[Federal Register Volume 83, Number 237 (Tuesday, December 11, 2018)]
[Notices]
[Pages 63613-63615]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-26734]


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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

[Docket No. 181108999-8999-01]
RIN 0694-XC051


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) During Calendar Year 
2018

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

[[Page 63614]]

Weapons Convention (CWC), through the Chemical Weapons Convention 
Implementation Act and the Chemical Weapons Convention Regulations 
(CWCR), has had on commercial activities involving ``Schedule 1'' 
chemicals during calendar year 2018. The purpose of this notice of 
inquiry is to collect information to assist BIS in its preparation of 
the annual certification to the Congress on whether the legitimate 
commercial activities and interests of chemical, biotechnology, and 
pharmaceutical firms are 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 January 10, 2019.

ADDRESSES: You may submit comments by any of the following methods 
(please refer to RIN 0694-XC051 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-2018-0032;
     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) 482-2163. 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--SCHEDULE 1 CHEMICALS'' 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:
    (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 OPCW (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);

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    (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 by a biochemical or 
biologically mediated reaction. 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 CWC, through the Chemical 
Weapons Convention Implementation Act and the CWCR, has had on 
commercial activities involving ``Schedule 1'' chemicals during 
calendar year 2018. 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. BIS will consider all comments received on or before 
January 10, 2019. All comments (including any personally identifying 
information or information for which a claim of confidentially is 
asserted either in those comments or their transmittal emails) will be 
made available for public inspection and copying. Parties who wish to 
comment anonymously may do so by submitting their comments via 
Regulations.gov, leaving the fields that would identify the commenter 
blank and including no identifying information in the comment itself.

    Dated: December 3, 2018.
Matthew S. Borman,
Deputy Assistant Secretary for Export Administration.
[FR Doc. 2018-26734 Filed 12-10-18; 8:45 am]
 BILLING CODE 3510-33-P