BIS' Proposed Rule Would Update and Clarify the Chemical Weapons Convention Regulations (Part III)

The Bureau of Industry and Security (BIS) has issued a proposed rule that would revise the Chemical Weapons Convention Regulations (CWCR, 15 CFR Parts 710-722) by updating them to include additional requirements identified in the implementation of the Chemical Weapons Convention (CWC) and to clarify other CWC requirements.

BIS' proposed rule also summarizes the public comments it received in response to its December 30, 1999 interim CWCR rule. (See ITT's Online Archives or 12/30/99 news, 99122942, for BP summary of BIS' interim CWCR rule.)

This is Part III of a multi-part series of summaries on this proposed rule and highlights proposed revisions and additions to various sections of 15 CFR Part 713, as follows:

15 CFR Part 713 (Activities Involving Schedule 2 Chemicals)

Exports of Schedule 2 Chemicals to non-CWC parties would be prohibited. This proposed rule would add a prohibition against exports of Schedule 2 chemicals to States not Party to the CWC in 15 CFR 713.1(a). Currently, the CWCR prohibit imports of Schedule 2 chemicals from States not Party to the CWC, but do not prohibit Schedule 2 chemical exports to such countries. However, BIS notes that 15 CFR 742.18 currently requires a license for exports of Schedule 2 chemicals to States not Party to the CWC and BIS applies a general policy of denial to license applications for such exports. A license is also required for export of Schedule 2 chemicals controlled under the International Traffic in Arms Regulations (ITAR).

Proposed exemptions from Schedule 2 export and import prohibitions. This proposed rule would revise 15 CFR 713.1(b), which exempts certain mixtures containing Schedule 2 chemicals from the export and import prohibitions contained in proposed 15 CFR 713.1(a). Currently, 15 CFR 713.1(b) exempts mixtures containing 10 percent or less, by weight, of any single Schedule 2 chemical.

This proposed rule would revise 15 CFR 713.1(b) of the CWCR to exempt the following mixtures: (i) Mixtures containing 1 percent or less, by weight, of any single Schedule 2A or 2A* chemical; (ii) mixtures containing 10 percent or less, by weight, of any single Schedule 2B chemical; and (iii) products identified as consumer goods packaged for retail sale for personal use or packaged for individual use. However, BIS notes that the consumer goods exemption for mixtures that contain Schedule 2 chemicals identified under ECCN 1C350 on the Commerce Control List (CCL) (Supplement No. 1 to 15 CFR part 774) applies only to products identified as consumer goods not packaged for retail sale for personal use and not to products packaged for individual use (the latter are exempt only by the CWCR and not by the Australia Group controls under the Export Administration Regulations (EAR)).

Proposed removal and amendment of other provisions in 15 CFR 713.3. In addition, this proposed rule would, among other things: (i) amend the provisions providing guidance concerning amendments to declarations and reports (currently found in 15 CFR 713.7);; and (ii) provide a description of the procedures that BIS will follow concerning declarations and reports returned without action (RWA) in 15 CFR 713.6.

Proposed clarifications on Schedule 2 production activities. This proposed rule would move and revise 15 CFR 713.3 to 15 CFR 713.2 to clarify the scope of Schedule 2 production activities to include any associated processing steps of the Schedule 2 chemical and intermediates. Only transient intermediates would be exempted. This would ensure that the CWCR requirements would apply to Schedule 2 chemical production where Schedule 2 chemicals are below the applicable concentration threshold when reacted, but subsequently are concentrated above the threshold during in-line processing.

Amendments to Schedule 2 declarations and reports. The CWCR provisions on amended declarations and reports for Schedule 2 chemicals are proposed to be moved from 15 CFR 713.7 to 15 CFR 713.5 and would amend by clarifying and specifying deadlines for: (i) the types of changes to information on Schedule 2 chemicals and activities in the Annual Declaration of Past Activities or the combined declaration and report that would require submission of an amended declaration to BIS; (ii) the types of changes to export or import information in the Annual Reports on Exports and Imports from undeclared facilities, trading companies and U.S. persons that would require submission of an amended report to BIS; and (iii) the types of changes to Schedule 2 chemical facility information (e.g., change in company name, address, declaration point of contact, ownership) that would require submission of an amended declaration or report to BIS. In addition, this proposed rule would move and revise 15 CFR 713.6(d) to 15 CFR 713.5(d) to provide guidance concerning the submission of inspection-related amendments. Amended declarations, based on the final inspection report, would have to be submitted to BIS within 45 calendar days of the date of BIS' post inspection letter.

Certain Schedule 2 declarations and reports RWA. This proposed rule would add 15 CFR 713.6 to provide guidance concerning the return of certain Schedule 2 declarations and reports without action. BIS would RWA any Schedule 2 declarations or reports that are determined not required by the CWCR. The returned declaration or report would be accompanied by a cover letter explaining why the declaration or report is being RWA. BIS would retain a copy of the RWA letter, but would not maintain copies of any declarations or reports that were RWA.

(See ITT's Online Archives or 12/10/04 news, 04121035, for Part II of BP's summary of this proposed rule.)

- written comments due by 01/06/05

BIS proposed rule (FR Pub 12/07/04, D/N 990611158-4077-03) available at

http://a257.g.akamaitech.net/7/257/2422/06jun20041800/edocket.access.gpo.gov/2004/pdf/04-26517.pdf.