[Federal Register Volume 75, Number 219 (Monday, November 15, 2010)]
[Notices]
[Pages 69630-69631]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-28689]


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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

[Docket No. 101103543-0543-02]


Impact of Implementation of the Chemical Weapons Convention on 
Commercial Activities Involving ``Schedule 1'' Chemicals, Including 
Production of Schedule 1 Chemicals as Intermediates, Through Calendar 
Year 2010

AGENCY: Bureau of Industry and Security, Commerce.

ACTION: Notice of inquiry.

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SUMMARY: The Bureau of Industry and Security (BIS) is seeking public 
comments on the impact that implementation of the Chemical Weapons 
Convention (CWC), through the Chemical Weapons Convention 
Implementation Act (CWCIA) and the Chemical Weapons Convention 
Regulations (CWCR), has had on commercial activities involving 
``Schedule 1'' chemicals during calendar year 2010. BIS reminds the 
public that the CWC, CWCIA, or CWCR have potential impacts on 
commercial activities whenever Schedule 1 chemicals (e.g., nitrogen 
mustards) are intermediates in the synthesis of other chemicals, not 
just when the Schedule 1 chemicals are end products. The purpose of 
this notice of inquiry is to collect information to assist BIS in its 
preparation of the annual certification to the Congress, which is 
required under Condition 9 of Senate Resolution 75, April 24, 1997, in 
which the Senate gave its advice and consent to the ratification of the 
CWC.

DATES: Comments must be received by December 15, 2010.

ADDRESSES: You may submit comments by any of the following methods:
    <bullet> E-mail: <a href="/cdn-cgi/l/email-protection#7f0819160c171a0d3f1d160c511b101c51181009"><span class="__cf_email__" data-cfemail="9deafbf4eef5f8efddfff4eeb3f9f2feb3faf2eb">[email protected]</span></a>. Include the phrase ``Schedule 
1 Notice of Inquiry'' in the subject line;
    <bullet> Fax: (202) 482-3355 (Attn: Willard Fisher);
    <bullet> 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.

FOR FURTHER INFORMATION CONTACT: For questions on the Chemical Weapons 
Convention requirements for ``Schedule 1'' chemicals, contact James 
Truske, Treaty Compliance Division, Office of Nonproliferation and 
Treaty Compliance, Bureau of Industry and Security, U.S. Department of 
Commerce, Phone: (202) 482-1001. For questions on the submission of 
comments, contact Willard Fisher, Regulatory Policy Division, Office of 
Exporter Services, Bureau of Industry and Security, U.S. Department of 
Commerce, Phone: (202) 482-2440.

SUPPLEMENTARY INFORMATION: 

Background

    In providing its advice and consent to the ratification of the 
Convention on the Prohibition of the Development, Production, 
Stockpiling, and Use of Chemical Weapons and Their Destruction, 
commonly called the Chemical Weapons Convention (CWC or ``the 
Convention''), the Senate included, in Senate Resolution 75 (S. Res. 
75, April 24, 1997), several conditions to its ratification. Condition 
9, titled ``Protection of Advanced Biotechnology,'' calls for the 
President to certify to Congress on an annual basis that ``the 
legitimate commercial activities and interests of chemical, 
biotechnology, and pharmaceutical firms in the United States are not 
being significantly harmed by the limitations of the Convention on 
access to, and production of, those chemicals and toxins listed in 
Schedule 1.'' On July 8, 2004, President Bush, by Executive Order 
13346, delegated his authority to make the annual certification to the 
Secretary of Commerce.
    The CWC is an international arms control treaty that contains 
certain verification provisions. In order to implement these 
verification provisions, the CWC established the Organization for the 
Prohibition of Chemical Weapons (OPCW). The CWC imposes certain 
obligations on countries that have ratified the Convention (i.e., 
States Parties), among which are the enactment of legislation to 
prohibit the production, storage, and use of chemical weapons, and the 
establishment of a National Authority to serve as the national focal 
point for effective liaison with the OPCW and other States Parties for 
the purpose of achieving the object and purpose of the Convention and 
the implementation of its provisions. The CWC also requires each State 
Party to implement a comprehensive data declaration and inspection 
regime to provide transparency and to verify that both the public and 
private sectors of the State Party are not engaged in activities 
prohibited under the CWC.
    ``Schedule 1'' chemicals consist of those toxic chemicals and 
precursors set forth in the CWC ``Annex on Chemicals'' and in 
Supplement No. 1 to part 712 of the Chemical Weapons Convention 
Regulations (CWCR) (15 CFR parts 710-722). The CWC identified these 
toxic chemicals and precursors as posing a high risk to the object and 
purpose of the Convention.
    The CWC restricts the production of ``Schedule 1'' chemicals for 
protective purposes to two facilities per State Party. The CWC Article-
by-Article Analysis submitted to the Senate in Treaty Doc. 103-21 
defined the term ``protective purposes'' to mean ``used for determining 
the adequacy of defense equipment and measures.'' Consistent with this 
definition, and as authorized via Presidential Decision Directive (PDD) 
70, December 17, 1999, the Department of Defense (DOD) was assigned the 
responsibility to operate these two facilities, thereby precluding 
commercial production of ``Schedule 1'' chemicals for protective 
purposes in the United States. The assignment of responsibility to DOD 
did not establish any limitations on ``Schedule 1'' chemical activities 
that are not prohibited by the CWC. However, the Department of Defense 
maintains strict controls on ``Schedule 1'' chemicals produced at its 
facilities in order to ensure the accountability and proper use of such 
chemicals, consistent with the object and purpose of the Convention.
    The provisions of the CWC that affect commercial activities 
involving ``Schedule 1'' chemicals are implemented in the CWCR (see 15 
CFR 712) and in the Export Administration Regulations (EAR) (see 15 CFR 
742.18 and 15 CFR 745), both of which are administered by the Bureau of 
Industry and Security (BIS). Pursuant to CWC requirements, the CWCR 
restrict commercial production of ``Schedule 1'' chemicals to research, 
medical, or pharmaceutical purposes. The CWCR also contain other 
requirements and prohibitions that apply to ``Schedule 1'' chemicals 
and/or ``Schedule 1'' facilities. Specifically, the CWCR:
    (1) Prohibit the import of ``Schedule 1'' chemicals from States not 
Party to the Convention (15 CFR 712.2(b));
    (2) Require annual declarations by certain facilities engaged in 
the production of ``Schedule 1'' chemicals in excess of 100 grams 
aggregate per calendar year (i.e., declared ``Schedule 1'' facilities) 
for purposes not prohibited by the Convention (15 CFR 712.5(a)(1) and 
(a)(2));

[[Page 69631]]

    (3) Require government approval of ``declared Schedule 1'' 
facilities (15 CFR 712.5(f));
    (4) Provide that ``declared Schedule 1'' facilities are subject to 
initial and routine inspection by the Organization for the Prohibition 
of Chemical Weapons (15 CFR 712.5(e) and 716.1(b)(1));
    (5) Require 200 days' advance notification of establishment of new 
``Schedule 1'' production facilities producing greater than 100 grams 
aggregate of ``Schedule 1'' chemicals per calendar year (15 CFR 712.4);
    (6) Require advance notification and annual reporting of all 
imports and exports of ``Schedule 1'' chemicals to, or from, other 
States Parties to the Convention (15 CFR 712.6, 742.18(a)(1) and 
745.1); and
    (7) Prohibit the export of ``Schedule 1'' chemicals to States not 
Party to the Convention (15 CFR 742.18(a)(1) and (b)(1)(ii)).
    For purposes of the CWCR (see 15 CFR 710.1), ``production of 
Schedule 1 chemicals'' means the formation of ``Schedule 1'' chemicals 
through chemical synthesis, as well as processing to extract and 
isolate ``Schedule 1'' chemicals. Such production is understood, for 
CWCR declaration purposes, to include intermediates, byproducts, or 
waste products that are produced and consumed within a defined chemical 
manufacturing sequence, where such intermediates, byproducts, or waste 
products are chemically stable and therefore exist for a sufficient 
time to make isolation from the manufacturing stream possible, but 
where, under normal or design operating conditions, isolation does not 
occur.

Request for Comments

    In order to assist in determining whether the legitimate commercial 
activities and interests of chemical, biotechnology, and pharmaceutical 
firms in the United States are significantly harmed by the limitations 
of the Convention on access to, and production of, ``Schedule 1'' 
chemicals as described in this notice, BIS is seeking public comments 
on any effects that implementation of the Chemical Weapons Convention, 
through the Chemical Weapons Convention Implementation Act and the 
Chemical Weapons Convention Regulations, has had on commercial 
activities involving ``Schedule 1'' chemicals during calendar year 
2010. To allow BIS to properly evaluate the significance of any harm to 
commercial activities involving ``Schedule 1'' chemicals, public 
comments submitted in response to this notice of inquiry should include 
both a quantitative and qualitative assessment of the impact of the CWC 
on such activities.
    Furthermore, it was recently brought to the attention of the 
Executive Council of the OPCW that a private pharmaceutical company 
located outside the United States utilized a production technology 
during which a ``Schedule 1'' chemical (a nitrogen mustard) was 
produced, as an intermediate, and then consumed to produce another 
chemical. This situation is currently being reviewed by the OPCW. In 
light of this development, BIS is seeking comments that address whether 
similar situations may exist in the United States.

Submission of Comments

    All comments must be submitted to one of the addresses indicated in 
this notice. The Department requires that all comments be submitted in 
written form.
    The Department encourages interested persons who wish to comment to 
do so at the earliest possible time. The period for submission of 
comments will close on December 15, 2010. The Department will consider 
all comments received before the close of the comment period. Comments 
received after the end of the comment period will be considered if 
possible, but their consideration cannot be assured. The Department 
will not accept comments accompanied by a request that a part or all of 
the material be treated confidentially because of its business 
proprietary nature or for any other reason. The Department will return 
such comments and materials to the persons submitting the comments and 
will not consider them. All comments submitted in response to this 
notice will be a matter of public record and will be available for 
public inspection and copying.
    The Office of Administration, Bureau of Industry and Security, U.S. 
Department of Commerce, displays public comments on the BIS Freedom of 
Information Act (FOIA) Web site at http://www.bis.doc.gov/foia. This 
office does not maintain a separate public inspection facility. If you 
have technical difficulties accessing this Web site, please call BIS's 
Office of Administration, at (202) 482-1093, for assistance.

    Dated: November 8, 2010.
Matthew S. Borman,
Deputy Assistant Secretary for Export Administration.
[FR Doc. 2010-28689 Filed 11-12-10; 8:45 am]
BILLING CODE 3510-33-P


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