Chemical Weapons Convention Regulations, 24918-24970 [06-3747]

Agencies

• DEPARTMENT OF COMMERCE
• Bureau of Industry and Security
• Industry and Security Bureau

[Federal Register Volume 71, Number 81 (Thursday, April 27, 2006)]
[Rules and Regulations]
[Pages 24918-24970]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 06-3747]



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Part II





Department of Commerce





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Bureau of Industry and Security



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15 CFR Parts 711, 712 et al.



Chemical Weapons Convention Regulations; Final Rule

Federal Register / Vol. 71, No. 81 / Thursday, April 27, 2006 / Rules 
and Regulations

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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Parts 710, 711, 712, 713, 714, 715, 716, 717, 718, 719, 720, 
721, and 722

[Docket No. 990611158-5327-06]
RIN 0694-AB06


Chemical Weapons Convention Regulations

AGENCY: Bureau of Industry and Security, Commerce.

ACTION: Final rule.

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SUMMARY: On April 25, 1997, the United States ratified 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). The Bureau of Industry 
and Security (BIS) published an interim rule, on December 30, 1999, 
that established the Chemical Weapons Convention Regulations (CWCR) to 
implement the provisions of the CWC affecting U.S. industry and other 
U.S. persons. The CWCR include requirements to report certain 
activities, involving scheduled chemicals and unscheduled discrete 
organic chemicals, and to provide access for on-site verification by 
international inspectors of certain facilities and locations in the 
United States. This final rule updates the CWCR to remove outdated 
provisions and include additional requirements identified in the 
implementation of the CWC and by clarifying other CWC requirements.

DATES: This rule is effective April 27, 2006. Although there is no 
formal comment period, public comments on this regulation are welcome 
on a continuing basis.

ADDRESSES: You may submit comments, identified by RIN 0694-AB06, by any 
of the following methods:
     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments.
     E-mail: public.comments@bis.doc.gov. Include ``RIN 0694-
AB06'' in the subject line of the message.
     Fax: (202) 482-3355. Please alert the Regulatory Policy 
Division, by calling (202) 482-2440, if you are faxing comments.
     Mail or Hand Delivery/Courier: Willard Fisher, U.S. 
Department of Commerce, Bureau of Industry and Security, Regulatory 
Policy Division, 14th St. & Pennsylvania Avenue, NW., Room 2705, 
Washington, DC 20230, ATTN: RIN 0694-AB06.

FOR FURTHER INFORMATION CONTACT: For questions of a general or 
regulatory nature, contact the Regulatory Policy Division, telephone: 
(202) 482-2440. For program information on declarations, reports, 
advance notifications, chemical determinations, recordkeeping, 
inspections and facility agreements, contact the Treaty Compliance 
Division, Office of Nonproliferation and Treaty Compliance, telephone: 
(703) 605-4400; for legal questions, contact Rochelle Woodard, Office 
of the Chief Counsel for Industry and Security, telephone: (202) 482-
5301.

SUPPLEMENTARY INFORMATION:

Background

I. Summary of CWCR Changes Contained in This Final Rule

    On April 25, 1997, the United States ratified the Convention on the 
Development, Production, Stockpiling and Use of Chemical Weapons and on 
Their Destruction, also known as the Chemical Weapons Convention (CWC 
or Convention). The CWC, which entered into force on April 29, 1997, is 
an arms control treaty with significant nonproliferation aspects. As 
such, the CWC bans the development, production, stockpiling or use of 
chemical weapons and prohibits States Parties to the CWC from assisting 
or encouraging anyone to engage in a prohibited activity. The CWC 
provides for declaration and inspection of all States Parties' chemical 
weapons and chemical weapon production facilities, and oversees the 
destruction of such weapons and facilities. To fulfill its arms control 
and nonproliferation objectives, the CWC also establishes a 
comprehensive verification scheme and requires the declaration and 
inspection of facilities that produce, process or consume certain 
``scheduled'' chemicals and unscheduled discrete organic chemicals, 
many of which have significant commercial applications. The CWC also 
requires States Parties to report exports and imports and to impose 
export and import restrictions on certain chemicals. These requirements 
apply to all entities under the jurisdiction and control of States 
Parties, including commercial entities and individuals. States Parties 
to the CWC, including the United States, have agreed to this 
verification scheme in order to provide transparency and to ensure that 
no State Party to the CWC is engaging in prohibited activities.
    The Chemical Weapons Convention Implementation Act of 1998 (the Act 
or CWCIA) (22 U.S.C. 6701 et seq.), enacted on October 21, 1998, 
authorizes the United States to require the U.S. chemical industry and 
other private entities to submit declarations, notifications and other 
reports and also to provide access for on-site inspections conducted by 
inspectors sent by the Organization for the Prohibition of Chemical 
Weapons. Executive Order (E.O.) 13128 delegates authority to the 
Department of Commerce to promulgate regulations, obtain and execute 
warrants, provide assistance to certain facilities, and carry out 
appropriate functions to implement the CWC, consistent with the Act. 
The Department of Commerce implements CWC import restrictions under the 
authority of the International Emergency Economic Powers Act, the 
National Emergencies Act, and E.O. 12938, as amended by E.O. 13128. The 
Departments of State and Commerce have implemented the CWC export 
restrictions under their respective export control authorities. E.O. 
13128 designates the Department of State as the United States National 
Authority (USNA) for purposes of the CWC and the Act.
    On December 30, 1999, the Bureau of Industry and Security (BIS), 
U.S. Department of Commerce, published an interim rule that established 
the Chemical Weapons Convention Regulations (CWCR) (15 CFR Parts 710-
722). The CWCR implemented the provisions of the CWC, affecting U.S. 
industry and U.S. persons, in accordance with the provisions of the 
Act. This final rule revises the CWCR by updating them to remove 
outdated provisions (e.g., the initial declaration requirements in 
parts 713, 714, and 715) and include additional requirements identified 
as necessary for the implementation of the CWC provisions and by 
clarifying other CWC requirements. The changes made by this rule were 
addressed in a proposed rule and request for public comments that BIS 
published on December 7, 2004.
    Specifically, this final rule makes the following revisions to the 
CWCR:
A. Revisions to Section 710.1 of the CWCR (Definitions of Terms Used in 
the CWCR)
    This rule revises Sec.  710.1 of the CWCR by amending the 
definition of ``domestic transfer'' to clarify that the term, as 
applied to the declaration requirements for Schedule 2 or Schedule 3 
chemicals under the CWCR, means the movement of a Schedule 2 or 
Schedule 3 chemical, in quantities and concentrations greater than the 
specified thresholds under the convention, outside the geographical 
boundary of a facility in the United

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States to another destination in the United States, for any purpose.
    This rule adds a definition for the term ``intermediate'' to Sec.  
710.1 of the CWCR in order to clarify the use of that term in Sec.  
712.5(d) and Supplement No. 2 to part 715 of the CWCR. Section 710.1 of 
the CWCR is amended to define ``intermediate'' as ``a chemical formed 
through chemical reaction that is subsequently reacted to form another 
chemical.'' The definition of ``intermediate'' also clarifies its use 
in Sec. Sec.  712.5(d), 713.2(a)(2)(ii) and 714.1(a)(2)(ii), whereby 
Schedule 1, Schedule 2 and Schedule 3 chemicals that are intermediates, 
but not transient intermediates, must be considered when determining if 
a chemical is subject to declaration. Lastly, Supplement No. 2 to part 
715 of the CWCR, which provides examples of unscheduled discrete 
organic chemicals (UDOCs) and UDOC production, indicates that 
intermediate UDOCs used in a single or multi-step process to produce 
another declared UDOC are not subject to declaration requirements under 
the CWCR.
    In addition, this rule adds a definition of the term ``advance 
notification'' to Sec.  710.1 of the CWCR to clarify the use of that 
term in part 712 of the CWCR. Section 710.1 of the CWCR defines 
``advance notification'' to mean ``a notice informing BIS of a 
company's intention to export to or import from a State Party a 
Schedule 1 chemical.'' Advance notifications must be submitted to BIS 
at least 45 days prior to the proposed export or import, except for 
exports or imports of 5 milligrams or less of saxitoxin for medical/
diagnostic purposes which may be submitted to BIS at least 3 days prior 
to export or import. The definition contained in this rule also 
indicates that this notification requirement is in addition to any 
export license requirement under the Export Administration Regulations 
(EAR) (15 CFR Parts 730-799) or the International Traffic in Arms 
Regulations (ITAR) (22 CFR Parts 120-130), or import license 
requirement under the Alcohol, Tobacco, Firearms and Explosives 
Regulations (27 CFR part 447).
    The definition of the term ``production'' in Sec.  710.1 of the 
CWCR is revised by adding certain notes that incorporate decisions by 
the Organization for the Prohibition of Chemical Weapons' Conference of 
the States Parties (OPCW/CSP) regarding the production of Schedule 1, 
2, and 3 chemicals. The first note clarifies that the production of 
Schedule 1 chemicals includes ``formation through chemical synthesis as 
well as processing to extract and isolate Schedule 1 chemicals.'' The 
second note clarifies that the ``production'' of a Schedule 2 or 
Schedule 3 chemical ``means all steps in the production of a chemical 
in any units within the same plant through chemical reaction, including 
any associated processes (e.g., purification, separation, extraction, 
distillation, or refining) in which the chemical is not converted into 
another chemical. The exact nature of any associated process (e.g., 
purification, etc.) is not required to be declared.''
    This rule adds a definition of the term ``production by synthesis'' 
in Sec.  710.1 of the CWCR to clarify the use of the term in Sec.  
715.1 of the CWCR (i.e., declaration of production by synthesis of 
UDOCs for purposes not prohibited by the CWC) and Supplement No. 2 to 
part 715 of the CWCR (i.e., examples of activities that are not 
considered to be production by synthesis under part 715 of the CWCR). 
Section 710.1 of the CWCR defines ``production by synthesis'' to mean 
``production of a chemical from its reactants.'' This definition 
replaces the definition of the term ``synthesis'' in Sec.  710.1 of the 
CWCR. In addition, a new Supplement No. 2 is added to Part 710 of the 
CWCR to define the types of production covered under the CWCR.
    This rule also amends Sec.  710.1 of the CWCR to add a definition 
of the term ``protective purposes,'' as it relates to Schedule 1 
chemicals, stating that protective purposes means any purpose directly 
related to protection against toxic chemicals and to protection against 
chemical weapons.
    Finally, this rule amends Sec.  710.1 of the CWCR by adding a 
definition of the term ``transient intermediate'' in order to clarify 
the scope of the declaration requirements that apply to the production 
of certain scheduled chemicals. Section 710.1 of the CWCR defines the 
term ``transient intermediate'' to mean ``any chemical that is produced 
in a chemical process, but that only exists for a very short period of 
time and cannot be isolated, even by modifying or dismantling the 
plant, altering the chemical production process operating conditions, 
or stopping the chemical production process altogether.''
B. Amendments to Section 710.2 of the CWCR (Scope of the CWCR)
    This rule amends Sec.  710.2(a) of the CWCR by removing the phrase 
``The CWCR declaration, reporting, and inspection requirements apply * 
* *'' from that paragraph. Removal of this phrase clarifies which 
persons and facilities are generally subject to the provisions of the 
CWCR.
C. Amendments to Section 710.6 of the CWCR (Relationship Between the 
CWCR and the Export Administration Regulations)
    This rule amends Sec.  710.6 of the CWCR to include a reference to 
Export Control Classification Number (ECCN) 1C395 on the Commerce 
Control List (CCL), which is in Supplement No. 1 to part 774 of the 
EAR. ECCN 1C395 controls the following items: (i) mixtures that contain 
more than 10 percent, but less than 30 percent, by weight of any single 
CWC Schedule 2 chemical identified in ECCN 1C350.b and (ii) certain 
medical, analytical, diagnostic and food testing kits that contain CWC 
Schedule 2 or Schedule 3 chemicals controlled by ECCN 1C350.b or .c, 
respectively, in an amount not exceeding 300 grams per chemical.
D. Amendments to Supplement No. 1 to Part 710 of the CWCR (List of 
States Parties to the CWC)
    This rule amends Supplement No. 1 to part 710 of the CWCR (States 
Parties to the Convention on The Prohibition of The Development, 
Production, Stockpiling, and Use of Chemical Weapons and on Their 
Destruction) by updating the list of States Parties to include the 
following recent additions: Afghanistan, Andorra, Antigua and Barbuda, 
Azerbaijan, Belize, Bhutan, Cambodia, Cape Verde, Chad, Colombia, 
Democratic Republic of the Congo, Djibouti, Dominica, Eritrea, Gabon, 
Grenada, Guatemala, Haiti, Honduras, Jamaica, Kazakhstan, Kiribati, 
Kyrgyzstan, Liberia, Libya, Madagascar, Malaysia, Marshall Islands, 
Micronesia (Federated States of), Mozambique, Nauru, Niue, Palau, 
Rwanda, Saint Kitts and Nevis, Saint Vincent and the Grenadines, Samoa, 
San Marino, Sao Tome and Principe, Serbia and Montenegro, Sierra Leone, 
Solomon Islands, Thailand, Timor Leste, Tonga, Tuvalu, Uganda, United 
Arab Emirates, Vanuatu, Yemen, and Zambia. As of March 25, 2006, 178 
countries had become States Parties to the CWC.
E. Amendments to Part 711 of the CWCR (General Information Regarding 
Declaration, Reporting and Advance Notification Requirements)
    This rule adds a new Sec.  711.3 that establishes BIS's authority 
to contact any company to determine whether it is in compliance with 
the CWCR. Information requested may relate to the production, 
processing, consumption, export, import, or other activities involving 
scheduled chemicals and UDOCs described in Parts 712 through 715 of the 
CWCR. Any person or facility

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subject to the CWCR and receiving such a request for information will 
be required to provide a response to BIS within the time-frame 
specified in the request. However, this requirement does not, in 
itself, impose a requirement to create new records or maintain existing 
records.
    This rule amends Sec.  711.3 of the CWCR by moving it to Sec.  
711.4 and specifying a time period within which BIS will respond to 
chemical determination requests. BIS will respond, in writing, to a 
chemical determination request within 10 working days of receipt of the 
request.
    This rule removes the declaration and reporting requirements in 
Sec.  711.4 of the CWCR concerning activities that occurred prior to 
December 30, 1999, since these requirements should already have been 
satisfied. A new Sec.  711.7 is added to provide information on where 
to submit declarations, advance notifications, and reports.
    This rule also adds a new Sec.  711.8 that contains instructions 
for applying for authorization to submit electronic declarations and 
reports through the Web-Data Entry System for Industry (WebDESI). This 
electronic submission procedure fulfills the requirements of the 
Government Paperwork Elimination Act (44 U.S.C. 3504).
F. Amendments to Part 712 of the CWCR (Activities Involving Schedule 1 
Chemicals)
    This rule adds a new Sec.  712.2(a) that prohibits the production 
of Schedule 1 chemicals for protective purposes, as defined in Sec.  
710.1 of the CWCR. This change is consistent with the provisions in 
Part VI of the CWC Annex on Implementation and Verification (the 
``Verification Annex'') that describe production activities not 
prohibited under the CWC. These provisions restrict production of 
Schedule 1 chemicals for protective purposes to a single small-scale 
facility approved by the State Party and one facility outside of a 
single small-scale facility, which also must be approved by the State 
Party. The only two facilities in the United States authorized to 
produce Schedule 1 chemicals for protective purposes are owned and 
operated by the U.S. Department of Defense--these facilities are not 
subject to the CWCR, pursuant to Sec.  710.2(a)(1)(i). Therefore, all 
facilities subject to the CWCR are prohibited from producing Schedule 1 
chemicals for protective purposes.
    This rule also clarifies that initial declarations submitted in 
February 2000 remain valid until they are either amended or rescinded. 
If you plan to alter the technical layout of your declared facility, 
you must submit an amended declaration to BIS at least 200 calendar 
days prior to making any such change to your facility.
    This rule revises Sec.  712.3 of the CWCR by moving the annual 
declaration requirements for Schedule 1 facilities to new Sec.  712.5.
    This rule amends Sec.  712.4 of the CWCR to clarify the declaration 
requirements that apply to the establishment of new Schedule 1 chemical 
production facilities. If a Schedule 1 chemical production facility has 
never been declared in a previous calendar year or its initial 
declaration has been withdrawn in accordance with the requirements of 
amended Sec.  712.5(g) of this rule, you must submit an initial 
declaration (including a current detailed technical description of the 
facility) to BIS at least 200 calendar days prior to commencing 
production of Schedule 1 chemicals at the facility in quantities 
greater than 100 grams aggregate per year. Such facilities are 
considered to be ``new Schedule 1 chemical production facilities'' and 
are subject to an initial inspection within 200 calendar days of the 
submission of the initial declaration to BIS.
    This rule revises the remainder of part 712 of the CWCR, as 
follows: (1) Advance notification and annual report requirements for 
Schedule 1 chemical exports and imports are moved from Sec.  712.5 of 
the CWCR to Sec.  712.6; (2) provisions for Table 1 to Sec.  712.6 of 
the CWCR are moved to new Supplement No. 2 to part 712 of the CWCR; (3) 
procedures concerning declarations and reports returned without action 
by BIS are described in new Sec.  712.8 of the CWCR; and (4) the due 
date for Annual Declarations for Anticipated Activities is changed from 
August 3 to September 3, thereby giving Schedule 1 facilities an 
additional 30 days in which to complete and submit their declarations.
    This rule amends the CWCR provisions that require advance 
notification of exports and imports of Schedule 1 chemicals by 
establishing an exception to the requirement that BIS must be notified 
at least 45 calendar days prior to the export or import of a Schedule 1 
chemical to or from another State Party. Advance notification of the 
export or import of 5 milligrams or less of Saxitoxin--B(7), which is 
listed in Supplement No. 1 to part 712 of the CWCR, for medical or 
diagnostic purposes only, must be submitted to BIS at least 3 calendar 
days (rather than 45 calendar days) prior to the date of export or 
import.
    This rule amends the CWCR provisions concerning requirements for 
amending Schedule 1 declarations and reports. Section 712.7 of the CWCR 
is amended by clarifying and specifying deadlines for: (1) The types of 
changes to information on Schedule 1 chemicals and activities in the 
Annual Declaration of Past Activities that would require submission of 
an amended declaration to BIS; (2) 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 (3) the types of 
changes to Schedule 1 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 rule adds a new Sec.  712.7(d) to the CWCR that provides 
guidance concerning the submission of inspection-related amendments. 
Amended declarations, based on the final inspection report, must be 
submitted to BIS within 45 calendar days of the date of BIS's post-
inspection letter.
    This rule adds a new Sec.  712.8 to the CWCR that provides guidance 
concerning certain Schedule 1 declarations and reports that are 
returned without action. In these cases, BIS would return without 
action (RWA) any Schedule 1 declarations or reports that are determined 
to be 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 returned without action. BIS would retain a copy of 
the RWA letter, but would not maintain copies of any declarations or 
reports that were returned without action.
    Finally, the provisions previously contained in Sec.  712.6 and 
Table 1 to Sec.  712.6 of the CWCR, which provided information on the 
deadlines for submitting Schedule 1 declarations, reports, advance 
notifications and amendments to BIS, are updated and moved to new Sec.  
712.9 and new Supplement No. 2 to part 712 of the CWCR, respectively.
G. Amendments to Part 713 of the CWCR (Activities Involving Schedule 2 
Chemicals)
    This rule adds a prohibition against exports of Schedule 2 
chemicals to States not Party to the CWC in Sec.  713.1(a). Prior to 
the publication of this rule, the CWCR prohibited imports of Schedule 2 
chemicals from States not Party to the CWC, but did not prohibit 
exports of Schedule 2 chemicals to such countries. Section 742.18 of 
the EAR requires a license to export Schedule 2

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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 to export Schedule 2 chemicals that are controlled under 
the ITAR.
    This rule revises Sec.  713.1(b), which exempts certain mixtures 
containing Schedule 2 chemicals from the export and import prohibitions 
contained in Sec.  713.1(a) of the CWCR, as amended by this rule. Prior 
to the publication of this rule, Section 713.1(b) of the CWCR exempted 
mixtures containing 10 percent or less, by weight, of any single 
Schedule 2 chemical. This rule revises Sec.  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, note that the consumer goods exemption for mixtures that 
contain Schedule 2 chemicals identified under ECCN 1C350 on the CCL 
(Supplement No. 1 to part 774 of the EAR) applies only to products 
identified as consumer goods 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 
EAR).
    In addition, this rule: (i) Removes the provisions concerning 
declarations on past production of Schedule 2 chemicals for chemical 
weapons purposes (previously found in Sec.  713.2 of the CWCR); (ii) 
removes the provisions concerning Schedule 2 initial declarations and 
initial reports on exports and imports (previously found in Sec. Sec.  
713.3(a)(1)(i) and 713.4(c)(1) and (c)(2) of the CWCR); (iii) amends 
the provisions providing guidance concerning amendments to declarations 
and reports (previously found in Sec.  713.7 of the CWCR); (iv) moves 
the provisions concerning the frequency and timing of declarations and 
reports (previously found in Sec.  713.6 of the CWCR) to Sec.  713.7; 
and (v) provides a description of the procedures that BIS will follow 
concerning declarations and reports RWA'd in Sec.  713.6 of the CWCR.
    This rule moves the Schedule 2 chemical annual declaration 
requirements previously described in Sec.  713.3 of the CWCR to Sec.  
713.2 and amends this section to clarify that the scope of Schedule 2 
production activities includes any associated processing steps of the 
Schedule 2 chemical and intermediates. Only transient intermediates are 
exempted. This clarification will ensure that the CWCR requirements 
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.
    The provisions previously included in Sec.  713.6 and Table 1 to 
Sec.  713.6 of the CWCR, which contained information on the deadlines 
for submitting declarations, reports, advance notifications, and 
amendments to BIS, are moved to Sec.  713.7 and new Supplement No. 2 to 
part 713 of the CWCR, respectively. In addition, the CWCR provisions on 
amended declarations and reports for Schedule 2 chemicals are moved 
from Sec.  713.7 of the CWCR to Sec.  713.5 and amended 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. This rule also moves Sec.  713.6(d) of 
the CWCR to Sec.  713.5(d) and revises it to provide guidance 
concerning the submission of inspection-related amendments. Amended 
declarations, based on the final inspection report, must be submitted 
to BIS within 45 calendar days of the date of BIS's post-inspection 
letter.
    This rule amends Sec.  713.6 of the CWCR to provide information 
concerning the return of certain Schedule 2 declarations and reports 
without action. BIS will RWA (Return Without Action) any Schedule 2 
declarations or reports that are determined not to be required by the 
CWCR. The returned declaration or report will be accompanied by a cover 
letter explaining why the declaration or report is being returned 
without action. BIS will retain a copy of the RWA letter, but will not 
maintain copies of any declarations or reports that are returned 
without action.
    Finally, the provisions previously contained in Sec.  713.6 and 
Table 1 to Sec.  713.6 of the CWCR, which provided information on the 
deadlines for submitting Schedule 2 declarations, reports, and 
amendments to BIS, are updated and moved to Sec.  713.7 and Supplement 
No. 2 to part 713 of the CWCR, respectively.
H. Amendments to Part 714 of the CWCR (Activities Involving Schedule 3 
Chemicals)
    This rule amends Sec.  714.1 of the CWCR by removing the provisions 
that addressed the past production of Schedule 3 chemicals. This 
section now contains the annual declaration requirements for Schedule 3 
chemicals that were previously described in Sec.  714.2 of the CWCR. 
This section clarifies the scope of Schedule 3 production activities, 
as defined by the CWCR, to include any associated processing steps of a 
Schedule 3 chemical and intermediates. Only transient intermediates are 
exempted. This ensures that the CWCR requirements apply to Schedule 3 
chemical production where Schedule 3 chemicals are below the applicable 
concentration threshold when reacted, but subsequently are concentrated 
above the threshold during processing.
    Section 714.1 of the CWCR is also amended to clarify the procedures 
that must be followed when determining the range of Schedule 3 chemical 
production for your plant site during the previous calendar year. 
Specifically, this rule includes a statement in Sec.  714.1(c)(1) of 
the CWCR to indicate that you should not aggregate amounts of 
production from plants on your plant site that did not individually 
produce a Schedule 3 chemical in an amount exceeding the applicable 
declaration threshold (i.e., greater than 30 metric tons). In short, 
only the production amounts from those plants on your plant site that 
individually produced greater than 30 metric tons of a Schedule 3 
chemical should be aggregated for the purpose of calculating the total 
amount of a Schedule 3 chemical produced at your plant site during the 
previous calendar year.
    This rule also amends Sec.  714.2 of the CWCR by removing outdated 
Schedule 3 initial declaration and reporting requirements and by 
including the annual reporting requirements for exports and imports of 
Schedule 3 chemicals that were previously described in Section 714.3 of 
the CWCR. Section 714.3 of the CWCR is amended to include the advance 
declaration requirements for additionally planned production of 
Schedule 3 chemicals that were previously described in Sec.  714.4 of 
the CWCR.
    In addition, this rule amends Section 714.4 of the CWCR to include 
the

[[Page 24922]]

requirements for amending Schedule 3 declarations and reports that were 
previously described in Sec.  714.6 of the CWCR. This section is also 
amended to clarify and specify the deadlines for: (i) The types of 
changes to information on Schedule 3 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 3 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 rule 
amends the CWCR to provide guidance in Sec.  714.4(d) concerning the 
submission of inspection-related amendments. Amended declarations, 
based on the final inspection report, must be submitted to BIS within 
45 calendar days of the date of BIS's post-inspection letter.
    This rule amends Sec.  714.5 of the CWCR to provide information 
concerning the return of certain Schedule 3 declarations and reports 
without action. BIS will RWA (Return Without Action) any Schedule 3 
declarations or reports that are determined not to be required by the 
CWCR. The returned declaration or report will be accompanied by a cover 
letter explaining why the declaration or report is being returned 
without action. BIS will retain a copy of the RWA letter, but will not 
maintain copies of any declarations or reports that are returned 
without action.
    Finally, this rule amends Sec.  714.6 of the CWCR and adds a new 
Supplement No. 2 to part 714 of the CWCR to provide updated information 
on the deadlines for submitting Schedule 3 declarations, reports, and 
amendments to BIS. Information on the deadlines for submitting Schedule 
3 declarations and reports was previously provided in Sec.  714.5 and 
Table 1 to Sec.  714.5 of the CWCR.
I. Amendments to Part 715 of the CWCR (Activities Involving Unscheduled 
Discrete Organic Chemicals (UDOCs))
    This rule amends Sec.  715.1(a)(1)(ii) (which describes the annual 
declaration requirements for the production of UDOCs containing the 
elements phosphorus, sulfur or fluorine, referred to as ``PSF 
chemicals'') to clarify how to calculate the production by synthesis of 
PSF chemicals at your plant site during the previous calendar year. 
Specifically, this rule indicates that, when determining the quantity 
of each PSF chemical produced by a PSF plant on your plant site, you 
should only aggregate the PSF chemical production quantities from 
plants that individually produced a PSF chemical in an amount exceeding 
30 metric tons. However, note that Sec.  715.1(a)(1)(i) indicates that, 
when determining UDOC production by synthesis on your plant site, you 
should aggregate all quantities of UDOCs and PSF chemicals produced, 
regardless of the amount of PSF chemicals produced (i.e., aggregate any 
PSF chemicals produced).
    This rule also revises Sec.  715.1(b)(1) of the CWCR by removing 
the initial declaration requirement and replacing it with the annual 
declaration requirement and adding a new subsection that provides for a 
new form called the ``No Changes Authorization'' form. This form may be 
submitted to BIS if there are no updates or changes to any information 
(other than the certifying official and dates signed and submitted) 
contained in the annual declaration on past activities previously 
submitted by your plant site. Section Sec.  715.1(b)(2) of the CWCR 
also indicates that, when you submit a ``No Changes Authorization'' 
form to BIS, your plant site's UDOC activities will continue to be 
declared to the OPCW and your plant site will remain subject to 
inspection (if applicable) based upon the data reported in your 
previous (i.e., most recent) annual declaration on past activities.
    This rule amends Sec.  715.2 of the CWCR to include requirements 
for amending UDOC declarations--these requirements were previously 
described in Sec.  715.3 of the CWCR. This section is also amended by 
clarifying or specifying the deadlines for: (i) The types of changes to 
information on UDOCs and activities in the Annual Declaration of Past 
Activities that would require submission of an amended declaration to 
BIS and (ii) the types of changes to UDOC plant information (e.g., 
change in company name, address, declaration point of contact, 
ownership) that would require submission of an amended declaration to 
BIS. In addition, this rule amends the CWCR to provide guidance in 
Sec.  715.2(c) concerning the submission of inspection-related 
amendments. Amended declarations, based on the final inspection report, 
must be submitted to BIS within 45 calendar days of the receipt of 
BIS's post-inspection letter.
    This rule amends Sec.  715.3 of the CWCR to provide information 
concerning the return of certain UDOC declarations without action. BIS 
will RWA any UDOC declarations that are determined not to be required 
by the CWCR. The returned declaration will be accompanied by a cover 
letter explaining why the declaration is being returned without action. 
BIS will retain a copy of the RWA letter, but will not maintain copies 
of any declarations that are returned without action.
    Finally, this rule amends part 715 of the CWCR by adding a new 
Sec.  715.4 and a new Supplement No. 3 to part 715 to provide updated 
information on the deadlines for submitting UDOC declarations and 
amendments to BIS. Information on the deadlines for submitting UDOC 
declarations was previously provided in Sec.  715.2 and Table 1 to 
Sec.  715.2 of the CWCR.
J. Amendments to Part 716 of the CWCR (Initial and Routine Inspections 
of Declared Facilities)
    As part of their obligation under the Convention, each State Party 
to the CWC is subject to inspection of its chemical facilities engaged 
in certain activities involving scheduled chemicals. Part 716 of the 
CWCR provides general information about the conduct of initial and 
routine inspections of declared facilities subject to inspection under 
CWC Verification Annex Part VI (E), Part VII (B), Part VIII(B), and 
Part IX(B).
    This rule amends Sec.  716.2(a)(2)(i) of the CWCR to clarify that a 
facility agreement will be concluded by the U.S. National Authority (in 
coordination with BIS) with the OPCW before a new Schedule 1 facility, 
declared pursuant to Sec.  712.4 of the CWCR, can produce above 
threshold.
    This rule amends Sec.  716.4(b)(1) of the CWCR to clarify the scope 
of inspections by specifying that inspections under part 716 of the 
CWCR may include visual inspection of parts or areas of the plant site, 
in addition to the facilities or plants producing scheduled chemicals, 
in order to address any ambiguity that might arise during the 
inspection. In addition, photographs may be taken and formal interviews 
of facility personnel may be conducted. The Host Team Leader is 
responsible, as described in Section 716.4(b)(2) of the CWCR, for 
determining whether the Inspection Team's request to inspect any area, 
building, item or record is reasonable--such determinations are made on 
the basis of treaty requirements. Verification activities under the 
CWCR are carried out at declared plant sites--access to other parts of 
a plant site will be provided in a manner sufficient to

[[Page 24923]]

clarify for the Inspection Team any ambiguities that arise during an 
inspection and in accordance with the facility agreement.
    Section 716.4(b)(3) of the CWCR is amended to indicate that: (i) 
Technology subject to the ITAR shall not be divulged to the Inspection 
Team without U.S. Government authorization and (ii) each facility that 
is inspected is responsible for identifying ITAR-controlled technology 
to the BIS Host Team, if known. The extent to which ITAR controls the 
transfer of technology to foreign nationals is not affected by the 
CWCR--all inspection-related activities conducted under the CWCR must 
comply with any applicable ITAR requirements.
    This rule also clarifies the pre-inspection briefing requirements 
described in Sec.  716.4(c) of the CWCR and the requirements in Sec.  
716.4(e) of the CWCR concerning the availability of records. The U.S. 
facility must provide the Inspection Team and the U.S. Government Host 
Team with appropriate accommodations in which to review relevant 
documents and must ensure that all relevant information will be 
available to the teams. In addition, this rule provides that, whenever 
the current owner of a declared facility does not have access to 
records for activities that took place under a previous owner of the 
facility, because such records were not transferred to the current 
owner of the facility by the previous owner (e.g., as part of the 
contract involving the sale of the facility), the previous owner must 
make such records available to the Host Team (for provision to the 
Inspection Team). However, the current owner of a facility, upon 
receiving notification of an inspection, is responsible for informing 
BIS if the previous owner did not transfer records for activities that 
took place under the previous ownership--this will allow BIS to contact 
the previous owner of the facility, to arrange for access to such 
records, if BIS deems them relevant to the inspection activities.
    Section 716.7 of the CWCR, which described requirements concerning 
the provisions of samples by declared facilities, is revised to 
restrict the analysis of such samples of the verification of the 
absence of undeclared scheduled chemicals, unless otherwise agreed 
after consultation with the facility representative.
    In addition, this rule adds a new Sec.  716.10 to clarify that, 
upon receipt of the final inspection report from the OPCW, BIS will 
send a copy of the final inspection report to the facility for its 
review. Facilities may submit comments on the final inspection report 
to BIS, and BIS will consider those comments, to the extent possible, 
when commenting on the final report. BIS will also send facilities a 
post-inspection letter with instructions based on decisions made during 
the inspection.
    Finally, this rule removes and reserves Supplement Nos. 2 and 3 of 
Part 716 of the CWCR, which included the model facility agreement for 
Schedule 1 chemicals and Schedule 2 chemicals, respectively.
K. Amendments to Part 717 of the CWCR (CWC Clarification Procedures: 
Consultations and Challenge Inspections)
    Article IX of the CWC contains procedures for States Parties to 
clarify issues concerning compliance with the CWC. A State Party may 
request the OPCW to conduct an on-site challenge inspection of any 
facility or location in the territory or in any other place under the 
jurisdiction or control of any other State Party. A challenge 
inspection may be conducted solely for the purpose of clarifying and 
resolving any questions concerning possible non-compliance with the 
CWC.
    This rule amends Sec.  717.1(b) of the CWCR to clarify that BIS 
will attempt to contact a person or facility that is subject to the 
Article IX clarification procedures as early as practicable, prior to 
issuing an official written request for clarification, and that such 
person or facility must provide the information required by BIS, 
pursuant to an Article IX clarification request, within five working 
days of the receipt of BIS's written request for clarification.
    In addition, this rule amends Sec.  717.2 (Challenge Inspections) 
by adding a new provision in Sec.  717.2(b)(2)(ii) explaining that, if 
consent is not granted within four hours of a facility's receipt of 
BIS's inspection notification, BIS will assist the Department of 
Justice in seeking a criminal warrant. Another new provision, i.e., 
Sec.  717.2(d)(5), is added to describe the requirements concerning 
pre-inspection briefings for challenge inspections. Section 717.2(d)(5) 
requires that, prior to the commencement of the challenge inspection, 
facility representatives must provide the Inspection Team and Host Team 
with a pre-inspection briefing on the facility that will include the 
following: (i) The types of activities being conducted at the facility 
(e.g., business and manufacturing operations); (ii) safety procedures 
that must be followed during the inspection; and (iii) administrative 
and logistical arrangements necessary to facilitate the inspection.
    Section 717.3 of the CWCR, which describes requirements concerning 
the provision of samples by declared facilities, is revised to restrict 
analysis of samples to verifying the presence or absence of scheduled 
chemicals or appropriate degradation products, unless agreed otherwise.
    Finally, this rule adds a new Sec.  717.5 to clarify that, upon 
receipt of the final inspection report from the OPCW, BIS will forward 
a copy to the facility, for comment, and will give consideration to the 
facility's comments prior to responding to the OPCW via the U.S. 
National Authority. In addition, Section 717.5 provides that, upon 
receipt of the final inspection report, BIS will send the facility a 
post-inspection letter detailing the issues that require follow-up 
action.
L. Amendments to Part 719 of the CWCR (Enforcement)
    This rule amends part 719 of the CWCR to clarify that the scope of 
violations under the Chemical Weapons Convention Implementation Act 
(the Act) includes willfully failing or refusing to permit access to or 
copying of ``any record'' required to be established or maintained by 
the Act or the CWCR--not just those records exempt from disclosure 
under the Act or the CWCR, as previously stated in section 
719.2(a)(2)(iii) of the CWCR. In addition, this rule amends the civil 
and criminal penalty provisions in sections 719.2(b)(2) and 719.2(c), 
respectively, to make the same clarification, with respect to the 
penalties that may be assessed for violations of the recordkeeping 
requirements in the Act or the CWCR.
M. Amendments to Part 721 of the CWCR (Inspection of Records and 
Recordkeeping)
    This rule amends part 721 of the CWCR to clarify the circumstances 
under which the previous owner of a declared facility must retain 
supporting materials and documentation in accordance with the 
requirements of section 721.2. Specifically, section 721.2(a) is 
amended to clarify that, if a declared facility is sold, the previous 
owner of the facility must retain all supporting materials and 
documentation that were not transferred to the current owner of the 
facility (e.g., as part of the contract involving the sale of the 
facility); otherwise, the current owner of the facility is responsible 
for retaining such supporting materials and documentation. Whenever the 
previous owner of a declared facility retains such supporting materials 
and documentation, the owner must inform

[[Page 24924]]

BIS of any subsequent change in address or other contact information, 
so that BIS will be able to contact the previous owner of the facility, 
to arrange for access to such records, if BIS deems them relevant to 
inspection activities involving the facility.

II. Summary of Public Comments on the December 7, 2004, Proposed CWCR 
Rule

    On December 7, 2004, BIS published a rule in the Federal Register 
(69 FR 70754), with a request for comments, that proposed amendments to 
the CWCR to update the CWCR (by adding new requirements identified 
since the implementation of the CWC) and clarify certain other CWC 
requirements. BIS received comments from five respondents. Following is 
a summary of those comments, along with BIS's responses. The comments 
are organized by regulatory section, with similar comments grouped 
under the same section heading.
A. Section 710.1 ``Definitions of Terms Used in the Chemical Weapons 
Convention Regulations (CWCR)''
    Comments: One respondent questioned the definition of ``production 
by synthesis'' set forth in the regulation. The respondent stated that, 
``Production by synthesis means production of a chemical that is 
isolated for use or sale.'' The respondent further stated that, 
``'synthesis'' chemically means production of a chemical from its 
reactants. (See Wikipedia, ``Chemical Synthesis,'' https://
en.wikipedia.org/wiki/Chemical_synthesis). It is distinguished by 
production of a saleable product by another means, such as processing 
or biological mediation.'' The respondent suggested that, perhaps, BIS 
omitted a definition or inappropriately transposed the order of the 
definitions of ``production'' and ``production by synthesis.'' The 
respondent stated that the definition of synthesis, in any case, has a 
``very specific connotation under the CWC; e.g., UDOCs have to be 
`produced by synthesis' (Verification Annex, Part IX, A.1.(b))'' and 
that this ``connotation'' is not reflected in the revised regulation.
    Response: The definition of ``production by synthesis'' has been 
revised in this final rule to mean ``production of a chemical from its 
reactants.'' This definition is consistent with language used in the 
interim CWCR, which has been applied since the CWC entered into force 
in the United States and has been deemed consistent with CWC 
requirements through application and practice. Note that Section 
715.1(a)(2) of the CWCR establishes criteria for UDOCs produced by 
synthesis that have been isolated for use or sale as a specific end 
product.
B. Section 711.3 ``Compliance Review''
    Comments: Two respondents noted that they believe BIS already had 
the authority to conduct compliance reviews under the CWCR. They 
acknowledged the need for the compliance review element, but suggested 
that BIS provide companies 30 days to respond to requests for 
information under new Section 711.3 of the CWCR.
    Response: BIS's objective has been, and will continue to be, to 
minimize the burden of companies to comply with the CWCR, while at the 
same time ensuring that individual companies and the United States 
comply with the terms of the CWC and the CWC Implementation Act. In 
response to comments received, BIS has revised the regulation to state 
that, if BIS makes a request pursuant to new Section 711.3 of the CWCR, 
BIS will provide companies 30 days to respond to such request.
    Comments: One respondent stated that those companies, which have 
some sites that are subject to declaration requirements under the CWCR 
and other sites that are not, should not be required to keep records 
that substantiate activities at an undeclared site for purposes of 
compliance.
    Response: Section 711.3 of the CWCR does not require companies to 
maintain records other than those they would normally maintain, 
pursuant to regular business practices or pursuant to applicable CWCR 
requirements.
C. Section 714.4(a) ``Changes to Information That Directly Affects a 
Declared [Schedule 3] Plant Site's Annual Declaration of Past 
Activities or Combined Annual Declaration or Report Which Was 
Previously Submitted to BIS''
    Comments: One respondent requested that BIS clarify the 
circumstances under which the proposed requirement in Section 714.4(a) 
would apply to changes in the ``purpose'' of Schedule 3 chemical 
production. Section 714.4(a) of the proposed rule stated that an 
amended declaration or report must be submitted to BIS within 15 days 
of a change in the ``types'' of Schedule 3 chemicals produced, the 
``production range'' for these chemicals (as specified in the CWCR), 
the ``purpose'' of such production, and the addition of ``new plants'' 
for Schedule 3 chemical production. The respondent stated that 
information on the ``purpose'' of production appeared to be ancillary 
to and only needed under the remote circumstance that a plant site 
becomes aware of: (1) ``additional plants'' on the plant site producing 
a Schedule 3 chemical or (2) the production of an ``additional 
chemical'' at a plant already reporting under the plant site. The 
respondent requested that BIS provide clarification, by way of 
examples, of the circumstances under which changes to the ``purpose'' 
of Schedule 3 production would require submission of an amended 
declaration to BIS.
    Response: Section 714.4(a) of the proposed rule required that an 
amendment be submitted to BIS within 15 days of any change in: (1) The 
types of Schedule 3 chemicals produced, (2) the production range of 
Schedule 3 chemicals (as specified in the CWCR), (3) the purpose of 
Schedule 3 chemical production, and (4) the addition of new plant(s) 
for producing Schedule 3 chemicals. To eliminate any uncertainty 
concerning whether or not a change in a single type of information 
identified in Section 714.4(a) (e.g., the ``purpose'' of Schedule 3 
chemical production) would require submission of an amendment, BIS 
clarified the language in Section 714.4(a) of the proposed rule by 
revising the phrase, ``You must submit an amended declaration or report 
to BIS within 15 days of any change in the following information * * 
*,'' in the introductory text of paragraph (a), to read, ``You must 
submit an amended declaration or report to BIS within 15 days of 
determining that there has been a change in any of the following 
information that you have previously declared or reported * * *''. BIS 
also clarified that section by replacing the word ``and,'' at the end 
of paragraph (a)(3), with the word ``or.'' These changes to Section 
714.4(a) clearly indicate that a change in any one of the four types of 
information listed therein would require the submission of an amendment 
to BIS within 15 days from the date that a company determines such a 
change has occurred. For example, if a plant site declares consumption 
(``In-line consumption as produced (captive use)'') of a Schedule 3 
chemical as the only ``purpose'' of production in its declaration on 
past activities, but later learns that the chemical was also sold to 
another company in the United States, the plant site must submit an 
amendment to its declaration, declaring the additional end-use (i.e., 
transfer to another company or industry), within 15 days of having 
determined that the chemical was transferred, as well as consumed.

    Note: In contrast to the amendment requirements in Section 
714.4(a) of the CWCR, Section 714.3(a)(2) states that a 
``Declaration on Additionally Planned Activities'' is not required 
to change

[[Page 24925]]

anticipated end-use(s) of a chemical (i.e., purposes of production), 
unless there are other anticipated changes that must be declared, as 
specified in Section 714.3(a)(1)(i) through (a)(1)(iv) of the CWCR 
(e.g., the addition of a previously undeclared plant or chemical).

D. Sections 713.5(b)(5) and 714.4(b) ``Changes to Export or Import 
Information Submitted in Annual Reports on Exports and Imports From 
Undeclared Plant Sites, Trading Companies and U.S. Persons''
    Comments: Two respondents commented on the proposed end-use 
information requirements in Sections 713.5(b)(5) and 714.4(b)(5) of the 
CWCR, as they apply to changes to Schedule 2 and Schedule 3 annual 
reports previously submitted to BIS. One respondent noted that the CWCR 
do not require that information on end-use be included in an Annual 
Report of Exports or Imports. Both respondents asked BIS to indicate 
whether the end-use information requirements in Sections 713.5(b)(5) 
and 714.4(b)(5) of the CWCR were added to these sections in error or, 
if they were added intentionally, to clarify the purpose of the 
requirements.
    Response: BIS has determined that the requirement to submit end-use 
information was inadvertently included in sections 714.4 and 713.5 of 
the CWCR and has removed the requirement from both of these sections.
E. Section 716.3(a) ``Consent to Inspections; Warrants for 
Inspections''
    Comments: One respondent stated that the regulations should provide 
companies with the option of giving ``advance consent'' to routine and 
challenge inspections, as set forth in sections 716 and 717 of the 
CWCR, respectively. The respondent stated that such advance consent 
would become effective upon issuance by the U.S. National Authority 
(USNA) of a written notification of inspection, as specified in Section 
716.5(a)(2) of the CWCR. The respondent suggested that this option 
should allow the owner to choose whether to have the advance consent 
expire at the end of a specified period of time or to have no 
expiration date. To implement this option, the respondent suggested 
that BIS could include an ``advance consent'' provision in the annual 
declaration form that would allow the individual completing the form to 
check the appropriate boxes to indicate whether or not ``advance 
consent'' is given and, if so, whether that consent will expire at a 
specified time or have no expiration date. Alternatively, the 
respondent suggests that ``advance consent'' could be indicated by 
submission of a letter from the owner to BIS that would provide 
``advance consent.'' The respondent stated that this mode of consent 
would not diminish any rights under the rule to withdraw consent at any 
time.
    Response: Section 305(a) of the Chemical Weapons Convention 
Implementation Act (CWCIA) requires the United States Government to 
``seek the consent of the owner or the owner, operator, occupant, or 
agent in charge of the premises to be inspected prior to any inspection 
* * *'' (See 22 U.S.C. 6701, 6725, Pub. L. 105-277, Section 305(a)). 
BIS has made a conservative interpretation of this requirement and 
therefore seeks actual consent from the authorized owner, operator or 
agent in charge, after notification, prior to every inspection. We have 
adopted this interpretation to ensure that the rights bestowed on the 
public by the CWCIA are fully addressed. Accordingly, BIS will not 
adopt a method for the submission of advance consent to inspections.
F. Section 716.4(b)(1) ``Description of Inspections''
    Comments: One respondent stated that the use of the word ``may,'' 
in the context of the areas that can be included in a visual 
inspection, creates uncertainty with regard to those areas of a 
facility that are subject to inspection and those that are not. The 
respondent stated that visual inspection of areas outside the declared 
plant site should be required only if there are no other means of 
clarifying an ambiguity. The respondent asserted that BIS should 
provide clarification in Section 716 of the CWCR, or at least in the 
preamble to the final rule, concerning which areas of the declared 
plant and plant site will be subject to visual inspection and which 
areas may be subject to visual inspection. The respondent also 
suggested that BIS should provide a more detailed explanation in 
Section 716 about managed access and other protections that may apply 
to inspections.
    Response: BIS cannot provide a list of areas that will be or may be 
subject to visual inspection because each inspection is conducted 
differently within the limits of the CWC and the Act. As the 
representative of the United States (Inspected State Party), the Host 
Team Leader is responsible, as described in section 716.4(b)(2), for 
determining whether the Inspection Team's request to inspect any area, 
building, item or record is reasonable. Such determinations are made by 
the Host Team Leader on the basis of treaty requirements. Verification 
activities are carried out at declared ``plant sites.'' The CWC states 
that the focus of inspections shall be the declared plant (see CWC Part 
VII paragraph 25, Part VIII paragraph 20, and Part IX paragraph 17 for 
Schedule 2, Schedule 3 and UDOC inspections, respectively). These 
activities are further described in the CWCR. Access to other parts of 
a plant site are provided in a manner sufficient to clarify, to the 
satisfaction of the Inspection Team, any ambiguities that arise during 
an inspection. Managed access is a means through which access to other 
parts of a plant site is controlled, and it cannot be narrowly defined.
G. Section 716.4(b)(2) ``Scope of Consent''
    Comments: One respondent stated that there is no mention of the 
facility's role in determining whether or not an Inspection Team's 
request for access is reasonable. The respondent stated that input from 
the inspected facility is crucial to any determination made by the Host 
Team with regard to access and other inspection activities. The 
respondent, therefore, suggested that Section 716.4(b)(2) should be 
revised to read as follows:

    ``The Host Team Leader will make the determination of whether 
the Inspection Team's request to inspect any area, building, item or 
record is reasonable after consultation with the owner, operator, 
occupant or agent in charge of a facility.''

    Response: The Host Team Leader, as the representative of the United 
States during an inspection, has the sole responsibility for 
determining whether a request made by the Inspection Team is reasonable 
and necessary. The inspection being conducted at the facility is a U.S. 
Government-led inspection and therefore any interaction with the 
Inspection Team or decisions made regarding the conduct of the 
inspection are wholly within the province and authority of the U.S. 
Government. As a courtesy, BIS has made it a practice to consult with 
the facility prior to making these decisions. However, there is no 
obligation on the part of the U.S. Government to follow the instruction 
of, or await comment from, the facility when considering an Inspection 
Team request. Therefore, BIS will not revise section 716.4 to reflect 
the respondent's requested language.
H. Section 716.4(b)(3) ``ITAR Controlled Technology''
    Comments: One respondent stated that, in order to maximize the 
protection of technology controlled for export under the International 
Traffic in Arms

[[Page 24926]]

Regulations (ITAR) (22 CFR 120-130), the first sentence of this section 
should be revised to read as follows:

    ``ITAR-controlled technology cannot be divulged to the 
Inspection Team without U.S. Government (USG) authorization 
regardless of the nationalities of the Inspection Team members.''

    Response: A key role for BIS, during CWC inspections of facilities, 
is to ensure that these inspections are conducted in a manner that does 
not adversely impact facility compliance with the requirements of the 
International Traffic in Arms Regulations (ITAR), which are 
administered by the U.S. Department of State. The terms under which 
members of the Inspection Team may have access to ITAR-controlled 
technology and information are subject to the provisions of those 
regulations and the instructions given to the Department of Commerce by 
the Department of State. The language proposed by the respondent would 
materially affect the implementation of those ITAR provisions and, 
therefore, will not be incorporated into the CWCR.
    Comments: Another respondent stated that the procedures through 
which the U.S. Government authorizes the release of ITAR technology 
during CWC inspections are unclear. The respondent requested that BIS 
clarify the procedures (if any) for authorizing the release of such 
technology.
    Response: The CWCR do not alter the ITAR provisions or procedures 
(22 CFR 120-130) as they apply to the transfer of technology to foreign 
nationals. Procedurally, if there is no approval from the U.S. 
Department of State or its duly designated U.S. Government 
representative for disclosure of ITAR technology during an inspection, 
such technology cannot be disclosed.
I. Section 716.4(e) ``Records Review''
    Comments: Two respondents commented on the requirement in Section 
716.4(e) of the CWCR that, whenever the current owner of a declared 
facility does not have access to records for activities that took place 
under a previous owner of the facility, the previous owner must make 
such records available to the Host Team, for provision to the 
Inspection Team. One of the respondents said that, if contractually, 
records were transferred to the new owners of a facility subject to the 
CWCR, the previous owners should not be obligated to maintain 
duplicates of those records. Both respondents stated that this section 
of the CWCR appeared to impose an indefinite recordkeeping obligation 
upon former owners of declared facilities who were no longer subject to 
the CWCR and suggested that BIS should amend this section of the CWCR 
to clarify that, under any circumstances where the previous owner is 
obligated to maintain records, the five-year retention period described 
in Section 721.2(b) of the CWCR would apply.
    Response: Section 716.4(e) of the CWCR does not obligate the 
previous owner of a declared facility to maintain duplicates of records 
that were contractually transferred to the new owner of the facility. 
The company that legally owns the records after the sale is responsible 
for retaining the records and making them available for inspection. 
Accordingly, there is no duplication of recordkeeping. Section 721.2(b) 
establishes a five year retention period for all supporting materials 
and documentation related to compliance with the CWCR, so there are no 
open-ended record keeping obligations under the CWCR. However, in order 
to clarify the recordkeeping requirements that apply to previous owners 
of declared facilities, BIS is amending Section 716.4(e) to expressly 
indicate that, ``if a facility does not have access to records for 
activities that took place under previous ownership, because such 
records were not transferred to the current owner of the facility by 
the previous owner (e.g., as part of the contract involving the sale of 
the facility), the previous owner must make such records available to 
the Host Team for provision to the Inspection Team * * *.'' The current 
owner of a facility, upon receiving notification of an inspection, 
would be responsible for informing BIS if the previous owner did not 
transfer records for activities that took place under the previous 
ownership--this will allow BIS to contact the previous owner of the 
facility, to arrange for access to such records, if BIS deems them 
relevant to the inspection activities. BIS is also amending Section 
721.2(a) of the CWCR, consistent with the clarifications to Section 
716.4, to specify tha