[Federal Register Volume 64, Number 250 (Thursday, December 30, 1999)]
[Rules and Regulations]
[Pages 73811-73817]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-33239]


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DEPARTMENT OF STATE

22 CFR Part 103

[Public Notice 3183]
RIN 1400-ZA01


Chemical Weapons Convention and the Chemical Weapons Convention 
Implementation Act of 1998; Taking of Samples; Recordkeeping and 
Inspections

AGENCY: Bureau of Arms Control, State.

ACTION: Final rule.

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SUMMARY: The Department of State is issuing this final rule to 
implement the provisions of 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), and the Chemical Weapons Convention Implementation Act 
of 1998 (Act) on the taking of samples and on the enforcement of the 
requirements concerning record keeping and inspections. The Act 
authorizes the United States Government to implement provisions of the 
Convention. These regulations will enable the United States Government 
to execute the relevant provisions of the Convention and the Act.

EFFECTIVE DATE: December 30, 1999.

FOR FURTHER INFORMATION CONTACT: Michael Coffee, Office of the Legal 
Adviser (L/ACN), 2201 C Street, N.W., Washington, DC 20520.

SUPPLEMENTARY INFORMATION: In Part II of the July 21, 1999 Federal 
Register, the Department of State (64 Fed. Reg. 39244) and the 
Department of Commerce (64 Fed. Reg. 39194) published, with a thirty 
day public comment period, proposed rules to implement provisions of 
the Convention on the Prohibition of the Development, Production, 
Stockpiling and Use of Chemical Weapons and on Their Destruction and 
the Chemical Weapons Convention Implementation Act of 1998.
    On April 25, 1997, the United States ratified the CWC. The 
Convention is both an arms control and nonproliferation treaty. As 
such, the Convention bans the development, production, stockpiling, and 
use of chemical weapons, and prohibits States Parties from assisting or 
encouraging anyone to engage in any activity prohibited by the 
Convention. States Parties to the Convention, including the United 
States, have agreed to a comprehensive verification regime that 
provides transparency and ensures that no State Party to the Convention 
is engaging in activity prohibited by the Convention. The verification 
regime includes declarations and reports by, and on-site inspection of, 
facilities engaged in or formerly engaged in activities involving 
certain chemicals. To further its nonproliferation objectives, the 
Convention requires restrictions on the import and export of certain 
chemicals. This rule implements Secs. 304(f)(1) and 501 of the Chemical 
Weapons Convention Implementation Act of 1998, 22 U.S.C. 6701 et seq. 
These regulations provide the guidelines under which the taking of a 
sample may be required during an on-site inspection conducted pursuant 
to the Convention. These regulations will also establish the civil 
enforcement regime for a violation of Secs. 306 or 405 of the Act.
    A number of responses were received by the Department of State. 
Following are relevant comments raised as well as the Department of 
State's response.

[[Page 73812]]

    1. Conformity with the Department of Commerce's Regulations. One 
respondent indicated that the Departments of State's and Commerce's 
proposed regulations implementing the Convention and the Act did not 
always conform. The regulations have been modified to be more 
consistent.
    2. Definitions. One respondent indicated that the definition of 
Administrative Law Judge was circular. As Administrative Law Judges are 
established by Title 5 of the United States Code, and are already 
defined in Sec. 719.1(b) of the Department of Commerce's regulations, 
the term will not be defined in this rule. At the request of the same 
respondent, ``Inspection assistant'' has been defined. The same 
respondent requested a definition of ``Site representatives.'' Because 
the term is self-explanatory, it will not be defined in this rule.
    3. Consultation with facility prior to requiring a sample. All 
respondents requested that the Host Team Leader communicate with a 
representative of the site prior to the requirement of a sample. In 
practice, the site representative will be involved throughout the 
inspection. In Sec. 103.3(a), the rule now explicitly gives the site 
representative the right to communicate reasons for which a sample 
should not be required.
    4. Voluntary provision of samples. One respondent stated that a 
facility should be able to provide a sample without being required to 
do so. Although the section requiring the provision of samples had been 
drafted for situations in which samples are not volunteered, a new 
provision has been inserted in Sec. 103.3(a) recognizing that samples 
may be voluntarily provided.
    5. Written notification of requirement to provide a sample. One 
respondent requested that the notification of a requirement to provide 
a sample be in writing. This request has been approved, and is 
reflected in Sec. 103.3(b).
    6. Purpose of analysis of samples. All respondents commented on the 
limitation of the language concerning the reasons for analysis of 
samples. The provision has been deleted as it is unnecessary. Part II, 
paragraph 39, of the Convention's Verification Annex already provides 
that the Inspection Team may only engage in activities that are 
necessary to discharge its functions.
    7. On-site analysis of samples. All respondents recommended that 
samples be analyzed on-site, where possible. This will occur pursuant 
to paragraph 53 of Part II of the Convention's Verification Annex, 
which provides that ``[w]here possible, the analysis of samples shall 
be performed on-site.''
    8. Observing the taking of a sample. One respondent suggested that 
the owner or operator of a facility should be permitted to observe the 
taking of a sample. The owner or operator, occupant or agent in charge 
of the inspected premises already has the right to decide whether a 
representative of the premises will take the sample. The rule has been 
modified in Sec. 103.3(f) to explicitly allow the owner or operator, 
occupant or agent in charge of the inspected premises to elect to have 
a representative present during the taking of a sample.
    9. United States National Authority (USNA) decision that a sample 
is not required. One respondent requested clarification that a decision 
by the USNA not to require a sample will result in no requirement to 
provide a sample. The rule has been modified in Sec. 103.3(e)(2) 
accordingly.
    10. Failure to comply with section 103.3 of this rule. One 
respondent has questioned the text in Sec. 103.3(i). Because a failure 
to provide a required sample might delay or impede an inspection, it 
may be determined to be a violation of Sec. 306 of the Act.
    11. Handling of samples. One respondent has recommended that 
samples should be handled in a manner consistent with facility rules. 
Such a provision belongs in a facility agreement between the United 
States and the Organization for the Prohibition of Chemical Weapons.
    12. Interpretation of Sections 306 and 405 of the Act. All 
respondents sought clarity concerning actions that will be considered 
violations of sections 306 and 405 of the Act. Because determinations 
of violations are fact-specific, it would be impossible to adequately 
``interpret'' these provisions in this rule.
    13. Recordkeeping Requirement. One respondent stated that 
Sec. 103.5(b)(3) of the proposed rule exceeded the authority of 
Sec. 405(3) of the Act. That provision had been modified to provide 
clarity to the public. However, to avoid confusion, Sec. 103.5(b)(3) 
now repeats the language of Sec. 405(3) of the Act.
    14. Requesting a hearing. One respondent suggested that thirty (30) 
days should be permitted to respond to a Notice of Violation and 
Assessment and a proposed order. Because Sec. 501(a)(2)(A) of the Act 
establishes a fifteen (15) day timeframe for a response, this rule 
permits only fifteen (15) days for a response.
    15. Computation of time for section 103.8 of this rule. One 
respondent requested that this rule adopt rules to compute time for 
purposes of Sec. 103.8. A computation rule is included in 
Sec. 103.8(c).
    16. Timing of review of initial decision. All respondents requested 
more time during the review of the initial decision in Sec. 103.8(a). 
Under Sec. 501(a)(3) of the Act, an initial decision and order becomes 
final unless the head of the USNA modifies or vacates the decision and 
order within thirty (30) days. Minor changes were made to the timelines 
in Sec. 103.8(a) to the extent possible, consistent with Sec. 501(a)(3) 
of the Act.
    17. Introduction of new or additional evidence. One respondent 
recommended that new or additional evidence be permitted during the 
review of an initial decision. Text has been deleted from 
Sec. 103.8(a)(2); instead Sec. 557 of the Administrative Procedure Act 
shall govern.
    18. Oral Argument. Two respondents recommended that oral argument 
should not be explicitly precluded. Section 103.8(a)(6) no longer 
explicitly precludes oral argument. The Administrative Law Judge will 
have discretion in permitting oral argument.

Administrative Procedure Act Requirements

    Because this rule involves a foreign affairs function of the United 
States, it is not subject to 5 U.S.C. 553 and 554. However, the 
Department has previously issued this rule in proposed form and 
comments were encouraged for the development of this final rule.

Regulatory Flexibility Analysis

    Because this rule involves a foreign affairs function of the United 
States, the Department of State is not required to prepare a regulatory 
flexibility analysis.

Executive Order 12866 Determiniation

    This rule is exempt from Executive Order 12866, but has been 
reviewed internally by the Department to ensure consistency with the 
purposes thereof.

Paperwork Reduction Act Statement

    Section 103.5(b) of this rule states that no person may willfully 
fail or refuse: (1) to establish or maintain any record required under 
the Chemical Weapons Convention Implementation Act or 15 CFR Parts 710 
through 722; (2) to submit any report, notice, or other information 
prescribed by the Act or 15 CFR Parts 710 through 722; or (3) to permit 
access to or copying of any record that is exempt from disclosure under 
the Act or 15 CFR Parts 710 through 722.
    Notwithstanding any other provision of law, no person is required, 
nor shall any person be subject to a penalty for failure, to comply 
with a collection of

[[Page 73813]]

information, subject to the Paperwork Reduction Act (PRA), unless that 
collection of information displays a currently valid OMB Control 
Number. In promulgating 15 CFR Parts 710 through 722, the Department of 
Commerce revised an existing collection of information requirement 
subject to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et 
seq.), which has been submitted for approval to the Office of 
Management and Budget. Accordingly, the Department of State will not 
seek the approval of the Office of Management and Budget. The public 
reporting burdens for the new collections of information are estimated 
to average 9 hours for Schedule 1 chemicals, 7.2 hours for Schedule 2 
chemicals, 2.5 hours for Schedule 3 chemicals, 5.3 hours for 
unscheduled discrete organic chemicals, and .17 hours for Schedule 1 
notifications. These estimates include the time required to complete 
the required forms.

Unfunded Mandates Reform Act Requirements

    No actions are necessary under the provisions of the Unfunded 
Mandates Reform Act of 1995.

Federalism Assessment

    Because this rule will not have a substantial direct effect on the 
states, on the relationship between the national government and the 
states, or on the distribution of power and responsibilities among the 
various levels of government, a Federalism Assessment is not warranted.

List of Subjects in 22 CFR Part 103

    Administrative practice and procedures, Chemicals, Foreign 
relations, Freedom of information, International organizations, 
Investigations, National security information, Penalties, Reporting and 
recordkeeping requirements, Treaties.

    For the reasons set forth in the preamble, the Department adds to 
subchapter K the following part 103 to Title 22 of the Code of Federal 
Regulations:

PART 103--REGULATIONS FOR IMPLEMENTATION OF THE CHEMICAL WEAPONS 
CONVENTION AND THE CHEMICAL WEAPONS CONVENTION IMPLEMENTATION ACT 
OF 1998 ON THE TAKING OF SAMPLES AND ON ENFORCEMENT OF REQUIREMENTS 
CONCERNING RECORDKEEPING AND INSPECTIONS

Subpart A--General

Sec.
103.1  Purpose.
103.2  Definitions.

Subpart B--Samples

103.3  Requirement to provide a sample.

Subpart C--Recordkeeping and Inspection Requirements

103.4  General.
103.5  Violations.
103.6  Penalties.
103.7  Initiation of administrative enforcement proceedings.
103.8  Final agency decision after administrative proceedings.
103.9  Final agency decision after settlement negotiations.
103.10  Appeals.
103.11  Payment of final assessment.
103.12  Reporting a violation.

    Authority: Pub. L. 105-277, 112 Stat. 2681, Div. I (22 U.S.C. 
6701 et seq.).

Subpart A--General


Sec. 103.1  Purpose.

    This part is intended to implement sections 304(f)(1) and 501 of 
the Chemical Weapons Convention Implementation Act of 1998 (Act), 22 
U.S.C. 6701 et seq. The Chemical Weapons Convention Regulations 
promulgated by the Department of Commerce, 15 CFR Parts 710 through 
722, also implement sections of the Act.


Sec. 103.2  Definitions.

    The following are definitions of terms as used in this part only.
    Bureau of Export Administration (BXA). The Bureau of Export 
Administration of the United States Department of Commerce, including 
the Office of Export Administration and the Office of Export 
Enforcement.
    Chemical Weapons Convention (CWC or Convention). 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, and entered into force on April 29, 
1997.
    CWCIA. The Chemical Weapons Convention Implementation Act of 1998. 
(22 U.S.C. 6701 et seq.)
    CWCR. The Chemical Weapons Convention Regulations promulgated by 
the Department of Commerce. (15 CFR parts 710 through 722.)
    Executive Director. The Executive Director, Office of the Legal 
Adviser, U.S. Department of State.
    Facility agreement. A written agreement or arrangement between a 
State Party to the Convention and the Organization for the Prohibition 
of Chemical Weapons relating to a specific facility subject to on-site 
verification pursuant to Articles IV, V, and VI of the Convention.
    Final decision. A decision or order assessing a civil penalty, or 
otherwise disposing of or dismissing a case, which is not subject to 
further administrative review under this part, but which may be subject 
to collection proceedings or judicial review in an appropriate federal 
court as authorized by law.
    Host Team. The U.S. Government team that accompanies the Inspection 
Team during a CWC inspection to which this part applies.
    Host Team Leader. The head of the U.S. Government team that hosts 
and accompanies the Inspection Team during a CWC inspection to which 
this part applies.
    Inspection assistant. An individual designated by the Technical 
Secretariat to assist inspectors in an inspection, such as medical, 
security and administrative personnel and interpreters.
    Inspection Team. The group of inspectors and inspection assistants 
assigned by the Director-General of the OPCW's Technical Secretariat to 
conduct a particular inspection.
    Lead agency. The executive department or agency responsible for 
implementation of the CWC declaration and inspection requirements for 
specified facilities. The lead agencies are the Department of Defense 
(DOD) for facilities owned and operated by DOD (including those 
operated by contractors to the agency), and those facilities leased to 
and operated by DOD (including those operated by contractors to the 
agency); the Department of Energy (DOE) for facilities owned and 
operated by DOE (including those operated by contractors to the 
agency), and those facilities leased to and operated by DOE (including 
those operated by contractors to the agency), including the National 
Laboratories and components of the nuclear weapons complex; and the 
Department of Commerce (DOC) for all facilities that are not owned and 
operated by or leased to and operated by DOD, DOE or other U.S. 
Government agencies. Other departments and agencies that have notified 
the United States National Authority of their decision to be excluded 
from the CWCR shall also have lead agency responsibilities for 
facilities that are

[[Page 73814]]

owned or operated by (including those operated by contractors to the 
agency), or that are leased to or operated by, those other departments 
and agencies (including those operated by contractors to the agency).
    Office of Chemical and Biological Weapons Conventions. The office 
in the Bureau of Arms Control of the United States Department of State 
that includes the United States National Authority Coordinating Staff.
    Organization for the Prohibition of Chemical Weapons (OPCW). The 
entity established by the Convention to achieve the object and purpose 
of the Convention, to ensure the implementation of its provisions, 
including those for international verification of compliance with it, 
and to provide a forum for consultation and cooperation among States 
Parties.
    Party. The United States Department of State and any person named 
as a respondent under this part.
    Perimeter. In case of a challenge inspection, the external boundary 
of the site, defined by either geographic coordinates or description on 
a map.
    Person. 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.
    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.
    Secretary. The Secretary of State.
    Technical Secretariat. The Technical Secretariat of the 
Organization for the Prohibition of Chemical Weapons established by the 
Chemical Weapons Convention.
    United States National Authority. The Department of State serving 
as the national focal point for effective liaison with the Organization 
for the Prohibition of Chemical Weapons and States Parties to the 
Convention and implementing the provisions of the CWCIA in coordination 
with an interagency group designated by the President consisting of the 
Secretary of Defense, the Attorney General, the Secretary of Commerce, 
the Secretary of Energy, the Chairman of the Joint Chiefs of Staff and 
the heads of agencies considered necessary or advisable by the 
President, or their designees. The Secretary of State is the Director 
of the United States National Authority.

Subpart B--Samples


Sec. 103.3  Requirement to provide a sample.

    (a) Voluntary provision of a sample. The Host Team Leader will 
notify appropriate site representatives of any request by an Inspection 
Team to take a sample. At the request of the appropriate site 
representative, this notification will be in writing. A site 
representative may volunteer to provide a sample to the Inspection 
Team, or may communicate to the Host Team Leader any reason for which 
the representative believes a sample should not be required.
    (b) Notification of requirement to provide a sample. If a sample is 
not provided pursuant to paragraph (a) of this section, the Host Team 
Leader will notify, in writing, the owner or operator, occupant or 
agent in charge of an inspected premises of any requirement, under 
paragraph (c) or (e) of this section, to provide a sample pursuant to a 
request, made in accordance with paragraph (k) of this section, of an 
Inspection Team of the Technical Secretariat.
    (c) Requirement to provide a sample. Pursuant to section 304(f)(1) 
of the CWCIA, unless a lead agency advises the United States National 
Authority pursuant to paragraph (d) of this section, the owner or 
operator, occupant or agent in charge of the premises to be inspected 
is hereby required to provide a sample pursuant to a request, made in 
accordance with paragraph (k) of this section, of an Inspection Team of 
the Technical Secretariat that a sample be taken in accordance with the 
applicable provisions contained in the Chemical Weapons Convention and 
the CWCIA.
    (d) Consultations with the United States National Authority. After 
consulting with the Host Team Leader, a lead agency that finds that any 
of the following conditions, as modified pursuant to paragraph (j) of 
this section if applicable, may not have been satisfied shall promptly 
advise the United States National Authority, which, in coordination 
with the interagency group designated by the President in section 2 of 
Executive Order 13128, shall make a decision:
    (1) The taking of a sample is consistent with the inspection aims 
under the Convention and with its Confidentiality Annex;
    (2) The taking of a sample does not unnecessarily hamper or delay 
the operation of a facility or affect its safety, and is arranged so as 
to ensure the timely and effective discharge of the Inspection Team's 
functions with the least possible inconvenience and disturbance to the 
facility;
    (3) The taking of a sample is consistent with the applicable 
facility agreement. In particular:
    (i) Any sample will be taken at sampling points agreed to in the 
relevant facility agreement; and
    (ii) Any sample will be taken according to procedures agreed to in 
the relevant facility agreement;
    (4) In the absence of a facility agreement, due consideration is 
given to existing sampling points used by the owner or operator, 
occupant or agent in charge of the premises, consistent with any 
procedures developed pursuant to the CWCR (15 CFR parts 710 through 
722);
    (5) The taking of a sample does not affect the safety of the 
premises and will be consistent with safety regulations established at 
the premises, including those for protection of controlled environments 
within a facility and for personal safety;
    (6) The taking of a sample does not pose a threat to the national 
security interests of the United States; and
    (7) The taking of a sample is consistent with any conditions 
negotiated pursuant to paragraph (j) of this section, if applicable.
    (e) Determination by United States National Authority. (1) If, 
after being advised by the lead agency pursuant to paragraph (d) of 
this section, the United States National Authority, in coordination 
with the interagency group designated by the President to implement the 
provisions of the CWCIA, determines that all of the conditions of 
paragraph (d) are satisfied and that a sample shall be required, then 
the owner or the operator, occupant or agent in charge of the premises 
shall provide a sample pursuant to a request of the Inspection Team of 
the Technical Secretariat.
    (2) If, however, after being advised by the lead agency pursuant to 
paragraph (d) of this section, the United States National Authority, in 
coordination with the interagency group designated by the President to 
implement the provisions of the CWCIA, determines that any of the 
conditions of paragraph (d) are not satisfied and that a sample shall 
not be required, then the owner or the operator, occupant or agent in 
charge of the premises shall not be required to provide a sample 
pursuant to a request of the Inspection Team of the Technical 
Secretariat.
    (f) Person to take a sample. If a sample is required, the owner or 
the operator, occupant or agent in charge of the inspected premises 
will determine whether the sample will be taken by a representative of 
the premises, the Inspection Team, or any other

[[Page 73815]]

individual present. The owner or the operator, occupant or agent in 
charge of the inspected premises may elect to have a representative 
present during the taking of a sample.
    (g) Requirement that samples remain in the United States. No sample 
collected in the United States pursuant to an inspection permitted by 
the CWCIA may be transferred for analysis to any laboratory outside the 
territory of the United States.
    (h) Handling of samples. Samples will be handled in accordance with 
the Convention, the CWCIA, other applicable law, and the provisions of 
any applicable facility agreement.
    (i) Failure to comply with this section. Failure by any person to 
comply with this section may be treated as a violation of section 306 
of the Act and section 103.5(a).
    (j) Conditions that restrict sampling activities during challenge 
inspections. During challenge inspections within the inspected premises 
the Host Team may negotiate conditions that restrict activities 
regarding sampling, e.g., conditions that restrict where, when, and how 
samples are taken, whether samples are removed from the site, and how 
samples are analyzed.
    (k) Format of Inspection Team request. It is the policy of the 
United States Government that Inspection Team requests for samples 
should be in written form from the head of the Inspection Team. When 
necessary, before a sample is required to be provided, the Host Team 
Leader should seek a written request from the head of the Inspection 
Team.
    (l) Requirement to provide a sample in the band around the outside 
of the perimeter during a challenge inspection. In a band, not to 
exceed a width of 50 meters, around the outside of the perimeter of the 
inspected site, the Inspection Team, during a challenge inpsection, may 
take wipes, air, soil or effluent samples where either:
    (1) There is consent; or
    (2) Such activity is authorized by a search warrant obtained 
pursuant to section 305(b)(4) of the CWCIA.

Subpart C--Recordkeeping and Inspection Requirements


Sec. 103.4  General.

    This subpart implements the enforcement of the civil penalty 
provisions of section 501 of the Chemical Weapons Convention 
Implementation Act of 1998 (CWCIA), and sets forth relevant 
administrative proceedings by which such violations are adjudicated. 
Both the Department of State (in this subpart), and the Department of 
Commerce (in part 719 of the CWCR at 15 CFR parts 710 through 722) are 
involved in the implementation and enforcement of section 501.


Sec. 103.5  Violations.

    (a) 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 CWCIA.
    (b) Failure to establish or maintain records. No person may 
willfully fail or refuse:
    (1) To establish or maintain any record required by the CWCIA or 
the Chemical Weapons Convention Regulations (CWCR, 15 CFR parts 710 
through 722) of the Department of Commerce; or
    (2) To submit any report, notice, or other information to the 
United States Government in accordance with the CWCIA or CWCR; or
    (3) To permit access to or copying of any record that is exempt 
from disclosure under the CWCIA or the CWCR.


Sec. 103.6  Penalties.

    (a) 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 willfully 
disrupted, delayed or otherwise impeded an authorized inspection, as 
set forth in Sec. 103.5(a), 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 to submit any report, notice, or 
other information required by the CWCIA or the CWCR, or to permit 
access to or copying of any record exempt from disclosure under the 
CWCIA or CWCR as set forth in Sec. 103.5(b), shall pay a civil penalty 
in an amount not to exceed $5,000 for each violation.
    (b) Criminal penalties. Any person that knowingly violates the 
CWCIA by willfully failing or refusing to permit entry or inspection; 
or by disrupting, delaying or otherwise impeding an inspection 
authorized by the CWCIA; 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 CWCIA or 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, or be imprisoned for not more than one year, or 
both.
    (c) Other remedial action. (1) Injunction. The United States may, 
in a civil action, obtain an injunction against:
    (i) The conduct prohibited under 18 U.S.C. 229 or 229C; or
    (ii) The preparation or solicitation to engage in conduct 
prohibited under 18 U.S.C. 229 or 229D.
    (2) In addition, the United States may, in a civil action, restrain 
any violation of section 306 or section 405 of the CWCIA, or compel the 
taking of any action required by or under the CWCIA or the Convention.


Sec. 103.7  Initiation of administrative enforcement proceedings.

    (a) Issuance of Notice of Violation and Assessment (NOVA). The 
Director of the Office of Export Enforcement, Bureau of Export 
Administration, Department of Commerce, may request that the Secretary 
initiate an administrative enforcement proceeding under this section 
and 15 CFR 719.5. If the request is in accordance with applicable law, 
the Secretary will initiate an administrative enforcement proceeding by 
issuing a Notice of Violation and Assessment (NOVA). The Office of 
Chief Counsel for Export Administration, Department of Commerce shall 
serve the NOVA as directed by the Secretary.
    (b) 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 paragraph (e) of this section 
and the CWCR (15 CFR parts 710 through 722) at 15 CFR 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.
    (c) Proposed order. A proposed order shall accompany every 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.

[[Page 73816]]

    (d) Notice. The Secretary shall notify, via the Department of 
Commerce, the respondent (or respondent's agent for service of process 
or attorney) of the initiation of administrative proceedings by 
sending, via first class mail, facsimile, or by personal delivery, the 
relevant documents.
    (e) Time to answer. If the respondent wishes to contest the NOVA 
and proposed order issued by the Secretary, the respondent must request 
a hearing in writing within 15 days from the 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 for Export Administration, Department of 
Commerce, and any other address(es) specified in the NOVA, in 
accordance with 15 CFR 719.8.
    (f) 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 believes 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.
    (g) English required. The request for hearing, answer, and all 
other papers and documentary evidence must be submitted in English.
    (h) 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 Secretary will sign the proposed order, which 
shall, upon signature, become final and unappealable.
    (i) Administrative procedures. The regulations that govern the 
administrative procedures that apply when a hearing is requested are 
set forth in the CWCR at 15 CFR part 719.


Sec. 103.8  Final agency decision after administrative proceedings.

    (a) Review of initial decision.
    (1) Petition for review. Any party may, within 7 days of the 
Administrative Law Judge's (ALJ) certification of the initial decision 
and order, petition the Secretary for review of the initial decision. A 
petition for review shall be addressed to and served on the Executive 
Director of the Office of the Legal Adviser, U.S. Department of State, 
2201 C Street, N.W., Room 5519, Washington D.C. 20520, and shall also 
be served on the Chief Counsel for Export Administration, U.S. 
Department of Commerce, 14th Street and Constitution Avenue, N.W., Room 
H-3839, Washington, D.C. 20230, and 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 not 
supported by substantial evidence of record;
    (ii) That a necessary legal conclusion or finding is contrary to 
law;
    (iii) That a prejudicial procedural error has occurred; or
    (iv) That the decision or the extent of sanctions is arbitrary, 
capricious or an abuse of discretion.
    (2) Content of petition for review. The petition must specifically 
set forth the grounds on which review is requested and be supported by 
citations to the record, statutes, regulations, and principal 
authorities.
    (3) Decision to review. Review of the initial decision by the 
Secretary is discretionary, and is not a matter of right. The Secretary 
shall accept or decline review of the initial decision and order within 
3 days after a petition for review is filed. If no such petition is 
filed, the Secretary may, on his or her own initiative, notify the 
parties within 10 days after the ALJ's certification of the initial 
decision and order that he or she intends to exercise his or her 
discretion to review the initial decision.
    (4) Effect of decision to review. The initial decision is stayed 
until further order of the Secretary upon a timely petition for review, 
or upon action to review taken by the Secretary on his or her own 
initiative.
    (5) Review declined. If the Secretary declines to exercise 
discretionary review, such order, and the resulting final agency 
decision, will be served on all parties personally, by overnight mail, 
or by registered or certified mail, return receipt requested. The 
Secretary need not give reasons for declining review.
    (6) Review accepted. If the Secretary grants a petition for review 
or decides to review the initial decision on his or her own initiative, 
he or she will issue an order confirming that acceptance and specifying 
any issues to be briefed by all parties within 10 days after the order. 
Briefing shall be limited to the issues specified in the order. Only 
those issues specified in the order will be considered by the 
Secretary. The parties may, within 5 days after the filing of any brief 
of the issues, file and serve a reply to that brief. The Department of 
Commerce shall review all written submissions, and, based on the 
record, make a recommendation to the Secretary as to whether the ALJ's 
initial decision should be modified or vacated. The Secretary will make 
a final decision within 30 days after the ALJ's certification of the 
initial decision and order.
    (b) Final decision. Unless the Secretary, within 30 days after the 
date of the ALJ's certification of the initial decision and order, 
modifies or vacates the decision and order, with or without conditions, 
the ALJ's initial decision and order shall become effective as the 
final decision and order of the United States Government. If the 
Secretary does modify or vacate the initial decision and order, that 
decision and order of the Secretary shall become the final decision and 
order of the United States Government. The final decision and order 
shall be served on the parties and will be made available to the 
public.
    (c) Computation of time for the purposes of this section. In 
computing any period of time prescribed or allowed by this section, the 
day of the act, event, or default from which the designated period of 
time begins to run is not included. The last day of the period is 
computed 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 
that 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.


Sec. 103.9  Final agency decision after settlement negotiations.

    (a) Settlements based on letter of intent to charge.--(1) Approval 
of settlement. Pursuant to Sec. 719.5(b) of the CWCR (15 CFR parts 710 
through 722), the Department of Commerce may notify a respondent by 
letter of the intent to charge. If, following the issuance of such a 
letter of intent to charge, the Department of Commerce and respondent 
reach an agreement to settle a case, the Department of Commerce will 
recommend the proposed settlement to the Secretary. If the

[[Page 73817]]

recommended settlement is in accordance with applicable law the 
Secretary will approve and sign it. No action is required by the ALJ in 
cases where the Secretary approves and signs such a settlement 
agreement and order.
    (2) Refusal to approve settlement. If the Secretary refuses to 
approve the recommended settlement, the Secretary will notify the 
parties and the case will proceed as though no settlement proposal had 
been made.
    (b) Settlements following issuance of a NOVA.--(1) Approval of 
settlement. When the Department of Commerce and respondent reach an 
agreement to settle a case after administrative proceedings have been 
initiated before an ALJ, the Department of Commerce will recommend the 
settlement to the Secretary of State. If the recommended settlement is 
in accordance with applicable law, the Secretary will approve and sign 
it. If the Secretary approves the settlement, the Secretary shall 
notify the ALJ that the case is withdrawn from adjudication.
    (2) Refusal to approve settlement. If the Secretary of State 
refuses to approve the recommended settlement, the Secretary will 
notify the parties of the disapproval, and the case will proceed as 
though no settlement proposal had been made.
    (c) Scope of settlement. 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 pursuant to 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 is 
vested in the Attorney General and the Department of Justice.
    (d) Finality. Cases that are settled may not be reopened or 
appealed.


Sec. 103.10  Appeals.

    Any person adversely affected by a final order respecting an 
assessment may, within 30 days after the final order is issued, file a 
petition in the Court of Appeals for the District of Columbia Circuit 
or for any other circuit in which the person resides or transacts 
business, to appeal the order.


Sec. 103.11  Payment of final assessment.

    (a) Time for payment. Full payment of the civil penalty must be 
made within 30 days of the date upon which the final order becomes 
effective, or within the time specified in the order. Payment shall be 
made in the manner specified in the NOVA.
    (b) Enforcement of order. The Secretary, through the Attorney 
General, may file suit in an appropriate district court if necessary to 
enforce compliance with a final order issued pursuant to this part. 
This suit will include a claim for interest at current prevailing rates 
from the date payment was due or ordered or, if an appeal was filed 
pursuant to Sec. 103.10, from the date of final judgment.
    (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.


Sec. 103.12  Reporting a violation.

    If a person learns that a violation of the Convention, the CWCIA, 
this part, or the CWCR (15 CFR parts 710 through 722) has occurred or 
may occur, that person may notify: United States National Authority, 
Office of Chemical and Biological Weapons Conventions, Bureau of Arms 
Control, U.S. Department of State, Washington, DC 20520, Telephone: 
(703) 235-1204 or toll-free (877) CWC-NACS ((877) 292-6227), Facsimile: 
(703) 235-1065.
Avis Bohlen,
Assistant Secretary of State, Bureau of Arms Control.
[FR Doc. 99-33239 Filed 12-29-99; 8:45 am]
BILLING CODE 4710-27-P