[Federal Register Volume 86, Number 228 (Wednesday, December 1, 2021)]
[Notices]
[Pages 68213-68215]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-26101]


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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

[Docket No. 211124-0245]
RIN 0694-XC087


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 2021

AGENCY: Bureau of Industry and Security, Commerce.

ACTION: Notice of inquiry.

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SUMMARY: The Bureau of Industry and Security is seeking public comments 
on the impact that implementation of the Chemical Weapons Convention, 
through the Chemical Weapons Convention Implementation Act of 1998 and 
the Chemical Weapons Convention Regulations, has had on commercial 
activities involving ``Schedule 1'' chemicals during calendar year 
2021. 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

[[Page 68214]]

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 Chemical Weapons Convention.

DATES: Comments must be received by January 3, 2022.

ADDRESSES: You may submit comments, identified by regulations.gov 
docket number BIS-2021-0043 or by RIN 0694-XC087, using any of the 
following methods:
     Federal rulemaking portal (http://www.regulations.gov). 
You can find this notice by searching under its regulations.gov docket 
number, which is BIS-2021-0043;
     Email: [email protected]. Include RIN 0694-XC087 
in the subject line of the message.
    All filers using the portal or email should use the name of the 
person or entity submitting the comments as the name of their files, in 
accordance with the instructions below. Parties submitting business 
confidential information should clearly identify the business 
confidential portion at the time of submission, file a statement 
justifying nondisclosure and referring to the specific legal authority 
claimed, and also provide a non-confidential version of the submission.
    For comments (including rebuttal comments) submitted electronically 
containing business confidential information, the file name of the 
business confidential version should begin with the characters ``BC.'' 
Any page containing business confidential information must be clearly 
marked ``BUSINESS CONFIDENTIAL'' on the top of that page. The 
corresponding non-confidential version of those comments must be 
clearly marked ``PUBLIC.'' The file name of the non-confidential 
version should begin with the character ``P.'' The ``BC'' or ``P'' (as 
appropriate) in the file name should be followed by the name of the 
person or entity submitting the comments. Any submissions with file 
names that do not begin with a ``P'' or ``BC'' will be assumed to be 
public and will be made publicly available through http://www.regulations.gov.

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, (202) 482-5808, Email: [email protected]. 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, (202) 482-6057, 
Email: [email protected].

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 George W. 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). In order to achieve the object 
and purpose of the Convention and the implementation of its provisions, 
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. 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. 
In the United States, the Chemical Weapons Convention Implementation 
Act of 1998, 22 U.S.C. 6701 et seq., implements the provisions of 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 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. DOD maintains 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. 
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.
    The provisions of the CWC that affect commercial activities 
involving ``Schedule 1'' chemicals are implemented in the CWCR (see 15 
CFR part 712) and in the Export Administration Regulations (EAR) (see 
15 CFR 742.18 and 15 CFR part 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

[[Page 68215]]

``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) Require 200 days advance notification of the establishment of 
new ``Schedule 1'' production facilities producing greater than 100 
grams aggregate of ``Schedule 1'' chemicals per calendar year (15 CFR 
712.4);
    (5) 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));
    (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 the definition of ``production'' in 
15 CFR 710.1), the phrase ``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. 
The phrase also encompasses the formation of a chemical through 
chemical reaction, including by a biochemical or biologically mediated 
reaction. ``Production of a Schedule 1 chemical'' 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 of 1998 and the CWCR, has had on 
commercial activities involving ``Schedule 1'' chemicals during 
calendar year 2021. 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 and in accordance with the instructions provided herein. 
BIS will consider all comments received on or before January 3, 2022.

Matthew S. Borman,
Deputy Assistant Secretary for Export Administration.
[FR Doc. 2021-26101 Filed 11-30-21; 8:45 am]
BILLING CODE 3510-33-P