical plant sites. (1) Purposes of 

inspections. The general aim of 

inspections of declared UDOC plant 

sites is to verify that activities are 

consistent with the information 

provided in declarations. The particular 

aim of inspections is to verify the 

absence of any Schedule 1 chemical, 

especially its production, except in 

accordance with the Convention. 

(2) Routine inspections. During 

routine inspections of declared UDOC 

plant sites, in addition to the 

verification activities listed in paragraph 

(d)(1) of this section, the Host Team and 

the Inspection Team may develop draft 

site-specific facility agreements for the 

conduct of subsequent routine 

inspections (see § 716.6). Although the 

Convention does not require facility 

agreements for declared UDOC plant 

sites, the owner, operator, occupant or 

agent in charge of a plant site may 

request one. The Host Team will not 

seek a facility agreement if the owner, 

operator, occupant or agent in charge of 

the plant site does not request one. 

Subsequent routine inspections will be 

carried out pursuant to site-specific 

facility agreements, if applicable.

§ 716.3 Consent to inspections; warrants 

for inspections. 

(a) The owner, operator, occupant or 

agent in charge of a facility may consent 

to an initial or routine inspection. The 

individual giving consent on behalf of 

the facility represents that he or she has 

the authority to make this decision for 

the facility. 

(b) In instances where consent is not 

provided by the owner, operator, 

occupant or agent in charge for an initial 

or routine inspection, BIS will seek 

administrative warrants as provided by 

the Act.

§ 716.4 Scope and conduct of inspections. 

(a) General. Each inspection shall be 

limited to the purposes described in 

§ 716.2 and shall be conducted in the 

least intrusive manner, consistent with 

the effective and timely 

accomplishment of its purpose as 

provided in the Convention. 

(b) Scope. (1) Description of 

inspections. During inspections, the 

Inspection Team: 

(i) Will receive a pre-inspection 

briefing from facility representatives; 

(ii) Will visually inspect the facilities 

or plants producing scheduled 

chemicals or UDOCs, which may 

include storage areas, feed lines, 

reaction vessels and ancillary 

equipment, control equipment, 

associated laboratories, first aid or 

medical sections, and waste and effluent 

handling areas, as necessary to 

accomplish their inspection; 

(iii) May visually inspect other parts 

or areas of the plant site to clarify an 

ambiguity that has arisen during the 

inspection; 

(iv) May take photographs or conduct 

formal interviews of facility personnel; 

(v) May examine relevant records; and 

(vi) May take samples as provided by 

the Convention, the Act and consistent 

with the requirements set forth by the 

Director of the United States National 

Authority, at 22 CFR part 103, and the 

facility agreement, if applicable. 

(2) Scope of consent. When an owner, 

operator, occupant, or agent in charge of 

a facility consents to an initial or 

routine inspection, he or she is 

consenting to provide access to the 

Inspection Team and Host Team to any 

area of the facility, any item located on 

the facility, interviews with facility 

personnel, and any records necessary 

for the Inspection Team to complete its 

mission pursuant to paragraph (a) of this 

section, except for information subject 

to export control under ITAR (22 CFR 

parts 120 through 130) (see paragraph 

(b)(3) of this section). When consent is 

granted for an inspection, the owner, 

operator, occupant, or agent in charge 

agrees to provide the same degree of 

access provided for under section 305 of 

the Act. The determination of whether 

the Inspection Team’s request to inspect 

any area, building, item or record is 

reasonable is the responsibility of the 

Host Team Leader. 

(3) ITAR-controlled technology. ITARcontrolled technology shall not be 

divulged to the Inspection Team 

without U.S. Government authorization. 

Facilities being inspected are 

responsible for the identification of 

ITAR-controlled technology to the BIS 

Host Team, if known. 

(c) Pre-inspection briefing. Upon 

arrival of the Inspection Team and Host 

Team at the inspection site and before 

commencement of the inspection, 

facility representatives will provide the 

Inspection Team and Host Team with a 

70796 Federal Register / Vol. 69, No. 234 / Tuesday, December 7, 2004 / Proposed Rules 

pre-inspection briefing on the facility, 

the activities carried out there, safety 

measures, and administrative and 

logistical arrangements necessary for the 

inspection, which may be aided with 

the use of maps and other 

documentation as deemed appropriate 

by the facility. The time spent for the 

briefing will be limited to the minimum 

necessary and may not exceed three 

hours. 

(1) The pre-inspection briefing will 

address: 

(i) Facility health and safety issues 

and requirements, and associated alarm 

systems; 

(ii) Declared facility activities, 

business and manufacturing operations; 

(iii) Physical layout; 

(iv) Delimitation of declared facility; 

(v) Scheduled chemicals on the 

facility (declared and undeclared); 

(vi) Block flow diagram or simplified 

process flow diagram; 

(vii) Plants and units specific to 

declared operations; 

(viii) Administrative and logistic 

information; and 

(ix) Data declaration updates/

revisions. 

(2) The pre-inspection briefing may 

also address, inter alia: 

(i) Introduction of key facility 

personnel; 

(ii) Management, organization and 

history; 

(iii) Confidential business information 

concerns; 

(iv) Types and location of records/

documents; 

(v) Draft facility agreement, if 

applicable; and 

(vi) Proposed inspection plan. 

(d) Visual plant inspection. The 

Inspection Team may visually inspect 

the declared plant or facility and other 

areas or parts of the plant site as agreed 

by the Host Team Leader after 

consulting with the facility 

representative. 

(e) Records review. The facility must 

provide the Inspection Team with 

access to all supporting materials and 

documentation used by the facility to 

prepare declarations and to comply with 

the CWCR (see §§ 721.1 and 721.2 of the 

CWCR) and with appropriate 

accommodations in which the 

Inspection Team can review these 

supporting materials and 

documentation. Such access will be 

provided in appropriate formats (e.g., 

paper copies, electronic remote access 

by computer, microfilm, or microfiche) 

through the U.S. Government Host 

Team to Inspection Teams during the 

inspection period or as otherwise agreed 

upon by the Inspection Team and Host 

Team Leader. If a facility does not have 

access to records for activities that took 

place under previous ownership, the 

previous owner must make such records 

available to the Host Team for provision 

to the Inspection Team in accordance 

with section 305 of the Act. 

(f) Effect of facility agreements.

Routine inspections at facilities for 

which the United States has concluded 

a facility agreement with the OPCW will 

be conducted in accordance with the 

facility agreement. The existence of a 

facility agreement does not in any way 

limit the right of the owner, operator, 

occupant, or agent in charge of the 

facility to withhold consent to an 

inspection request. 

(g) Hours of inspections. Consistent 

with the provisions of the Convention, 

the Host Team will ensure, to the extent 

possible, that each inspection is 

commenced, conducted, and concluded 

during ordinary working hours, but no 

inspection shall be prohibited or 

otherwise disrupted from commencing, 

continuing or concluding during other 

hours. 

(h) Health and safety regulations and 

requirements. In carrying out their 

activities, the Inspection Team and Host 

Team shall observe federal, state, and 

local health and safety regulations and 

health and safety requirements 

established at the inspection site, 

including those for the protection of 

controlled environments within a 

facility and for personal safety. Such 

health and safety regulations and 

requirements will be set forth in, but 

will not necessarily be limited to, the 

facility agreement, if applicable. 

(i) Preliminary findings. Upon 

completion of an inspection, the 

Inspection Team will meet with the 

Host Team and facility personnel to 

review the written preliminary findings 

of the Inspection Team and to clarify 

ambiguities. The Host Team will discuss 

the preliminary findings with the 

facility, and the Host Team Leader will 

take into consideration the facility’s 

input when providing official comments 

on the preliminary findings to the 

Inspection Team. This meeting will be 

completed not later than 24 hours after 

the completion of the inspection.

§ 716.5 Notification, duration and 

frequency of inspections. 

(a) Inspection notification. (1)(i) 

Content of notice. Inspections of 

facilities may be made only upon 

issuance of written notice by the United 

States National Authority (USNA) to the 

owner and to the operator, occupant or 

agent in charge of the premises to be 

inspected. BIS will also provide a 

separate inspection notification to the 

inspection point of contact identified in 

declarations submitted by the facility. If 

the United States is unable to provide 

actual written notice to the owner, 

operator, or agent in charge, BIS (or the 

Federal Bureau of Investigation, if BIS is 

unable) may post notice prominently at 

the facility to be inspected. The notice 

shall include all appropriate 

information provided by the OPCW to 

the USNA concerning: 

(A) The type of inspection; 

(B) The basis for the selection of the 

facility or location for the type of 

inspection sought; 

(C) The time and date that the 

inspection will begin and the period 

covered by the inspection; and 

(D) The names and titles of the 

Inspection Team members. 

(ii) Consent to inspection. In addition 

to appropriate information provided by 

the OPCW in its notification to the 

USNA, BIS’s inspection notification will 

request that the facility indicate whether 

it will consent to an inspection, and will 

state whether an advance team is 

available to assist the site in preparation 

for the inspection. If an advance team is 

available, facilities that request advance 

team assistance are not required to 

reimburse the U.S. Government for costs 

associated with these activities. If a 

facility does not agree to provide 

consent to an inspection within four 

hours of receipt of the inspection 

notification, BIS will seek an 

administrative warrant. 

(iii) The following table sets forth the 

notification procedures for inspection:

TABLE TO § 716.5(a)(1) 

Activity Agency Action Facility action 

(A) OPCW notification of inspection.(1) U.S. National Authority transmits actual written notice and inspection authorization to the owner and 

operator, occupant, or agent in charge via facsimile 

within 6 hours.

Acknowledges receipt of facsimile. 

Federal Register / Vol. 69, No. 234 / Tuesday, December 7, 2004 / Proposed Rules 70797

TABLE TO § 716.5(a)(1)—Continued

Activity Agency Action Facility action 

(2) Upon notification from the U.S. National Authority, 

BIS immediately transmits inspection notification via 

facsimile to the inspection point of contact to ascertain whether the facility (i) grants consent and (ii) requests assistance in preparing for the inspection. In 

absence of consent within four hours of facility receipt, BIS intends to seek an administrative warrant.

(A) Indicates whether it grants consent. 

(B) May request advance team support. No requirement for reimbursement of U.S. Government services. 

(B) Preparation for inspection.BIS advance team generally arrives in the vicinity of the 

facility to be inspected 1–2 days after OPCW notification for logistical and administrative preparations.

If advance team support is provided, facility works with 

the advance team oninspection-related issues. 

(2) Timing of notice. (i) Schedule 1 

facilities. For declared Schedule 1 

facilities, the Technical Secretariat will 

notify the USNA of an initial inspection 

not less than 72 hours prior to arrival of 

the Inspection Team in the United 

States, and will notify the USNA of a 

routine inspection not less than 24 

hours prior to arrival of the Inspection 

Team in the United States. The USNA 

will provide written notice to the owner 

and to the operator, occupant or agent 

in charge of the premises within six 

hours of receiving notification from the 

OPCW Technical Secretariat or as soon 

as possible thereafter. BIS will provide 

Host Team notice to the inspection 

point of contact of the facility as soon 

as possible after the OPCW notifies the 

USNA of the inspection. 

(ii) Schedule 2 plant sites. For 

declared Schedule 2 plant sites, the 

Technical Secretariat will notify the 

USNA of an initial or routine inspection 

not less than 48 hours prior to arrival of 

the Inspection Team at the plant site to 

be inspected. The USNA will provide 

written notice to the owner and to the 

operator, occupant or agent in charge of 

the premises within six hours of 

receiving notification from the OPCW 

Technical Secretariat or as soon as 

possible thereafter. BIS will provide 

Host Team notice to the inspection 

point of contact at the plant site as soon 

as possible after the OPCW notifies the 

USNA of the inspection. 

(iii) Schedule 3 and UDOC plant sites.

For declared Schedule 3 and UDOC 

plant sites, the Technical Secretariat 

will notify the USNA of a routine 

inspection not less than 120 hours prior 

to arrival of the Inspection Team at the 

plant site to be inspected. The USNA 

will provide written notice to the owner 

and to the operator, occupant or agent 

in charge of the premises within six 

hours of receiving notification from the 

OPCW Technical Secretariat or as soon 

as possible thereafter. BIS will provide 

Host Team notice to the inspection 

point of contact of the plant site as soon 

as possible after the OPCW notifies the 

USNA of the inspection. 

(b) Period of inspections. (1) Schedule 

1 facilities. For a declared Schedule 1 

facility, the Convention does not specify 

a maximum duration for an initial 

inspection. The estimated period of 

routine inspections will be as stated in 

the facility agreement, unless extended 

by agreement between the Inspection 

Team and the Host Team Leader, and 

will be based on the risk to the object 

and purpose of the Convention posed by 

the quantities of chemicals produced, 

the characteristics of the facility and the 

nature of the activities carried out there. 

The Host Team Leader will consult with 

the inspected facility on any request for 

extension of an inspection prior to 

making an agreement with the 

Inspection Team. Activities involving 

the pre-inspection briefing and 

preliminary findings are in addition to 

inspection activities. See § 716.4(c) and 

(i) for a description of these activities. 

(2) Schedule 2 plant sites. For 

declared Schedule 2 plant sites, the 

maximum duration of initial and 

routine inspections shall be 96 hours, 

unless extended by agreement between 

the Inspection Team and the Host Team 

Leader. The Host Team Leader will 

consult with the inspected plant site on 

any request for extension of an 

inspection prior to making an agreement 

with the Inspection Team. Activities 

involving the pre-inspection briefing 

and preliminary findings are in addition 

to inspection activities. See § 716.4(c) 

and (i) for a description of these 

activities. 

(3) Schedule 3 and UDOC plant sites.

For declared Schedule 3 or UDOC plant 

sites, the maximum duration of routine 

inspections shall be 24 hours, unless 

extended by agreement between the 

Inspection Team and the Host Team 

Leader. The Host Team Leader will 

consult with the inspected plant site on 

any request for extension of an 

inspection prior to making an agreement 

with the Inspection Team. Activities 

involving the pre-inspection briefing 

and preliminary findings are in addition 

to inspection activities. See § 716.4(c) 

and (i) for a description of these 

activities. 

(c) Frequency of inspections. The 

frequency of inspections is as follows: 

(1) Schedule 1 facilities. As provided 

by the Convention, the frequency of 

inspections at declared Schedule 1 

facilities is determined by the OPCW 

based on the risk to the object and 

purpose of the Convention posed by the 

quantities of chemicals produced, the 

characteristics of the facility and the 

nature of the activities carried out at the 

facility. The frequency of inspections 

will be stated in the facility agreement. 

(2) Schedule 2 plant sites. As 

provided by the Convention and the 

Act, the maximum number of 

inspections at declared Schedule 2 plant 

sites is 2 per calendar year per plant 

site. The OPCW will determine the 

frequency of routine inspections for 

each declared Schedule 2 plant site 

based on the Inspection Team’s 

assessment of the risk to the object and 

purpose of the Convention posed by the 

relevant chemicals, the characteristics of 

the plant site, and the nature of the 

activities carried out there. The 

frequency of inspections will be stated 

in the facility agreement, if applicable. 

(3) Schedule 3 plant sites. As 

provided by the Convention, no 

declared Schedule 3 plant site may 

receive more than two inspections per 

calendar year and the combined number 

of inspections of Schedule 3 and UDOC 

plant sites in the United State may not 

exceed 20 per calendar year. 

(4) UDOC plant sites. As provided by 

the Convention, no declared UDOC 

plant site may receive more than two 

inspections per calendar year and the 

combined number of inspections of 

Schedule 3 and UDOC plant sites in the 

United States may not exceed 20 per 

calendar year.

§ 716.6 Facility agreements. 

(a) Description and requirements. A 

facility agreement is a site-specific 

agreement between the U.S. 

70798 Federal Register / Vol. 69, No. 234 / Tuesday, December 7, 2004 / Proposed Rules 

Government and the OPCW. Its purpose 

is to define procedures for inspections 

of a specific declared facility that is 

subject to inspection because of the type 

or amount of chemicals it produces, 

processes or consumes. 

(1) Schedule 1 facilities. The 

Convention requires that facility 

agreements be concluded between the 

United States and the OPCW for all 

declared Schedule 1 facilities. For new 

Schedule 1 production facilities 

declared pursuant to § 712.4 of the 

CWCR, the U.S. National Authority, in 

coordination with Department of 

Commerce, will conclude a facility 

agreement with the OPCW before the 

facility begins producing above 100 

grams aggregate of Schedule 1 

chemicals. 

(2) Schedule 2 plant sites. The USNA 

will ensure that such facility agreements 

are concluded with the OPCW unless 

the owner, operator, occupant or agent 

in charge of the plant site and the 

OPCW Technical Secretariat agree that 

such a facility agreement is not 

necessary.

(3) Schedule 3 and UDOC plant sites.

If the owner, operator, occupant or agent 

in charge of a declared Schedule 3 or 

UDOC plant site requests a facility 

agreement, the USNA will ensure that a 

facility agreement for such a plant site 

is concluded with the OPCW. 

(b) Notification; negotiation of draft 

and final facility agreements; and 

conclusion of facility agreements. Prior 

to the development of a facility 

agreement, BIS shall notify the owner, 

operator, occupant, or agent in charge of 

the facility, and if the owner, operator, 

occupant or agent in charge so requests, 

the notified person may participate in 

preparations with BIS representatives 

for the negotiation of such an 

agreement. During the initial or routine 

inspection of a declared facility, the 

Inspection Team and the Host Team 

will negotiate a draft facility agreement 

or amendment to a facility agreement. 

To the maximum extent practicable 

consistent with the Convention, the 

owner and the operator, occupant or 

agent in charge of the facility may 

observe facility agreement negotiations 

between the U.S. Government and 

OPCW. As a general rule, BIS will 

consult with the affected facility on the 

contents of the agreements and take 

facility’s into consideration during 

negotiations. BIS will participate in the 

negotiation of, and approve, all final 

facility agreements with the OPCW. 

Facilities will be notified of and have 

the right to observe final facility 

agreement negotiations between the 

United States and OPCW to the 

maximum extent practicable, consistent 

with the Convention. Prior to the 

conclusion of a final facility agreement, 

the affected facility will have an 

opportunity to comment on the facility 

agreement. BIS will give consideration 

to such comments prior to approving 

final facility agreements with the 

OPCW. The United States National 

Authority shall ensure that facility 

agreements for Schedule 1, Schedule 2, 

Schedule 3 and UDOC facilities are 

concluded, as appropriate, with the 

OPCW in coordination with BIS. 

(c) [Reserved] 

(d) Further information. For further 

information about facility agreements, 

please write or call: Treaty Compliance 

Division, Bureau of Industry and 

Security, U.S. Department of Commerce, 

1555 Wilson Boulevard, Suite 700, 

Arlington, VA 22209, Telephone: (703) 

605–4400.

§ 716.7 Samples. 

The owner, operator, occupant or 

agent in charge of a facility must 

provide a sample as provided for in the 

Convention and consistent with 

requirements set forth by the Director of 

the United States National Authority in 

22 CFR part 103. Analysis will be 

restricted to verifying the absence of 

undeclared scheduled chemicals, unless 

otherwise agreed after consultation with 

the facility representative.

§ 716.8 On-site monitoring of Schedule 1 

facilities. 

Declared Schedule 1 facilities are 

subject to verification by monitoring 

with on-site instruments as provided by 

the Convention. For facilities subject to 

the CWCR, however, such monitoring is 

not anticipated. The U.S. Government 

will ensure that any monitoring that 

may be requested by the OPCW is 

carried out pursuant to the Convention 

and U.S. law.

§ 716.9 Report of inspection-related costs. 

Pursuant to section 309(b)(5) of the 

Act, any facility that has undergone any 

inspections pursuant to the CWCR 

during a given calendar year must report 

to BIS within 90 days of an inspection 

on its total costs related to that 

inspection. Although not required, such 

reports should identify categories of 

costs separately if possible, such as 

personnel costs (production-line, 

administrative, legal), costs of 

producing records, and costs associated 

with shutting down chemical 

production or processing during 

inspections, if applicable. This 

information should be reported to BIS 

on company letterhead at the address 

given in § 716.6(d), with the following 

notation: ‘‘Attn: Report of inspectionrelated costs.’’

§ 716.10 Post inspection activities. 

BIS will forward a copy of the final 

inspection report to the inspected 

facility for their review upon receipt 

from the OPCW. Facilities may submit 

comments on the final inspection report 

to BIS, and BIS will consider them, to 

the extent possible, when commenting 

on the final report. BIS will also send 

facilities a post-inspection letter 

detailing the issues that require followup action, e.g., amended declaration 

requirement (see §§ 712.7(d), 713.5(d), 

714.4(d), and 715.2(c) of the CWCR), 

information on the status of the draft 

facility agreement, if applicable, and the 

date on which the report on inspectionrelated costs (see § 716.9 of the CWCR) 

is due to BIS.

SUPPLEMENT NO. 1 TO PART 716 NOTIFICATION, DURATION AND FREQUENCY OF INSPECTIONS

Schedule 1 Schedule 2 Schedule 3 Unscheduled discrete organic chemicals 

Notice of initial or routine 

inspection to USNA.

72 hours prior to arrival of 

Inspection Team at the 

point of entry (initial; 24 

hours prior to arrival of 

Inspection Team at the 

point of entry (routine).

48 hours prior to arrival of 

Inspection Team at the 

plant site.

120 hours prior to arrival 

of Inspection Team at 

the plant site.

120 hours prior to arrival 

of Inspection Team at 

the plant site. 

Duration of inspection ....... As specified in facility 

agreement.

96 hours ............................ 24 hours ............................ 24 hours. 

Federal Register / Vol. 69, No. 234 / Tuesday, December 7, 2004 / Proposed Rules 70799

SUPPLEMENT NO. 1 TO PART 716 NOTIFICATION, DURATION AND FREQUENCY OF INSPECTIONS—Continued

Schedule 1 Schedule 2 Schedule 3 Unscheduled discrete organic chemicals 

Maximum number of inspections.Determined by OPCW 

based on characteristics 

of facility and the nature 

of the activities carried 

out at the facility.

2 per calendar year per 

plant site.

2 per calendar year per 

plant site.

2 per calendar year per 

plant site. 

Notification of challenge inspection to USNA*.12 hours prior to arrival of inspection team at the point of entry 

Duration of Challenge 

inspection*.

84 hours 

* See part 717 of this subchapter 

Supplement No. 2 To Part 716—[RESERVED] 

Supplement No. 3 To Part 716—[RESERVED]

PART 717—CLARIFICATION OF 

POSSIBLE NON-COMPLIANCE WITH 

THE CONVENTION; CHALLENGE 

INSPECTION PROCEDURES

Sec. 

717. 1 Clarification procedures; challenge 

inspection requests pursuant to Article 

IX of the Convention. 

717.2 Challenge inspections. 

717.3 Samples. 

717.4 Report of inspection-related costs. 

717.5 Post inspection activities.

Authority: 22 U.S.C. 6701 et seq., 2681; 

E.O. 13128, 64 FR 36703, 3 CFR, 1999 Comp., 

p. 199.

§ 717.1 Clarification procedures; challenge 

inspection requests pursuant to Article IX 

of the Convention. 

(a) Article IX of the Convention sets 

forth procedures for clarification, 

between States Parties, of issues about 

compliance with the Convention. States 

Parties may attempt to resolve such 

issues through consultation between 

themselves or through the Organization 

for the Prohibition of Chemical 

Weapons (OPCW) or a State Party may 

request the OPCW to conduct an on-site 

challenge inspection of any facility or 

location in the territory or in any other 

place under the jurisdiction or control 

of any other State Party. Such an on-site 

challenge inspection request shall be for 

the sole purpose of clarifying and 

resolving any questions concerning 

possible non-compliance with the 

Convention. 

(b) Any person or facility subject to 

the CWCR (15 CFR parts 710 through 

729) must, within five working days 

from receipt of an official written BIS 

request for clarification, provide 

information required by BIS pursuant to 

an Article IX clarification request from 

another State Party, or the OPCW, 

concerning possible non-compliance 

with the CWC. BIS will contact the 

person or facility subject to the Article 

IX clarification as early as practical 

prior to the issuance of an official 

written request for clarification.

§ 717.2 Challenge inspections. 

Persons or facilities, whether or not 

they are required to submit declarations 

or reports, may be subject to a challenge 

inspection by the OPCW concerning 

possible non-compliance with the 

requirements of the Convention, other 

than U.S. Government facilities as 

defined in § 710.2(a). BIS will host and 

escort the international Inspection Team 

for challenge inspections in the United 

States of such persons or facilities. 

(a) Warrants. In instances where 

consent is not provided by the owner, 

operator, occupant or agent in charge of 

the facility or location, BIS will assist 

the Department of Justice in seeking a 

criminal warrant as provided by the Act. 

The existence of a facility agreement 

does not in any way limit the right of 

the operator of the facility to withhold 

consent to a challenge inspection 

request. 

(b) Notification of challenge 

inspection. Challenge inspections may 

be made only upon issuance of written 

notice by the United States National 

Authority (USNA) to the owner and to 

the operator, occupant or agent in 

charge of the premises. BIS will provide 

inspection notification to the inspection 

point of contact at such time that a 

person or facility has been clearly 

established, if possible, and when such 

notification is deemed appropriate. If 

the United States is unable to provide 

actual written notice to the owner, 

operator, or agent in charge, BIS (or 

another appropriate agency, if BIS is 

unable) may post notice prominently at 

the plant, plant site or other facility or 

location to be inspected. 

(1) Timing. The OPCW will notify the 

USNA of a challenge inspection not less 

than 12 hours before the planned arrival 

of the Inspection Team at the U.S. point 

of entry. Written notice will be provided 

to the owner and to the operator, 

occupant, or agent in charge of the 

premises at any appropriate time 

determined by the USNA after receipt of 

notification from the OPCW Technical 

Secretariat. 

(2)(i) Content of notice. The notice 

shall include all appropriate 

information provided by the OPCW to 

the United States National Authority 

concerning:

(A) The type of inspection; 

(B) The basis for the selection of the 

facility or locations for the type of 

inspection sought; 

(C) The time and date that the 

inspection will begin and the period 

covered by the inspection; 

(D) The names and titles of the 

Inspection Team members; and 

(E) All appropriate evidence or 

reasons provided by the requesting State 

Party for seeking the inspection. 

(ii) In addition to appropriate 

information provided by the OPCW in 

its notification to the USNA, BIS’s 

inspection notification to the facility 

will state whether an advance team is 

available to assist the site in preparation 

for the inspection. If an advance team is 

available, facilities that request advance 

team assistance are not required to 

reimburse the U.S. Government for costs 

associated with these activities. If a 

facility does not agree to provide 

consent to an inspection within four 

hours of receipt of the inspection 

notification, BIS will assist the 

Department of Justice in seeking a 

criminal warrant. 

(c) Period of inspection. Challenge 

inspections will not exceed 84 hours, 

unless extended by agreement between 

the Inspection Team and the Host Team 

Leader. 

(d) Scope and conduct of inspections.

(1) General. Each inspection shall be 

limited to the purposes described in this 

section and conducted in the least 

intrusive manner, consistent with the 

70800 Federal Register / Vol. 69, No. 234 / Tuesday, December 7, 2004 / Proposed Rules 

effective and timely accomplishment of 

its purpose as provided in the 

Convention. 

(2) Scope of inspections. If an owner, 

operator, occupant, or agent in charge of 

a facility or location consents to a 

challenge inspection, the inspection 

will be conducted in accordance with 

the provisions of Article IX and 

applicable provisions of the Verification 

Annex of the Convention. If consent is 

not granted, the inspection will be 

conducted in accordance with a 

criminal warrant, as provided by the 

Act, and in accordance with the 

provisions of Article IX and applicable 

provisions of the Verification Annex of 

the Convention. 

(3) Hours of inspections. Consistent 

with the provisions of the Convention, 

the Host Team will ensure, to the extent 

possible, that each inspection is 

commenced, conducted, and concluded 

during ordinary working hours, but no 

inspection shall be prohibited or 

otherwise disrupted from commencing, 

continuing or concluding during other 

hours. 

(4) Health and safety regulations and 

requirements. In carrying out their 

activities, the Inspection Team and Host 

Team shall observe federal, state, and 

local health and safety regulations and 

health and safety requirements 

established at the inspection site, 

including those for the protection of 

controlled environments within a 

facility and for personal safety. 

(5) Pre-inspection briefing. Upon 

arrival of the Inspection Team and the 

Host Team in the vicinity of the 

inspection site and before 

commencement of the inspection, 

facility representatives will provide the 

Inspection Team and the Host Team 

with a pre-inspection briefing 

concerning the facility, the activities 

carried out there, safety measures, and 

administrative and logistical 

arrangements necessary for the 

inspection, which may be aided with 

the use of maps and other 

documentation as deemed appropriate 

by the facility. The time spent for the 

briefing will be limited to the minimum 

necessary and may not exceed three 

hours.

§ 717.3 Samples. 

The owner, operator, occupant or 

agent in charge of a facility or location 

must provide a sample, as provided for 

in the Convention and consistent with 

requirements set forth by the Director of 

the United States National Authority in 

22 CFR part 103. Analysis may be 

restricted to verifying the presence or 

absence of Schedule 1, 2, or 3 

chemicals, or appropriate degradation 

products, unless agreed otherwise.

§ 717.4 Report of inspection-related costs. 

Pursuant to section 309(b)(5) of the 

Act, any facility that has undergone any 

inspections pursuant to this subchapter 

during a given calendar year must report 

to BIS within 90 days of an inspection 

on its total costs related to that 

inspection. Although not required, such 

reports should identify categories of 

costs separately if possible, such as 

personnel costs (production-line, 

administrative, legal), costs of 

producing records, and costs associated 

with shutting down chemical 

production or processing during 

inspections, if applicable. This 

information should be reported to BIS 

on company letterhead at the address 

given in § 716.6(d) of this subchapter, 

with the following notation: ‘‘ATTN: 

Report of Inspection-related Costs.’’

§ 717.5 Post inspection activities. 

BIS will forward a copy of the final 

inspection report to the inspected 

facility for their review upon receipt 

from the OPCW. Facilities may submit 

comments on the final inspection report 

to BIS, and BIS will consider them, to 

the extent possible, when commenting 

on the final report. BIS will also send 

facilities a post-inspection letter 

detailing the issues that require followup action and the date on which the 

report on inspection-related costs (see 

§ 717.4 of the CWCR) is due to BIS.

PART 718—CONFIDENTIAL BUSINESS 

INFORMATION

Sec. 

718.1 Definition. 

718.2 Identification of confidential business 

information. 

718.3 Disclosure of confidential business 

information. 

Supplement No. 1 to Part 718—Confidential 

Business Information Declared or 

Reported

Authority: 22 U.S.C. 6701 et seq.; E.O. 

13128, 64 FR 36703, 3 CFR, 1999 Comp., p. 

199.

§ 718.1 Definition. 

The Chemical Weapons Convention 

Implementation Act of 1998 (‘‘the Act’’) 

defines confidential business 

information as information included in 

categories specifically identified in 

sections 103(g)(1) and 304(e)(2) of the 

Act and other trade secrets as follows: 

(a) Financial data; 

(b) Sales and marketing data (other 

than shipment data); 

(c) Pricing data; 

(d) Personnel data; 

(e) Research data; 

(f) Patent data; 

(g) Data maintained for compliance 

with environmental or occupational 

health and safety regulations; 

(h) Data on personnel and vehicles 

entering and personnel and personal 

passenger vehicles exiting the site; 

(i) Any chemical structure; 

(j) Any plant design, process, 

technology or operating method; 

(k) Any operating requirement, input, 

or result that identifies any type or 

quantity of chemicals used, processed or 

produced; 

(l) Any commercial sale, shipment or 

use of a chemical; or 

(m) Information that qualifies as a 

trade secret under 5 U.S.C. 552(b)(4) 

(Freedom of Information Act), provided 

such trade secret is obtained from a U.S. 

person or through the U.S. Government.

§ 718.2 Identification of confidential 

business information. 

(a) General. Certain confidential 

business information submitted to BIS 

in declarations and reports does not 

need to be specifically identified and 

marked by the submitter, as described in 

paragraph (b) of this section. Other 

confidential business information 

submitted to BIS in declarations and 

reports and confidential business 

information provided to the Host Team 

during inspections must be identified by 

the inspected facility so that the Host 

Team can arrange appropriate marking 

and handling. 

(b) Confidential business information 

contained in declarations and reports.

(1) BIS has identified those data fields 

on the declaration and report forms that 

request ‘‘confidential business 

information’’ as defined by the Act. 

These data fields are identified in the 

table provided in Supplement No. 1 to 

this part. 

(2) You must specifically identify in 

a cover letter submitted with your 

declaration or report any additional 

information on a declaration or report 

form (i.e., information not provided in 

one of the data fields listed in the table 

included in Supplement No. 1 to this 

part), including information provided in 

attachments to Form A or Form B, that 

you believe is confidential business 

information, as defined by the Act, and 

must describe how disclosure would 

likely result in competitive harm.

Note to paragraph (b): BIS has also 

determined that descriptions of Schedule 1 

facilities submitted with Initial Declarations 

as attachments to Form A contain 

confidential business information, as defined 

by the Act.

(c) Confidential business information 

contained in advance notifications.

Information contained in advance 

notifications of exports and imports of 

Federal Register / Vol. 69, No. 234 / Tuesday, December 7, 2004 / Proposed Rules 70801

Schedule 1 chemicals is not subject to 

the confidential business information 

provisions of the Act. You must identify 

information in your advance 

notifications of Schedule 1 imports that 

you consider to be privileged and 

confidential, and describe how 

disclosure would likely result in 

competitive harm. See § 718.3(b) for 

provisions on disclosure to the public of 

such information by the U.S. 

Government. 

(d) Confidential business information 

related to inspections disclosed to, 

reported to, or otherwise acquired by, 

the U.S. Government. (1) During 

inspections, certain confidential 

business information, as defined by the 

Act, may be disclosed to the Host Team. 

Facilities being inspected are 

responsible for identifying confidential 

business information to the Host Team, 

so that if it is disclosed to the Inspection 

Team, appropriate marking and 

handling can be arranged, in accordance 

with the provisions of the Convention 

(see § 718.3(c)(1)(ii)). Confidential 

business information not related to the 

purpose of an inspection or not 

necessary for the accomplishment of an 

inspection, as determined by the Host 

Team, may be removed from sight, 

shrouded, or otherwise not disclosed. 

(2) Before or after inspections, 

confidential business information 

related to an inspection that is 

contained in any documents or that is 

reported to, or otherwise acquired by, 

the U.S. Government, such as facility 

information for pre-inspection briefings, 

facility agreements, and inspection 

reports, must be identified by the 

facility so that it may be appropriately 

marked and handled. If the U.S. 

Government creates derivative 

documents from such documents or 

reported information, they will also be 

marked and handled as confidential 

business information.

§ 718.3 Disclosure of confidential 

business information. 

(a) General. Confidentiality of 

information will be maintained by BIS 

consistent with the non-disclosure 

provisions of the Act, the Export 

Administration Regulations (15 CFR 

parts 730 through 799), the International 

Traffic in Arms Regulations (22 CFR 

parts 120 through 130), and applicable 

exemptions under the Freedom of 

Information Act, as appropriate. 

(b) Disclosure of confidential business 

information contained in advance 

notifications. Information contained in 

advance notifications of exports and 

imports of Schedule 1 chemicals is not 

subject to the confidential business 

information provisions of the Act. 

Disclosure of such information will be 

in accordance with the provisions of the 

relevant statutory and regulatory 

authorities as follows: 

(1) Exports of Schedule 1 chemicals.

Confidentiality of all information 

contained in these advance notifications 

will be maintained consistent with the 

non-disclosure provisions of the Export 

Administration Regulations (15 CFR 

parts 730 through 799), the International 

Traffic in Arms Regulations (22 CFR 

parts 120 through 130), and applicable 

exemptions under the Freedom of 

Information Act, as appropriate; and

(2) Imports of Schedule 1 chemicals.

Confidentiality of information contained 

in these advance notifications will be 

maintained pursuant to applicable 

exemptions under the Freedom of 

Information Act. 

(c) Disclosure of confidential business 

information pursuant to § 404(b) of the 

Act. (1) Disclosure to the Organization 

for the Prohibition of Chemical 

Weapons (OPCW).

(i) As provided by Section 404(b)(1) of 

the Act, the U.S. Government will 

disclose or otherwise provide 

confidential business information to the 

Technical Secretariat of the OPCW or to 

other States Parties to the Convention, 

in accordance with provisions of the 

Convention, particularly with the 

provisions of the Annex on the 

Protection of Confidential Information 

(Confidentiality Annex). 

(ii) Convention provisions. (A) The 

Convention provides that States Parties 

may designate information submitted to 

the Technical Secretariat as 

confidential, and requires the OPCW to 

limit access to, and prevent disclosure 

of, information so designated, except 

that the OPCW may disclose certain 

confidential information submitted in 

declarations to other States Parties if 

requested. The OPCW has developed a 

classification system whereby States 

Parties may designate the information 

they submit in their declarations as 

‘‘restricted,’’ ‘‘protected,’’ or ‘‘highly 

protected,’’ depending on the sensitivity 

of the information. Other States Parties 

are obligated, under the Convention, to 

store and restrict access to information 

which they receive from the OPCW in 

accordance with the level of 

confidentiality established for that 

information. 

(B) OPCW Inspection Team members 

are prohibited, under the terms of their 

employment contracts and pursuant to 

the Confidentiality Annex of the 

Convention, from disclosing to any 

unauthorized persons, for five years 

after termination of their employment, 

any confidential information coming to 

their knowledge or into their possession 

in the performance of their official 

duties. 

(iii) U.S. Government designation of 

information to the Technical 

Secretariat. It is the policy of the U.S. 

Government to designate all facility 

information it provides to the Technical 

Secretariat in declarations, reports and 

Schedule 1 advance notifications as 

‘‘protected.’’ It is the policy of the U.S. 

Government to designate confidential 

business information that it discloses to 

Inspection Teams during inspections as 

‘‘protected’’ or ‘‘highly protected,’’

depending on the sensitivity of the 

information. The Technical Secretariat 

is responsible for storing and limiting 

access to any confidential business 

information contained in a document 

according to its established procedures. 

(2) Disclosure to Congress. Section 

404(b)(2) of the Act provides that the 

U.S. Government must disclose 

confidential business information to any 

committee or subcommittee of Congress 

with appropriate jurisdiction upon the 

written request of the chairman or 

ranking minority member of such 

committee or subcommittee. No such 

committee or subcommittee, and no 

member and no staff member of such 

committee or subcommittee, may 

disclose such information or material 

except as otherwise required or 

authorized by law. 

(3) Disclosure to other Federal 

agencies for law enforcement actions 

and disclosure in enforcement 

proceedings under the Act. Section 

404(b)(3) of the Act provides that the 

U.S. Government must disclose 

confidential business information to 

other Federal agencies for enforcement 

of the Act or any other law, and must 

disclose such information when 

relevant in any proceeding under the 

Act. Disclosure will be made in such 

manner as to preserve confidentiality to 

the extent practicable without impairing 

the proceeding. Section 719.14(b) of the 

CWCR provides that all hearings will be 

closed, unless the Administrative Law 

Judge for good cause shown determines 

otherwise. Section 719.20 of the CWCR 

provides that parties may request that 

the administrative law judge segregate 

and restrict access to confidential 

business information contained in 

material in the record of an enforcement 

proceeding. 

(4) Disclosure to the public; national 

interest determination. Section 404(c) of 

the Act provides that confidential 

business information, as defined by the 

Act, that is in the possession of the U.S. 

Government, is exempt from public 

disclosure in response to a Freedom of 

Information Act request, except when 

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such disclosure is determined to be in 

the national interest. 

(i) National interest determination.

The United States National Authority 

(USNA), in coordination with the CWC 

interagency group, shall determine on a 

case-by-case basis if disclosure of 

confidential business information in 

response to a Freedom of Information 

Act request is in the national interest. 

(ii) Notification of intent to disclose 

pursuant to a national interest 

determination. The Act provides for 

notification to the affected person of 

intent to disclose confidential business 

information based on the national 

interest, unless such notification of 

intent to disclose is contrary to national 

security or law enforcement needs. If, 

after coordination with the agencies that 

constitute the CWC interagency group, 

the USNA does not determine that such 

notification of intent to disclose is 

contrary to national security or law 

enforcement needs, the USNA will 

notify the person that submitted the 

information and the person to whom the 

information pertains of the intent to 

disclose the information.

SUPPLEMENT NO. 1 TO PART 718—

CONFIDENTIAL BUSINESS INFORMATION DECLARED OR REPORTED*

Schedule 1 forms: Fields containing 

confidential business information 

Certification Form ....... NONE 

Form 1–1 .................... NONE 

Form 1–2 .................... All fields 

Form 1–2A .................. All fields 

Form 1–2B .................. All fields 

Form 1–3 .................... All fields 

Form 1–4 .................... All fields 

Schedule 2 Forms: 

Certification Form ....... NONE 

Form 2–1 .................... NONE 

Form 2–2 .................... Question 2–2.8

Form 2–3 .................... All fields 

Form 2–3A .................. All fields 

Form 2–3B .................. All fields 

Form 2–3C ................. All fields 

Form 2–4 .................... All fields 

Schedule 3 Forms: 

Certification Form ....... NONE 

Form 3–1 .................... NONE 

Form 3–2 NONE.

Form 3–3 All fields.

Form 3–4 All fields.

Unscheduled Discrete 

Organic Chemicals 

Forms 

Certification Form ....... NONE 

Form UDOC ............... NONE 

SUPPLEMENT NO. 1 TO PART 718—

CONFIDENTIAL BUSINESS INFORMATION DECLARED OR REPORTED*—

Continued

FORMS A and B and attachments (all Schedules and UDOCs).Case-by-case; 

must be identified by submitter. 

* This table lists those data fields on the 

Declaration and Report Forms that request 

‘‘confidential business information’’ (CBI) as 

defined by the Act (sections 103(g) and 

304(e)(2)). As provided by section 404(a) of 

the Act, CBI is exempt from disclosure in response to a Freedom of Information Act 

(FOIA) request under sections 552(b)(3) and 

552(b)(4) (5 U.S.C.A. 552(b)(3)–(4)), unless a 

determination is made, pursuant to section 

404(c) of the Act, that such disclosure is in the 

national interest. Other FOIA exemptions to 

disclosure may also apply. You must identify 

CBI provided in Form A and/or Form B attachments, and provide the reasons supporting 

your claim of confidentiality, except that 

Schedule 1 facility technical descriptions submitted with initial declarations are always considered to include CBI. If you believe that information you are submitting in a data field 

marked ‘‘none’’ in the Table is CBI, as defined 

by the Act, you must identify the specific information and provide the reasons supporting 

your claim of confidentiality in a cover letter. 

PART 719—ENFORCEMENT

Sec. 

719.1 Scope and definitions. 

719.2 Violations of the Act subject to 

administrative and criminal enforcement 

proceedings. 

719.3 Violations of the IEEPA subject to 

judicial enforcement proceedings. 

719.4 Violations and sanctions under the 

Act not subject to proceedings under the 

CWCR. 

719.5 Initiation of administrative 

proceedings. 

719.6 Request for hearing and answer. 

719.7 Representation. 

719.8 Filing and service of papers other 

than the NOVA. 

719.9 Summary decision. 

719.10 Discovery. 

719.11 Subpoenas. 

719.12 Matters protected against disclosure. 

719.13 Prehearing conference. 

719.14 Hearings. 

719.15 Procedural stipulations. 

719.16 Extension of time. 

719.17 Post-hearing submissions. 

719.18 Decisions. 

719.19 Settlement. 

719.20 Record for decision. 

719.21 Payment of final assessment. 

719.22 Reporting a violation.

Authority: 22 U.S.C. 6701 et seq.; 50 U.S.C. 

1601 et seq.; 50 U.S.C. 1701 et seq.; E.O. 

12938, 59 FR 59099, 3 CFR, 1994 Comp., p. 

950, E.O. 13128, 64 FR 36703, 3 CFR, 1999 

Comp., p. 199.

§ 719.1 Scope and definitions. 

(a) Scope. This part 719 describes the 

various sanctions that apply to 

violations of the Act and the CWCR. It 

also establishes detailed administrative 

procedures for certain violations of the 

Act. The three categories of violations 

are as follows: 

(1) Violations of the Act subject to 

administrative and criminal 

enforcement proceedings. This CWCR 

sets forth in § 719.2 violations for which 

the statutory basis is the Act. BIS 

investigates these violations and, for 

administrative proceedings, prepares 

charges, provides legal representation to 

the U.S. Government, negotiates 

settlements, and makes 

recommendations to officials of the 

Department of State with respect to the 

initiation and resolution of proceedings. 

The administrative procedures 

applicable to these violations are found 

in §§ 719.5 through 719.22 of this part. 

The Department of State gives notice of 

initiation of administrative proceedings 

and issues orders imposing penalties 

pursuant to 22 CFR part 103, subpart C. 

(2) Violations of the International 

Emergency Economic Powers Act 

(IEEPA) subject to judicial enforcement 

proceedings. Section 719.3 sets forth 

violations of the Chemical Weapons 

Convention for which the statutory basis 

is the IEEPA. BIS refers these violations 

to the Department of Justice for civil or 

criminal judicial enforcement. 

(3) Violations and sanctions under the 

Act not subject to proceedings under the 

CWCR. Section 719.4 sets forth 

violations and sanctions under the Act 

that are not violations of the CWCR and 

that are not subject to proceedings 

under the CWCR. This section is 

included solely for informational 

purposes. BIS may assist in 

investigations of these violations, but 

has no authority to initiate any 

enforcement action under the CWCR.

Note to paragraph (a): This part 719 does 

not apply to violations of the export 

requirements imposed pursuant to the 

Chemical Weapons Convention and set forth 

in the Export Administration Regulations 

(EAR) (15 CFR parts 730 through 799) and in 

the International Traffic in Arms Regulations 

(ITAR) (22 CFR parts 120 through 130).

(b) Definitions. The following are 

definitions of terms as used only in 

parts 719 and 720. For definitions of 

terms applicable to parts 710 through 

722 of this subchapter, see part 710 of 

this subchapter. 

The Act. The Chemical Weapons 

Convention Implementation Act of 1998 

(22 U.S.C. 6701–6777). 

Assistant Secretary for Export 

Enforcement. The Assistant Secretary 

for Export Enforcement, Bureau of 

Industry and Security, United States 

Department of Commerce. 

Final decision. A decision or order 

assessing a civil penalty, or otherwise 

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1The maximum civil penalty allowed under the 

International Emergency Economic Powers Act is 

$11,000 for any violation committed on or after 

October 23, 1996 (15 CFR 6.4(a)(3)).

2Alternatively, sanctions may be imposed under 

18 U.S.C. 3571, a criminal code provision that 

establishes a maximum criminal fine for a felony 

that is the greatest of: (1) The amount provided by 

the statute that was violated; (2) an amount not 

more than $250,000 for an individual, or not more 

than $500,000 for an organization; or (3) an amount 

based on gain or loss from the offense.

disposing of or dismissing a case, which 

is not subject to further administrative 

review, but which may be subject to 

collection proceedings or judicial 

review in an appropriate Federal court 

as authorized by law. 

IEEPA. The International Emergency 

Economic Powers Act, as amended (50 

U.S.C. 1701–1706). 

Office of Chief Counsel. The Office of 

Chief Counsel for Industry and Security, 

United States Department of Commerce. 

Report. For purposes of parts 719 and 

720 of the CWCR, the term ‘‘report’’

means any declaration, report, or 

advance notification required under 

parts 712 through 715 of the CWCR. 

Respondent. Any person named as the 

subject of a letter of intent to charge, or 

a Notice of Violation and Assessment 

(NOVA) and proposed order. 

Under Secretary, Bureau of Industry 

and Security. The Under Secretary, 

Bureau of Industry and Security, United 

States Department of Commerce.

§ 719.2 Violations of the Act subject to 

administrative and criminal enforcement 

proceedings. 

(a) Violations. (1) Refusal to permit 

entry or inspection. No person may 

willfully fail or refuse to permit entry or 

inspection, or disrupt, delay or 

otherwise impede an inspection, 

authorized by the Act. 

(2) Failure to establish or maintain 

records. No person may willfully fail or 

refuse: 

(i) To establish or maintain any record 

required by the Act or this subchapter; 

or 

(ii) To submit any report, notice, or 

other information to the United States 

Government in accordance with the Act 

or the CWCR; or 

(iii) To permit access to or copying of 

any record that is exempt from 

disclosure under the Act or the CWCR. 

(b) Civil penalties. (1) Civil penalty for 

refusal to permit entry or inspection.

Any person that is determined to have 

willfully failed or refused to permit 

entry or inspection, or to have 

disrupted, delayed or otherwise 

impeded an authorized inspection, as 

set forth in paragraph (a)(1) of this 

section, shall pay a civil penalty in an 

amount not to exceed $25,000 for each 

violation. Each day the violation 

continues constitutes a separate 

violation. 

(2) Civil penalty for failure to 

establish or maintain records. Any 

person that is determined to have 

willfully failed or refused to establish or 

maintain any record or submit any 

report, notice, or other information 

required by the Act or the CWCR, or to 

permit access to or copying of any 

record exempt from disclosure under 

the Act or this subchapter as set forth in 

paragraph (a)(2) of this section, shall 

pay a civil penalty in an amount not to 

exceed $5,000 for each violation. 

(c) Criminal penalty. Any person that 

knowingly violates the Act by willfully 

failing or refusing to permit entry or 

inspection authorized by the Act; or by 

willfully disrupting, delaying or 

otherwise impeding an inspection 

authorized by the Act; or by willfully 

failing or refusing to establish or 

maintain any required record, or to 

submit any required report, notice, or 

other information; or by willfully failing 

or refusing to permit access to or 

copying of any record exempt from 

disclosure under the Act or the CWCR, 

shall, in addition to or in lieu of any 

civil penalty that may be imposed, be 

fined under Title 18 of the United States 

Code, be imprisoned for not more than 

one year, or both. 

(d) Denial of export privileges. Any 

person in the United States or any U.S. 

national may be subject to a denial of 

export privileges after notice and 

opportunity for hearing pursuant to part 

720 of the CWCR if that person has been 

convicted under Title 18, section 229 of 

the United States Code.

§ 719.3 Violations of the IEEPA subject to 

judicial enforcement proceedings. 

(a) Violations. (1) Import restrictions 

involving Schedule 1 chemicals. Except 

as otherwise provided in § 712.2 of the 

CWCR, no person may import any 

Schedule 1 chemical (See Supplement 

No. 1 to part 712 of the CWCR) unless:

(i) The import is from a State Party; 

(ii) The import is for research, 

medical, pharmaceutical, or protective 

purposes; 

(iii) The import is in types and 

quantities strictly limited to those that 

can be justified for such purposes; and 

(iv) The importing person has notified 

BIS not less than 45 calendar days 

before the import pursuant to § 712.6 of 

the CWCR. 

(2) Import restrictions involving 

Schedule 2 chemicals. Except as 

otherwise provided in § 713.1 of the 

CWCR, no person may, on or after April 

29, 2000, import any Schedule 2 

chemical (see Supplement No. 1 to part 

713 of the CWCR) from any destination 

other than a State Party. 

(b) Civil penalty. A civil penalty not 

to exceed $11,000 may be imposed in 

accordance with this part on any person 

for each violation of this section.1

(c) Criminal penalty. Whoever 

willfully violates paragraph (a)(1) or (2) 

of this section shall, upon conviction, be 

fined not more than $50,000, or, if a 

natural person, imprisoned for not more 

than ten years, or both; and any officer, 

director, or agent of any corporation 

who knowingly participates in such 

violation may be punished by like fine, 

imprisonment, or both.2

§ 719.4 Violations and sanctions under the 

Act not subject to proceedings under the 

CWCR. 

(a) Criminal penalties for 

development or use of a chemical 

weapon. Any person who violates 18 

U.S.C. 229 shall be fined, or imprisoned 

for any term of years, or both. Any 

person who violates 18 U.S.C. 299 and 

by whose action the death of another 

person is the result shall be punished by 

death or imprisoned for life. 

(b) Civil penalty for development or 

use of a chemical weapon. The Attorney 

General may bring a civil action in the 

appropriate United States district court 

against any person who violates 18 

U.S.C. 229 and, upon proof of such 

violation by a preponderance of the 

evidence, such person shall be subject 

to pay a civil penalty in an amount not 

to exceed $100,000 for each such 

violation. 

(c) Criminal forfeiture. (1) Any person 

convicted under section 229A(a) of Title 

18 of the United States Code shall forfeit 

to the United States irrespective of any 

provision of State law: 

(i) Any property, real or personal, 

owned, possessed, or used by a person 

involved in the offense; 

(ii) Any property constituting, or 

derived from, and proceeds the person 

obtained, directly or indirectly, as the 

result of such violation; and 

(iii) Any of the property used in any 

manner or part, to commit, or to 

facilitate the commission of, such 

violation. 

(2) In lieu of a fine otherwise 

authorized by section 229A(a) of Title 

18 of the United States Code, a 

defendant who derived profits or other 

proceeds from an offense may be fined 

not more than twice the gross profits or 

other proceeds. 

(d) Injunction. (1) The United States 

may, in a civil action, obtain an 

injunction against: 

70804 Federal Register / Vol. 69, No. 234 / Tuesday, December 7, 2004 / Proposed Rules 

(i) The conduct prohibited under 

section 229 or 229C of Title 18 of the 

United States Code; or 

(ii) The preparation or solicitation to 

engage in conduct prohibited under 

section 229 or 229D of Title 18 of the 

United States Code. 

(2) In addition, the United States may, 

in a civil action, restrain any violation 

of section 306 or 405 of the Act, or 

compel the taking of any action required 

by or under the Act or the Convention.

§ 719.5 Initiation of administrative 

proceedings. 

(a) Request for Notice of Violation and 

Assessment (NOVA). The Director of the 

Office of Export Enforcement, Bureau of 

Industry and Security, may request that 

the Secretary of State initiate an 

administrative enforcement proceeding 

under this § 719.5 and 22 CFR 103.7. If 

the request is in accordance with 

applicable law, the Secretary of State 

will initiate an administrative 

enforcement proceeding by issuing a 

NOVA. The Office of Chief Counsel 

shall serve the NOVA as directed by the 

Secretary of State. 

(b) Letter of intent to charge. The 

Director of the Office of Export 

Enforcement, Bureau of Industry and 

Security, may notify a respondent by 

letter of the intent to charge. This letter 

of intent to charge will advise a 

respondent that BIS has conducted an 

investigation and intends to recommend 

that the Secretary of State issue a 

NOVA. The letter of intent to charge 

will be accompanied by a draft NOVA 

and proposed order, and will give the 

respondent a specified period of time to 

contact BIS to discuss settlement of the 

allegations set forth in the draft NOVA. 

An administrative enforcement 

proceeding is not initiated by a letter of 

intent to charge. If the respondent does 

not contact BIS within the specified 

time, or if the respondent requests it, 

BIS will make its request for initiation 

of an administrative enforcement 

proceeding to the Secretary of State in 

accordance with paragraph (a) of this 

section. 

(c) Content of NOVA. The NOVA 

shall constitute a formal complaint, and 

will set forth the basis for the issuance 

of the proposed order. It will set forth 

the alleged violation(s) and the essential 

facts with respect to the alleged 

violation(s), reference the relevant 

statutory, regulatory or other provisions, 

and state the amount of the civil penalty 

to be assessed. The NOVA will inform 

the respondent of the right to request a 

hearing pursuant to § 719.6, inform the 

respondent that failure to request such 

a hearing shall result in the proposed 

order becoming final and unappealable 

on signature of the Secretary of State, 

and provide payment instructions. A 

copy of the regulations that govern the 

administrative proceedings will 

accompany the NOVA. 

(d) Proposed order. A proposed order 

shall accompany every NOVA, letter of 

intent to charge, and draft NOVA. It will 

briefly set forth the substance of the 

alleged violation(s) and the statutory, 

regulatory or other provisions violated. 

It will state the amount of the civil 

penalty to be assessed. 

(e) Notice. Notice of the intent to 

charge or of the initiation of formal 

proceedings shall be given to the 

respondent (or respondent’s agent for 

service of process, or attorney) by 

sending relevant documents, via first 

class mail, facsimile, or by personal 

delivery.

§ 719.6 Request for hearing and answer. 

(a) Time to answer. If the respondent 

wishes to contest the NOVA and 

proposed order issued by the Secretary 

of State, the respondent must request a 

hearing in writing within 15 business 

days from the postmarked date of the 

NOVA. If the respondent requests a 

hearing, the respondent must answer 

the NOVA within 30 days from the date 

of the request for hearing. The request 

for hearing and answer must be filed 

with the Administrative Law Judge 

(ALJ), along with a copy of the NOVA 

and proposed order, and served on the 

Office of Chief Counsel, and any other 

address(es) specified in the NOVA, in 

accordance with § 719.8. 

(b) Content of answer. The 

respondent’s answer must be responsive 

to the NOVA and proposed order, and 

must fully set forth the nature of the 

respondent’s defense(s). The answer 

must specifically admit or deny each 

separate allegation in the NOVA; if the 

respondent is without knowledge, the 

answer will so state and will operate as 

a denial. Failure to deny or controvert 

a particular allegation will be deemed 

an admission of that allegation. The 

answer must also set forth any 

additional or new matter the respondent 

contends supports a defense or claim of 

mitigation. Any defense or partial 

defense not specifically set forth in the 

answer shall be deemed waived, and 

evidence thereon may be refused, except 

for good cause shown. 

(c) English required. The request for 

hearing, answer, and all other papers 

and documentary evidence must be 

submitted in English. 

(d) Waiver. The failure of the 

respondent to file a request for a hearing 

and an answer within the times 

provided constitutes a waiver of the 

respondent’s right to appear and contest 

the allegations set forth in the NOVA 

and proposed order. If no hearing is 

requested and no answer is provided, 

the proposed order will be signed and 

become final and unappealable.

§ 719.7 Representation. 

A respondent individual may appear 

and participate in person, a corporation 

by a duly authorized officer or 

employee, and a partnership by a 

partner. If a respondent is represented 

by counsel, counsel shall be a member 

in good standing of the bar of any State, 

Commonwealth or Territory of the 

United States, or of the District of 

Columbia, or be licensed to practice law 

in the country in which counsel resides, 

if not the United States. The U.S. 

Government will be represented by the 

Office of Chief Counsel. A respondent 

personally, or through counsel or other 

representative who has the power of 

attorney to represent the respondent, 

shall file a notice of appearance with the 

ALJ, or, in cases where settlement 

negotiations occur before any filing with 

the ALJ, with the Office of Chief 

Counsel.

§ 719.8 Filing and service of papers other 

than the NOVA. 

(a) Filing. All papers to be filed with 

the ALJ shall be addressed to ‘‘CWC 

Administrative Enforcement 

Proceedings’’ at the address set forth in 

the NOVA, or such other place as the 

ALJ may designate. Filing by United 

States mail (first class postage prepaid), 

by express or equivalent parcel delivery 

service, via facsimile, or by hand 

delivery, is acceptable. Filing from a 

foreign country shall be by airmail or 

via facsimile. A copy of each paper filed 

shall be simultaneously served on all 

parties. 

(b) Service. Service shall be made by 

United States mail (first class postage 

prepaid), by express or equivalent 

parcel delivery service, via facsimile, or 

by hand delivery of one copy of each 

paper to each party in the proceeding. 

The Department of State is a party to 

cases under the CWCR, but will be 

represented by the Office of Chief 

Counsel. Therefore, service on the 

government party in all proceedings 

shall be addressed to Office of Chief 

Counsel for Industry and Security, U.S. 

Department of Commerce, 14th Street 

and Constitution Avenue, NW., Room 

H–3839, Washington, DC 20230, or sent 

via facsimile to (202) 482–0085. Service 

on a respondent shall be to the address 

to which the NOVA and proposed order 

was sent, or to such other address as the 

respondent may provide. When a party 

has appeared by counsel or other 

representative, service on counsel or 

Federal Register / Vol. 69, No. 234 / Tuesday, December 7, 2004 / Proposed Rules 70805

other representative shall constitute 

service on that party. 

(c) Date. The date of filing or service 

is the day when the papers are 

deposited in the mail or are delivered in 

person, by delivery service, or by 

facsimile. Refusal by the person to be 

served, or by the person’s agent or 

attorney, of service of a document or 

other paper will be considered effective 

service of the document or other paper 

as of the date of such refusal. 

(d) Certificate of service. A certificate 

of service signed by the party making 

service, stating the date and manner of 

service, shall accompany every paper, 

other than the NOVA and proposed 

order, filed and served on the parties. 

(e) Computation of time. In computing 

any period of time prescribed or 

allowed by this part, the day of the act, 

event, or default from which the 

designated period of time begins to run 

is not to be included. The last day of the 

period so computed is to be included 

unless it is a Saturday, a Sunday, or a 

legal holiday (as defined in Rule 6(a) of 

the Federal Rules of Civil Procedure), in 

which case the period runs until the end 

of the next day which is neither a 

Saturday, a Sunday, nor a legal holiday. 

Intermediate Saturdays, Sundays, and 

legal holidays are excluded from the 

computation when the period of time 

prescribed or allowed is 7 days or less.

§ 719.9 Summary decision. 

The ALJ may render a summary 

decision disposing of all or part of a 

proceeding on the motion of any party 

to the proceeding, provided that there is 

no genuine issue as to any material fact 

and the party is entitled to summary 

decision as a matter of law.

§ 719.10 Discovery. 

(a) General. The parties are 

encouraged to engage in voluntary 

discovery regarding any matter, not 

privileged, which is relevant to the 

subject matter of the pending 

proceeding. The provisions of the 

Federal Rules of Civil Procedure relating 

to discovery apply to the extent 

consistent with this part and except as 

otherwise provided by the ALJ or by 

waiver or agreement of the parties. The 

ALJ may make any order which justice 

requires to protect a party or person 

from annoyance, embarrassment, 

oppression, or undue burden or 

expense. These orders may include 

limitations on the scope, method, time 

and place of discovery, and provisions 

for protecting the confidentiality of 

classified or otherwise sensitive 

information, including Confidential 

Business Information (CBI) as defined 

by the Act. 

(b) Interrogatories and requests for 

admission or production of documents.

A party may serve on any party 

interrogatories, requests for admission, 

or requests for production of documents 

for inspection and copying, and a party 

concerned may apply to the ALJ for 

such enforcement or protective order as 

that party deems warranted with respect 

to such discovery. The service of a 

discovery request shall be made at least 

20 days before the scheduled date of the 

hearing unless the ALJ specifies a 

shorter time period. Copies of 

interrogatories, requests for admission 

and requests for production of 

documents and responses thereto shall 

be served on all parties and a copy of 

the certificate of service shall be filed 

with the ALJ. Matters of fact or law of 

which admission is requested shall be 

deemed admitted unless, within a 

period designated in the request (at least 

10 days after service, or within such 

additional time as the ALJ may allow), 

the party to whom the request is 

directed serves upon the requesting 

party a sworn statement either denying 

specifically the matters of which 

admission is requested or setting forth 

in detail the reasons why the party to 

whom the request is directed cannot 

truthfully either admit or deny such 

matters. 

(c) Depositions. Upon application of a 

party and for good cause shown, the ALJ 

may order the taking of the testimony of 

any person by deposition and the 

production of specified documents or 

materials by the person at the 

deposition. The application shall state 

the purpose of the deposition and set 

forth the facts sought to be established 

through the deposition. 

(d) Enforcement. The ALJ may order 

a party to answer designated questions, 

to produce specified documents or 

things or to take any other action in 

response to a proper discovery request. 

If a party does not comply with such an 

order, the ALJ may make a 

determination or enter any order in the 

proceeding as the ALJ deems reasonable 

and appropriate. The ALJ may strike 

related charges or defenses in whole or 

in part or may take particular facts 

relating to the discovery request to 

which the party failed or refused to 

respond as being established for 

purposes of the proceeding in 

accordance with the contentions of the 

party seeking discovery. In addition, 

enforcement by any district court of the 

United States in which venue is proper 

may be sought as appropriate.

§ 719.11 Subpoenas. 

(a) Issuance. Upon the application of 

any party, supported by a satisfactory 

showing that there is substantial reason 

to believe that the evidence would not 

otherwise be available, the ALJ may 

issue subpoenas to any person requiring 

the attendance and testimony of 

witnesses and the production of such 

books, records or other documentary or 

physical evidence for the purpose of the 

hearing, as the ALJ deems relevant and 

material to the proceedings, and 

reasonable in scope. Witnesses shall be 

paid the same fees and mileage that are 

paid to witnesses in the courts of the 

United States. In case of contempt, 

challenge or refusal to obey a subpoena 

served upon any person pursuant to this 

paragraph, any district court of the 

United States, in which venue is proper, 

has jurisdiction to issue an order 

requiring any such person to comply 

with such subpoena. Any failure to obey 

such order of the court is punishable by 

the court as a contempt thereof. 

(b) Service. Subpoenas issued by the 

ALJ may be served by any of the 

methods set forth in § 719.8(b). 

(c) Timing. Applications for 

subpoenas must be submitted at least 10 

days before the scheduled hearing or 

deposition, unless the ALJ determines, 

for good cause shown, that 

extraordinary circumstances warrant a 

shorter time.

§ 719.12 Matters protected against 

disclosure. 

(a) Protective measures. The ALJ may 

limit discovery or introduction of 

evidence or issue such protective or 

other orders as in the ALJ’s judgment 

may be needed to prevent undue 

disclosure of classified or sensitive 

documents or information, including 

Confidential Business Information as 

defined by the Act. Where the ALJ 

determines that documents containing 

classified or sensitive matter must be 

made available to a party in order to 

avoid prejudice, the ALJ may direct the 

other party to prepare an unclassified 

and nonsensitive summary or extract of 

the documents. The ALJ may compare 

the extract or summary with the original 

to ensure that it is supported by the 

source document and that it omits only 

so much as must remain undisclosed. 

The summary or extract may be 

admitted as evidence in the record. 

(b) Arrangements for access. If the ALJ 

determines that the summary procedure 

outlined in paragraph (a) of this section 

is unsatisfactory, and that classified or 

otherwise sensitive matter must form 

part of the record in order to avoid 

prejudice to a party, the ALJ may 

provide the parties opportunity to make 

arrangements that permit a party or a 

representative to have access to such 

matter without compromising sensitive 

70806 Federal Register / Vol. 69, No. 234 / Tuesday, December 7, 2004 / Proposed Rules 

information. Such arrangements may 

include obtaining security clearances or 

giving counsel for a party access to 

sensitive information and documents 

subject to assurances against further 

disclosure, including a protective order, 

if necessary.

§ 719.13 Prehearing conference. 

(a) On the ALJ’s own motion, or on 

request of a party, the ALJ may direct 

the parties to participate in a prehearing 

conference, either in person or by 

telephone, to consider:

(1) Simplification of issues; 

(2) The necessity or desirability of 

amendments to pleadings; 

(3) Obtaining stipulations of fact and 

of documents to avoid unnecessary 

proof; or 

(4) Such other matters as may 

expedite the disposition of the 

proceedings. 

(b) The ALJ may order the conference 

proceedings to be recorded 

electronically or taken by a reporter, 

transcribed and filed with the ALJ. 

(c) If a prehearing conference is 

impracticable, the ALJ may direct the 

parties to correspond with the ALJ to 

achieve the purposes of such a 

conference. 

(d) The ALJ will prepare a summary 

of any actions agreed on or taken 

pursuant to this section. The summary 

will include any written stipulations or 

agreements made by the parties.

§ 719.14 Hearings. 

(a) Scheduling. Upon receipt of a 

written and dated request for a hearing, 

the ALJ shall, by agreement with all the 

parties or upon notice to all parties of 

at least 30 days, schedule a hearing. All 

hearings will be held in Washington, 

D.C., unless the ALJ determines, for 

good cause shown, that another location 

would better serve the interest of justice. 

(b) Hearing procedure. Hearings will 

be conducted in a fair and impartial 

manner by the ALJ. All hearings will be 

closed, unless the ALJ for good cause 

shown determines otherwise. The rules 

of evidence prevailing in courts of law 

do not apply, and all evidentiary 

material deemed by the ALJ to be 

relevant and material to the proceeding 

and not unduly repetitious will be 

received and given appropriate weight, 

except that any evidence of settlement 

which would be excluded under Rule 

408 of the Federal Rules of Evidence is 

not admissible. Witnesses will testify 

under oath or affirmation, and shall be 

subject to cross-examination. 

(c) Testimony and record. (1) A 

verbatim record of the hearing and of 

any other oral proceedings will be taken 

by reporter or by electronic recording, 

and filed with the ALJ. If any party 

wishes to obtain a written copy of the 

transcript, that party shall pay the costs 

of transcription. The parties may share 

the costs if both wish a transcript. 

(2) Upon such terms as the ALJ deems 

just, the ALJ may direct that the 

testimony of any person be taken by 

deposition and may admit an affidavit 

or declaration as evidence, provided 

that any affidavits or declarations have 

been filed and served on the parties 

sufficiently in advance of the hearing to 

permit a party to file and serve an 

objection thereto on the grounds that it 

is necessary that the affiant or declarant 

testify at the hearing and be subject to 

cross-examination. 

(d) Failure to appear. If a party fails 

to appear in person or by counsel at a 

scheduled hearing, the hearing may 

nevertheless proceed. The party’s failure 

to appear will not affect the validity of 

the hearing or any proceeding or action 

taken thereafter.

§ 719.15 Procedural stipulations. 

Unless otherwise ordered and subject 

to § 719.16, a written stipulation agreed 

to by all parties and filed with the ALJ 

will modify the procedures established 

by this part.

§ 719.16 Extension of time. 

The parties may extend any 

applicable time limitation by stipulation 

filed with the ALJ before the time 

limitation expires, or the ALJ may, on 

the ALJ’s own initiative or upon 

application by any party, either before 

or after the expiration of any applicable 

time limitation, extend the time, except 

that the requirement that a hearing be 

demanded within 15 days, and the 

requirement that a final agency decision 

be made within 30 days, may not be 

modified.

§ 719.17 Post-hearing submissions. 

All parties shall have the opportunity 

to file post-hearing submissions that 

may include findings of fact and 

conclusions of law, supporting evidence 

and legal arguments, exceptions to the 

ALJ’s rulings or to the admissibility of 

evidence, and proposed orders and 

settlements.

§ 719.18 Decisions. 

(a) Initial decision. After considering 

the entire record in the case, the ALJ 

will issue an initial decision based on 

a preponderance of the evidence. The 

decision will include findings of fact, 

conclusions of law, and a decision 

based thereon as to whether the 

respondent has violated the Act. If the 

ALJ finds that the evidence of record is 

insufficient to sustain a finding that a 

violation has occurred with respect to 

one or more allegations, the ALJ shall 

order dismissal of the allegation(s) in 

whole or in part, as appropriate. If the 

ALJ finds that one or more violations 

have been committed, the ALJ shall 

issue an order imposing administrative 

sanctions. 

(b) Factors considered in assessing 

penalties. In determining the amount of 

a civil penalty, the ALJ shall take into 

account the nature, circumstances, 

extent and gravity of the violation(s), 

and, with respect to the respondent, the 

respondent’s ability to pay the penalty, 

the effect of a civil penalty on the 

respondent’s ability to continue to do 

business, the respondent’s history of 

prior violations, the respondent’s degree 

of culpability, the existence of an 

internal compliance program, and such 

other matters as justice may require. 

(c) Certification of initial decision.

The ALJ shall immediately certify the 

initial decision and order to the 

Executive Director of the Office of Legal 

Adviser, U.S. Department of State, 2201 

C Street, NW., Room 5519, Washington, 

DC 20520, to the Office of Chief Counsel 

at the address in § 719.8, and to the 

respondent, by personal delivery or 

overnight mail.

(d) Review of initial decision. The 

initial decision shall become the final 

agency decision and order unless, 

within 30 days, the Secretary of State 

modifies or vacates it, with or without 

conditions, in accordance with 22 CFR 

103.8.

§ 719.19 Settlement. 

(a) Settlements before issuance of a 

NOVA. When the parties have agreed to 

a settlement of the case, the Director of 

the Office of Export Enforcement will 

recommend the settlement to the 

Secretary of State, forwarding a 

proposed settlement agreement and 

order, which, in accordance with 22 

CFR 103.9(a), the Secretary of State will 

approve and sign if the recommended 

settlement is in accordance with 

applicable law. 

(b) Settlements following issuance of 

a NOVA. The parties may enter into 

settlement negotiations at any time 

during the time a case is pending before 

the ALJ. If necessary, the parties may 

extend applicable time limitations or 

otherwise request that the ALJ stay the 

proceedings while settlement 

negotiations continue. When the parties 

have agreed to a settlement of the case, 

the Office of Chief Counsel will 

recommend the settlement to the 

Secretary of State, forwarding a 

proposed settlement agreement and 

order, which, in accordance with 22 

CFR 103.9(b), the Secretary will approve 

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and sign if the recommended settlement 

is in accordance with applicable law. 

(c) Settlement scope. Any respondent 

who agrees to an order imposing any 

administrative sanction does so solely 

for the purpose of resolving the claims 

in the administrative enforcement 

proceeding brought under this part. This 

reflects the fact that the government 

officials involved have neither the 

authority nor the responsibility for 

initiating, conducting, settling, or 

otherwise disposing of criminal 

proceedings. That authority and 

responsibility are vested in the Attorney 

General and the Department of Justice. 

(d) Finality. Cases that are settled may 

not be reopened or appealed.

§ 719.20 Record for decision. 

(a) The record. The transcript of 

hearings, exhibits, rulings, orders, all 

papers and requests filed in the 

proceedings, and, for purposes of any 

appeal under § 719.18 or under 22 CFR 

103.8, the decision of the ALJ and such 

submissions as are provided for under 

§ 719.18 or 22 CFR 103.8 will constitute 

the record and the exclusive basis for 

decision. When a case is settled, the 

record will consist of any and all of the 

foregoing, as well as the NOVA or draft 

NOVA, settlement agreement, and order. 

(b) Restricted access. On the ALJ’s 

own motion, or on the motion of any 

party, the ALJ may direct that there be 

a restricted access portion of the record 

for any material in the record to which 

public access is restricted by law or by 

the terms of a protective order entered 

in the proceedings. A party seeking to 

restrict access to any portion of the 

record is responsible, prior to the close 

of the proceeding, for submitting a 

version of the document(s) proposed for 

public availability that reflects the 

requested deletion. The restricted access 

portion of the record will be placed in 

a separate file and the file will be clearly 

marked to avoid improper disclosure 

and to identify it as a portion of the 

official record in the proceedings. The 

ALJ may act at any time to permit 

material that becomes declassified or 

unrestricted through passage of time to 

be transferred to the unrestricted access 

portion of the record. 

(c) Availability of documents. (1) 

Scope. All NOVAs and draft NOVAs, 

answers, settlement agreements, 

decisions and orders disposing of a case 

will be displayed on the BIS Freedom of 

Information Act (FOIA) Web site, at 

http://www.bis.doc.gov/foia, which is 

maintained by the Office of 

Administration, Bureau of Industry and 

Security, U.S. Department of Commerce. 

This office does not maintain a separate 

inspection facility. The complete record 

for decision, as defined in paragraphs 

(a) and (b) of this section will be made 

available on request. 

(2) Timing. The record for decision 

will be available only after the final 

administrative disposition of a case. 

Parties may seek to restrict access to any 

portion of the record under paragraph 

(b) of this section.

§ 719.21 Payment of final assessment. 

(a) Time for payment. Full payment of 

the civil penalty must be made within 

30 days of the effective date of the order 

or within such longer period of time as 

may be specified in the order. Payment 

shall be made in the manner specified 

in the NOVA. 

(b) Enforcement of order. The 

government party may, through the 

Attorney General, file suit in an 

appropriate district court if necessary to 

enforce compliance with a final order 

issued under the CWCR. This suit will 

include a claim for interest at current 

prevailing rates from the date payment 

was due or ordered. 

(c) Offsets. The amount of any civil 

penalty imposed by a final order may be 

deducted from any sum(s) owed by the 

United States to a respondent.

§ 719.22 Reporting a violation. 

If a person learns that a violation of 

the Convention, the Act, or the CWCR 

has occurred or may occur, that person 

may notify: Office of Export 

Enforcement, Bureau of Industry and 

Security, U.S. Department of Commerce, 

14th Street and Constitution Avenue, 

NW., Room H–4520, Washington, DC 

20230; Tel: (202) 482–1208; Facsimile: 

(202) 482–0964.

PART 720—DENIAL OF EXPORT 

PRIVILEGES

Sec. 

720.1 Denial of export privileges for 

convictions under 18 U.S.C. 229. 

720.2 Initiation of administrative action 

denying export privileges. 

720.3 Final decision on administrative 

action denying export privileges. 

720.4 Effect of denial.

Authority: 22 U.S.C. 6701 et seq.; E.O. 

13128, 64 FR 36703, 3 CFR, 1999 Comp., p. 

199.

§ 720.1 Denial of export privileges for 

convictions under 18 U.S.C. 229. 

Any person in the United States or 

any U.S. national may be denied export 

privileges after notice and opportunity 

for hearing if that person has been 

convicted under Title 18, Section 229 of 

the United States Code of knowingly: 

(a) Developing, producing, otherwise 

acquiring, transferring directly or 

indirectly, receiving, stockpiling, 

retaining, owning, possessing, or using, 

or threatening to use, a chemical 

weapon; or 

(b) Assisting or inducing, in any way, 

any person to violate paragraph (a) of 

this section, or attempting or conspiring 

to violate paragraph (a) of this section.

§ 720.2 Initiation of administrative action 

denying export privileges. 

(a) Notice. BIS will notify any person 

convicted of Section 229, Title 18, 

United States Code, of BIS’s intent to 

deny that person’s export privileges. 

The notification letter shall reference 

the person’s conviction, specify the 

number of years for which BIS intends 

to deny export privileges, set forth the 

statutory and regulatory authority for 

the action, state whether the denial 

order will be standard or non-standard 

pursuant to Supplement No. 1 to part 

764 of the Export Administration 

Regulations (15 CFR parts 730 through 

799), and provide that the person may 

request a hearing before the 

Administrative Law Judge within 30 

days from the date of the notification 

letter. 

(b) Waiver. The failure of the notified 

person to file a request for a hearing 

within the time provided constitutes a 

waiver of the person’s right to contest 

the denial of export privileges that BIS 

intends to impose. 

(c) Order of Assistant Secretary. If no 

hearing is requested, the Assistant 

Secretary for Export Enforcement will 

order that export privileges be denied as 

indicated in the notification letter.

§ 720.3 Final decision on administrative 

action denying export privileges. 

(a) Hearing. Any hearing that is 

granted by the ALJ shall be conducted 

in accordance with the procedures set 

forth in § 719.14 of the CWCR. 

(b) Initial decision and order. After 

considering the entire record in the 

proceeding, the ALJ will issue an initial 

decision and order, based on a 

preponderance of the evidence. The ALJ 

may consider factors such as the 

seriousness of the criminal offense that 

is the basis for conviction, the nature 

and duration of the criminal sanctions 

imposed, and whether the person has 

undertaken any corrective measures. 

The ALJ may dismiss the proceeding if 

the evidence is insufficient to sustain a 

denial of export privileges, or may issue 

an order imposing a denial of export 

privileges for the length of time the ALJ 

deems appropriate. An order denying 

export privileges may be standard or 

non-standard, as provided in 

Supplement No. 1 to part 764 of the 

Export Administration Regulations (15 

CFR parts 730 through 799). The initial 

decision and order will be served on 

70808 Federal Register / Vol. 69, No. 234 / Tuesday, December 7, 2004 / Proposed Rules 

each party, and will be published in the 

Federal Register as the final decision of 

BIS 30 days after service, unless an 

appeal is filed in accordance with 

paragraph (c) of this section. 

(c) Grounds for appeal. (1) A party 

may, within 30 days of the ALJ’s initial 

decision and order, petition the Under 

Secretary, Bureau of Industry and 

Security, for review of the initial 

decision and order. A petition for 

review must be filed with the Office of 

Under Secretary, Bureau of Industry and 

Security, Department of Commerce, 

14th Street and Constitution Avenue, 

NW., Washington, DC 20230, and shall 

be served on the Office of Chief Counsel 

for Industry and Security or on the 

respondent. Petitions for review may be 

filed only on one or more of the 

following grounds: 

(i) That a necessary finding of fact is 

omitted, erroneous or unsupported by 

substantial evidence of record; 

(ii) That a necessary legal conclusion 

or finding is contrary to law; 

(iii) That prejudicial procedural error 

occurred; or 

(iv) That the decision or the extent of 

sanctions is arbitrary, capricious or an 

abuse of discretion. 

(2) The appeal must specify the 

grounds on which the appeal is based 

and the provisions of the order from 

which the appeal was taken. 

(d) Appeal procedure. The Under 

Secretary, Bureau of Industry and 

Security, normally will not hold 

hearings or entertain oral arguments on 

appeals. A full written statement in 

support of the appeal must be filed with 

the appeal and be simultaneously 

served on all parties, who shall have 30 

days from service to file a reply. At his/

her discretion, the Under Secretary may 

accept new submissions, but will not 

ordinarily accept those submissions 

filed more than 30 days after the filing 

of the reply to the appellant’s first 

submission.

(e) Decisions. The Under Secretary’s 

decision will be in writing and will be 

accompanied by an order signed by the 

Under Secretary, Bureau of Industry and 

Security, giving effect to the decision. 

The order may either dispose of the case 

by affirming, modifying or reversing the 

order of the ALJ, or may refer the case 

back to the ALJ for further proceedings. 

Any order that imposes a denial of 

export privileges will be published in 

the Federal Register.

§ 720.4 Effect of denial. 

Any person denied export privileges 

pursuant to this part shall be considered 

a ‘‘person denied export privileges’’ for 

purposes of the Export Administration 

Regulations (15 CFR parts 730 through 

799). The name and address of the 

denied person will be published on the 

Denied Persons List found in 

Supplement 2 to part 764 of the Export 

Administration Regulations (15 CFR 

parts 730 through 799).

PART 721—INSPECTION OF 

RECORDS AND RECORDKEEPING

Sec. 

721.1 Inspection of records. 

721.2 Recordkeeping. 

721.3 Destruction or disposal of records.

Authority: 22 U.S.C. 6701 et seq.; E.O. 

13128, 64 FR 36703, 3 CFR, 1999 Comp., p. 

199.

§ 721.1 Inspection of records. 

Upon request by BIS or any other 

agency of competent jurisdiction, you 

must permit access to and copying of 

any record relating to compliance with 

the requirements of the CWCR. This 

requires that you make available the 

equipment and, if necessary, 

knowledgeable personnel for locating, 

reading, and reproducing any record.

§ 721.2 Recordkeeping. 

(a) Requirements. Each person, 

facility, plant site or trading company 

required to submit a declaration, report, 

or advance notification under parts 712 

through 715 of the CWCR must retain all 

supporting materials and 

documentation used by a unit, plant, 

facility, plant site or trading company to 

prepare such declaration, report, or 

advance notification to determine 

production processing, consumption, 

export or import of chemicals. 

(b) Five year retention period. All 

supporting materials and 

documentation required to be kept 

under paragraph (a) of this section must 

be retained for five years from the due 

date of the applicable declaration, 

report, or advance notification, or for 

five years from the date of submission 

of the applicable declaration, report or 

advance notification, whichever is later. 

Due dates for declarations, reports and 

advance notifications are provided in 

parts 712 through 715 of the CWCR. 

(c) Location of records. If a facility is 

subject to inspection under part 716 of 

the CWCR, records retained under this 

section must be maintained at the 

facility or must be accessible 

electronically at the facility for purposes 

of inspection of the facility by 

Inspection Teams. If a facility is not

subject to inspection under part 716 of 

the CWCR, records retained under this 

section may be maintained either at the 

facility subject to a declaration, report, 

or advance notification requirement, or 

at a remote location, but all records 

must be accessible to any authorized 

agent, official or employee of the U.S. 

Government under § 721.1. 

(d) Reproduction of original records.

(1) You may maintain reproductions 

instead of the original records provided 

all of the requirements of paragraph (b) 

of this section are met. 

(2) If you must maintain records 

under this part, you may use any 

photostatic, miniature photographic, 

micrographic, automated archival 

storage, or other process that 

completely, accurately, legibly and 

durably reproduces the original records 

(whether on paper, microfilm, or 

through electronic digital storage 

techniques). The process must meet all 

of the following requirements, which 

are applicable to all systems: 

(i) The system must be capable of 

reproducing all records on paper. 

(ii) The system must record and be 

able to reproduce all marks, 

information, and other characteristics of 

the original record, including both 

obverse and reverse sides (unless blank) 

of paper documents in legible form. 

(iii) When displayed on a viewer, 

monitor, or reproduced on paper, the 

records must exhibit a high degree of 

legibility and readability. For purposes 

of this section, legible and legibility 

mean the quality of a letter or numeral 

that enable the observer to identify it 

positively and quickly to the exclusion 

of all other letters or numerals. Readable 

and readability mean the quality of a 

group of letters or numerals being 

recognized as complete words or 

numbers. 

(iv) The system must preserve the 

initial image (including both obverse 

and reverse sides, unless blank, of paper 

documents) and record all changes, who 

made them and when they were made. 

This information must be stored in such 

a manner that none of it may be altered 

once it is initially recorded. 

(v) You must establish written 

procedures to identify the individuals 

who are responsible for the operation, 

use and maintenance of the system. 

(vi) You must keep a record of where, 

when, by whom, and on what 

equipment the records and other 

information were entered into the 

system. 

(3) Requirements applicable to a 

system based on digital images. For 

systems based on the storage of digital 

images, the system must provide 

accessibility to any digital image in the 

system. The system must be able to 

locate and reproduce all records 

according to the same criteria that 

would have been used to organize the 

records had they been maintained in 

original form. 

Federal Register / Vol. 69, No. 234 / Tuesday, December 7, 2004 / Proposed Rules 70809

(4) Requirements applicable to a 

system based on photographic 

processes. For systems based on 

photographic, photostatic, or miniature 

photographic processes, the records 

must be maintained according to an 

index of all records in the system 

following the same criteria that would 

have been used to organize the records 

had they been maintained in original 

form.

§ 721.3 Destruction or disposal of records. 

If BIS or other authorized U.S. 

government agency makes a formal or 

informal request for a certain record or 

records, such record or records may not 

be destroyed or disposed of without the 

written authorization of the requesting 

entity.

PART 722—INTERPRETATIONS 

[RESERVED]

Note: This part is reserved for 

interpretations of parts 710 through 721 and 

also for applicability of decisions by the 

Organization for the Prohibition of Chemical 

Weapons (OPCW).

PARTS 723–729—[RESERVED]

Dated: November 26, 2004. 

Matthew S. Borman, 

Deputy Assistant Secretary for Export 

Administration.

[FR Doc. 04–26517 Filed 12–6–04; 8:45 am] 

BILLING CODE 3510–33–P