[Federal Register Volume 81, Number 230 (Wednesday, November 30, 2016)]
[Notices]
[Pages 86322-86323]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-28799]



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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

[Docket No. 161024999-6999-01]


Impact of the Implementation of the Chemical Weapons Convention 
(CWC) on Legitimate Commercial Chemical, Biotechnology, and 
Pharmaceutical Activities Involving ``Schedule 1'' Chemicals (Including 
Schedule 1 Chemicals Produced as Intermediates) Through Calendar Year 
2016

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 2016. The purpose of this 
notice of inquiry is to collect information to assist BIS in its 
preparation of the annual certification to Congress on whether the 
legitimate commercial activities and interests of chemical, 
biotechnology, and pharmaceutical firms are being harmed by such 
implementation. This certification 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 30, 2016.

ADDRESSES: You may submit comments by any of the following methods 
(please refer to RIN 0694-XC034 in all comments and in the subject line 
of email comments):
     Federal rulemaking portal (http://www.regulations.gov)--
you can find this notice by searching on its regulations.gov docket 
number, which is BIS-2016-0038;
     Email: [email protected]--include the phrase 
``Schedule 1 Notice of Inquiry'' in the subject line;
     Fax: (202) 482-3355 (Attn: Willard Fisher);
     By mail or delivery to Regulatory Policy Division, Bureau 
of Industry and Security, U.S. Department of Commerce, Room 2099B, 14th 
Street and Pennsylvania Avenue NW., Washington, DC 20230.

FOR FURTHER INFORMATION CONTACT: For questions on the Chemical Weapons 
Convention requirements for ``Schedule 1'' chemicals, contact Douglas 
Brown, 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 in 
order to achieve 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 (Part VI of the ``Verification Annex'') restricts the 
production of ``Schedule 1'' chemicals for protective purposes to two 
facilities per State Party: a single small-scale facility (SSSF) and a 
facility for production in quantities not exceeding 10 kg per year. 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 by Presidential 
Decision Directive (PDD) 70 (December 17, 1999), which specifies agency 
and departmental responsibilities as part of the U.S. implementation of 
the CWC, the Department of Defense (DOD) was assigned the 
responsibility to operate these two facilities. Although this 
assignment of responsibility to DOD under PDD-70 effectively precluded 
commercial production of ``Schedule 1'' chemicals for protective 
purposes in the United States, it did not establish any limitations on 
``Schedule 1'' chemical activities that are not prohibited by the CWC. 
However, DOD does maintain strict controls on ``Schedule 1'' chemicals 
produced at its facilities in order to ensure accountability for such 
chemicals, as well as their proper use, 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 prohibit commercial 
production of ``Schedule 1'' chemicals for ``protective purposes'' 
because such production is effectively precluded per PDD-70, as 
described above--see 15 CFR 712.2(a)). The CWCR also contain other 
requirements and prohibitions that apply to ``Schedule 1'' chemicals 
and/or ``Schedule 1'' facilities. Specifically, the CWCR:

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    (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));
    (3) Provide for 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 a 
Schedule 1 chemical'' means the formation of ``Schedule 1'' chemicals 
through chemical synthesis, as well as processing to extract and 
isolate ``Schedule 1'' chemicals produced biologically. Such production 
is understood, for CWCR declaration purposes, to include intermediates, 
by-products, or waste products that are produced and consumed within a 
defined chemical manufacturing sequence, where such intermediates, by-
products, 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 
2016. 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.

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 30, 2016. The Department will consider 
all comments received before the close of the comment period. Comments 
received after the end of the comment period may not be considered. 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 23, 2016.
Kevin J. Wolf,
Assistant Secretary for Export Administration.
[FR Doc. 2016-28799 Filed 11-29-16; 8:45 am]
 BILLING CODE 3510-33-P