Chemical Weapons Convention Regulations: UDOC “Change in Inspection Status Form;” Amendments to Records Review and Recordkeeping Requirements, 59032-59039 [E6-16597]

Agencies

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

[Federal Register Volume 71, Number 194 (Friday, October 6, 2006)]
[Proposed Rules]
[Pages 59032-59039]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-16597]


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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Parts 715, 716, and 721

[Docket No. 060831231-6231-01]
RIN 0694-AD53


Chemical Weapons Convention Regulations: UDOC ``Change in 
Inspection Status Form;'' Amendments to Records Review and 
Recordkeeping Requirements

AGENCY: Bureau of Industry and Security, Commerce.

ACTION: Proposed rule and request for comments.

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SUMMARY: The Bureau of Industry and Security (BIS) is publishing this 
proposed rule to amend the Chemical Weapons Convention Regulations 
(CWCR) to expedite the collection of information concerning the 
inspection status of plant sites that produce unscheduled discrete 
organic chemicals (UDOCs) subject to the declaration requirements of 
the CWCR, to clarify the scope of the CWCR records review and 
recordkeeping requirements, and to update the maximum civil penalty 
that may be imposed for violations of the CWCR restrictions on imports 
of CWC Schedule 1 and Schedule 2 chemicals. The CWCR include 
requirements to declare certain activities, involving scheduled 
chemicals and UDOCs, and to provide access for on-site verification by 
international inspectors of certain declared facilities in the United 
States.
    Specifically, this proposed rule would amend the CWCR by revising 
the annual declaration requirements for UDOCs to allow a ``declared'' 
plant site currently subject to inspection, which anticipates that its 
production of UDOCs during the current calendar year will be below the 
inspection threshold level indicated in the CWCR, to submit a Change in 
Inspection Status Form to BIS by December 15th of the current calendar 
year. In addition, any such UDOC plant site containing at least one 
plant that anticipates producing an individual PSF chemical (i.e., a 
UDOC containing the elements phosphorus, sulfur or fluorine) in 
quantities that exceed the declaration threshold for such chemicals 
would have the option of submitting its Annual Declaration on Past 
Activities, in lieu of a Change in Inspection Status Form, by December 
15th of the current calendar year. Otherwise, the CWCR require that the 
Annual Declaration on Past Activities be submitted by February 28th of 
the following year. The information provided to BIS, as a result of 
this change, would ensure that the plant site would not be subject to 
inspection during the first 90 days of the next calendar year (i.e., 
the year after the UDOC activities took place), which is the period 
when the United States compiles its annual declaration on past 
activities for submission to the Organization for the Prohibition of 
Chemical Weapons (OPCW). In addition, this information would strengthen 
the verification regime of the CWC by allowing the OPCW to schedule 
inspections, on a year-round basis, of those UDOC facilities in the 
United States that meet or exceed the inspection threshold level 
indicated in the CWCR.
    This proposed rule would also amend the CWCR by revising the 
records review provisions to clarify that a facility must provide the 
OPCW Inspection Team with access to all supporting materials and 
documentation used by the facility to prepare declarations and to 
otherwise comply with the CWCR, including records related to activities 
that have taken place at the facility since the beginning of the 
previous calendar year (i.e., up to and including the date of the 
inspection), even if the facility has not submitted its current year 
Annual Declaration on Past Activities to BIS at the time the inspection 
takes place.
    In addition, this rule would revise the CWCR records review and 
recordkeeping requirements to clarify that the types of records that 
are subject to these requirements include all supporting materials and 
documentation associated with the movement into, around, and from the 
facility of declared chemicals and their feedstock or any product 
chemicals formed from such chemicals and feedstock. The purpose of this 
clarification would be to ensure that the CWCR records review and 
recordkeeping requirements fully conform with the inspection aims 
described in the inspection provisions of the CWCR, which include 
verifying the absence of Schedule 1 chemicals and the non-diversion of 
Schedule 1 and Schedule 2 chemicals.
    Finally, this rule would amend the enforcement provisions of the 
CWCR to increase the maximum civil penalty that may be imposed for 
violations of the CWCR restrictions on imports of CWC Schedule 1 or 
Schedule 2 chemicals from $11,000 to $50,000 to reflect amendments to 
the International Emergency Economic Powers Act (IEEPA) made by the USA 
PATRIOT Improvement and Reauthorization Act of 2005, which was enacted 
on March 9, 2006.

[[Page 59033]]


DATES: Comments on this rule must be received November 6, 2006.

ADDRESSES: You may submit comments on this rule, identified by RIN 
0694-AD53, 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-
AD53'' 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-AD53.
    This rule contains a collection of information approved by OMB 
under Control Number 0694-0091 (Chemical Weapons Convention--
Declaration and Report Forms). You may submit comments regarding this 
collection of information (identified by OMB Control No. 0694-0091), 
including suggestions for reducing the burden, to David Rostker, Office 
of Management and Budget (OMB), by e-mail to David--
Rostker@omb.eop.gov, or by fax to (202) 395-7285; and to the Regulatory 
Policy Division, Bureau of Industry and Security, Department of 
Commerce, P.O. Box 273, Washington, DC 20044. Comments on this 
collection of information should be submitted separately from comments 
on the proposed rule (i.e., RIN 0694-AD53)--all comments on the latter 
should be submitted by one of the four methods outlined above.

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 and reports, 
contact the Treaty Compliance Division, Office of Nonproliferation 
Controls 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

    This proposed rule would amend the Chemical Weapons Convention 
Regulations (CWCR) to expedite the collection of information concerning 
the inspection status of plant sites that produce unscheduled discrete 
organic chemicals (UDOCs) that are subject to the declaration 
requirements of the CWCR. This proposed rule would also clarify the 
scope of the CWCR records review and recordkeeping requirements. In 
addition, this rule would update the maximum civil penalty that may be 
imposed for violations of the CWCR restrictions on imports of CWC 
Schedule 1 and Schedule 2 chemicals. The CWCR include requirements to 
declare certain activities, involving scheduled chemicals and UDOCs, 
and to provide access for on-site verification by international 
inspectors of certain declared facilities in the United States.
    The CWCR implement the provisions of 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), affecting U.S. industry and U.S. persons, in accordance 
with the provisions of the Chemical Weapons Convention Implementation 
Act of 1998 (the Act or CWCIA) (22 U.S.C. 6701 et seq.). The Act 
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 from the Organization for the Prohibition of Chemical 
Weapons (OPCW).
    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 UDOCs, many of which have significant commercial 
applications.
    Part IX of the Verification Annex of the CWC contains provisions 
that apply to declarations and inspection of ``other chemical 
production facilities,'' which are referred to as UDOC plant sites in 
Part 715 of the CWCR. Plant sites that declare under Part 715 of the 
CWCR must submit an Annual Declaration on Past Activities describing 
UDOC activities subject to declaration during the previous calendar 
year. These annual declarations must be submitted to BIS no later than 
February 28th of the year that follows the calendar year in which the 
UDOC activities took place. The U.S. Government compiles these 
declarations into the annual U.S. declaration on past activities, which 
it submits to the OPCW within 90 days after the beginning of the 
calendar year in which the UDOC plant sites submit their individual 
declarations to BIS.
    Part 716 of the CWCR states that a UDOC plant site is subject to 
inspection during a specific calendar year only if it produced in 
excess of 200 metric tons aggregate of UDOCs during the previous 
calendar year (see Sec.  716.1(b)(4)). A plant site cannot be subject 
to inspection, for UDOC activities that took place during the previous 
calendar year, if: (1) A declaration is not required to be submitted to 
the OPCW or (2) a declaration is submitted to the OPCW with aggregate 
quantities of UDOCs below 200 metric tons. Since the due date for a 
UDOC plant site to submit its Annual Declaration on Past Activities to 
BIS is February 28th of the year following the calendar year in which 
the UDOC activities took place, there is no mechanism in the CWCR that 
allows the U.S. Government to determine which UDOC plant sites are 
subject to inspection and to notify the OPCW concerning the inspection 
status of such plant sites, prior to the due date for submitting the 
U.S. annual declaration on past activities to the OPCW (i.e., within 90 
days after the beginning of the calendar year). Therefore, as a 
practical matter, UDOC plant sites in the United States do not become 
subject to inspection by the OPCW until the U.S. annual declaration on 
past activities has been submitted to the OPCW. Universal application 
of this approach would interfere with the conduct of UDOC inspections 
in States Parties for the first 90 days of each calendar year (i.e., a 
``90-day gap''), which would have the long-term effect of undermining 
the verification regime of the CWC.
    In order to eliminate this ``90-day gap,'' BIS proposes to amend 
the CWCR by revising the annual declaration requirements for UDOCs to 
allow a ``declared'' plant site currently subject to inspection, which 
anticipates that its production of UDOCs during the current calendar 
year will be below the inspection threshold level indicated in the 
CWCR, to submit a Change in Inspection Status Form to BIS, so that BIS 
can inform the OPCW that the plant site will not be subject to 
inspection during the next calendar year. This new form must be 
submitted to BIS no later than December 15th of the current calendar 
year (i.e., the year in which

[[Page 59034]]

UDOC production is anticipated to be below the inspection threshold 
level). The U.S. Government would then inform the OPCW that the plant 
site will not be subject to inspection during the next calendar year.
    Certain plant sites would be given the option of submitting their 
Annual Declaration on Past Activities in lieu of the Change in 
Inspection Status Form. In choosing this alternative, however, the 
plant sites would have to submit their Annual Declaration on Past 
Activities to BIS by December 15th of the current calendar year, 
instead of February 28th of the following year, as is normally required 
under the CWCR. The only UDOC plant sites that would be eligible to use 
this option would be those that anticipate producing by synthesis one 
or more PSF chemicals (i.e., UDOCs containing the elements phosphorus, 
sulfur or fluorine) during the current calendar year, in quantities 
that would require them to submit an Annual Declaration on Past 
Activities to BIS, but that would be below the CWCR inspection 
threshold level for UDOCs (i.e., plant sites that contain at least one 
plant that anticipates producing in excess of 30 metric tons of an 
individual PSF chemical, but that do not anticipate producing by 
synthesis in excess of 200 metric tons aggregate of all UDOCs during 
the current calendar year).
    If, subsequent to submitting its Change in Inspection Status Form 
to BIS, a UDOC plant site determines that the production by synthesis 
of UDOCs at the plant site actually exceeded the UDOC inspection 
threshold level specified in Sec.  715.1(d)(1) of the CWCR, the plant 
site must indicate this fact when it submits its Annual Declaration on 
Past Activities to BIS and explain, on Form B, why the plant site 
exceeded the UDOC inspection threshold. In addition, any UDOC plant 
site that chooses the option of submitting its Annual Declaration on 
Past Activities to BIS by December 15th, in lieu of a Change in 
Inspection Status Form, and subsequently determines that the production 
by synthesis of UDOCs at the plant site actually exceeded the UDOC 
inspection threshold level specified in Sec.  715.1(d)(1) of the CWCR, 
must submit an amendment to its Annual Declaration on Past Activities 
(see Sec.  715.2 of the CWCR) indicating this fact and explaining, on 
Form B, why the plant site exceeded the UDOC inspection threshold. 
Currently inspectable UDOC plant sites that do not submit either a 
Change in Inspection Status Form or an Annual Declaration on Past 
Activities by December 15th of the current calendar year, as provided 
in this rule, will remain subject to inspection through at least the 
90-day period at the beginning of the next calendar year.
    This proposed rule would also amend the CWCR to clarify the scope 
of the records review requirements for inspections. Currently, Sec.  
716.4(e) of the CWCR is unclear concerning the extent to which an OPCW 
Inspection Team will have access to a facility's records that are 
related to activities that took place at the facility during the 
previous calendar year. This proposed rule would amend Sec.  716.4(e) 
of the CWCR to clarify that a facility undergoing inspection must 
provide the Inspection Team with access to all supporting materials and 
documentation used by the facility to prepare declarations and to 
otherwise comply with the CWCR, including records related to activities 
that have taken place at the facility since the beginning of the 
previous calendar year (i.e., up to and including the date of the 
inspection), regardless of whether or not the facility has submitted 
its Annual Declaration on Past Activities to BIS at the time of the 
inspection.
    In addition, this proposed rule would amend Sec.  716.4(e) of the 
CWCR to ensure that the CWCR records review requirements for 
inspections fully conform with the inspection aims described in Part 
716 of the CWCR. Since BIS began hosting inspections under the CWCR, 
the standard practice has been for facilities to provide, as 
appropriate, records associated with the movement into, around, and 
from the facility of declared chemicals and their feedstock or product 
chemicals formed from such chemicals and feedstock. The OPCW Inspection 
Team requires access to these types of records in order to accomplish 
the aims of the inspections, as described in Parts VI-IX of the 
Verification Annex of the CWC and in Part 716 of the CWCR. Parts VI-IX 
of the CWC Verification Annex establish the general and specific aims 
for inspections, including verification of the absence of Schedule 1 
chemicals and the non-diversion of Schedule 1 and Schedule 2 chemicals. 
Part 716 of the CWCR describes these CWC inspection aims and 
establishes requirements for providing Inspection Teams with access to 
records in order to achieve these aims. Currently, Sec.  716.4(e) of 
the CWCR does not clearly indicate that facilities are required to make 
available to the Inspection Team all supporting materials and 
documentation associated with the movement into, around, and from the 
facility of declared chemicals and their feedstock or any product 
chemicals formed from such chemicals and feedstock. Therefore, this 
proposed rule would amend Sec.  716.4(e) to clearly indicate that the 
facility must make all such records available to the Inspection Team.
    Consistent with the clarification to Sec.  716.4(e) of the CWCR 
described above, this proposed rule would also amend the recordkeeping 
provisions in Sec.  721.2(a) of the CWCR to specifically require that 
each facility subject to inspection under Part 716 of the CWCR retain 
all records associated with the movement into, around, and from the 
facility of declared chemicals and their feedstock or any product 
chemicals formed from such chemicals.
    Finally, this rule would amend the enforcement provisions in Part 
719 of the CWCR to increase the maximum civil penalty that may be 
imposed for violations of the CWCR restrictions on imports of CWC 
Schedule 1 or Schedule 2 chemicals from $11,000 to $50,000 to reflect 
amendments to Section 206 of the International Emergency Economic 
Powers Act (IEEPA) (50 U.S.C. 1705) made by the USA PATRIOT ACT 
Improvement and Reauthorization Act of 2005 (Public Law 109-177), which 
was enacted on March 9, 2006. Specifically, this rule would amend 
Section 719.3(b) of the CWCR and the footnote thereto to increase the 
maximum civil penalty that BIS may impose under IEEPA. As a result of 
this amendment to the CWCR, any violations of the CWC Schedule 1 or 
Schedule 2 import restrictions described in Section 719.3(a) of the 
CWCR will be subject to the increased IEEPA maximum civil penalty of 
$50,000.

Rulemaking Requirements

    1. This proposed rule has been determined to be not significant for 
purposes of E.O. 12866.
    2. Notwithstanding any other provision of law, no person is 
required to respond to, nor shall any person be subject to a penalty 
for failure to comply with, a collection of information subject to the 
Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) (PRA), unless 
that collection of information displays a currently valid Office of 
Management and Budget (OMB) Control Number. This rule contains a 
collection of information subject to the requirements of the PRA. This 
collection has been approved by OMB under Control Number 0694-0091 
(Chemical Weapons Convention--Declaration and Report Forms), which 
carries burden hour estimates, per respondent, of 10.6 hours for 
Schedule 1 Chemicals, 11.9 hours for Schedule 2 chemicals, 2.5 hours 
for Schedule 3 chemicals, 5.3 hours or 5.1 hours for unscheduled 
discrete organic chemicals (depending upon whether an

[[Page 59035]]

Annual Declaration on Past Activities or a No Changes Authorization 
Form, respectively, is required), 0.17 hours for Schedule 1 
notifications, and 1.7 hours for compliance review requests. These 
burden hour estimates also include all types of amendments required 
under the Chemical Weapons Convention Regulations (CWCR). The 
Declaration and Report Handbooks include a ``Guide to Submission of 
Forms'' which also identifies the specific forms that must be included 
in a declaration or report package. To calculate the number of hours it 
takes to complete a specific type of declaration or report, multiply 
the number of forms required for a specific declaration or report type 
by the number of hours estimated to complete each form. BIS will use 
the information contained in declarations and reports submitted by U.S. 
persons to compile the U.S. National Industrial Declaration in order to 
meet our obligations under the Chemicals Weapons Convention. BIS will 
submit the U.S. National Industrial Declaration to the United States 
National Authority who will forward the Declaration to the Organization 
for the Prohibition of Chemical Weapons as required by the Convention.
    This rule would increase the burden hours under the approved 
collection (i.e., Control Number 0694-0091) by amending Sec.  715.1(d) 
of the CWCR to add a new requirement for the submission of a Change in 
Inspection Status Form that applies to any ``declared'' unscheduled 
discrete organic chemical (UDOC) plant site currently subject to 
inspection, which anticipates that its production of UDOCs during the 
current calendar year will be below the inspection threshold level 
indicated in the CWCR. These UDOC plant sites would be required to 
submit a Change in Inspection Status Form to BIS, by December 15th of 
the current calendar year, in order to ensure that they would not be 
subject to inspection during the first 90 days of the next calendar 
year. Currently, there is no mechanism in the CWCR that allows the U.S. 
Government to determine which UDOC plant sites are subject to 
inspection and to notify the OPCW concerning the inspection status of 
such plant sites, prior to the due date for submitting the U.S. annual 
declaration on past activities to the OPCW (i.e., within 90 days after 
the beginning of the calendar year). Therefore, as a practical matter, 
UDOC plant sites in the United States do not become subject to 
inspection by the OPCW until the U.S. annual declaration on past 
activities has been submitted to the OPCW. Universal application of 
this approach would interfere with the conduct of UDOC inspections in 
States Parties for the first 90 days of each calendar year (i.e., the 
``90-day gap''), which would have the long-term effect of undermining 
the verification regime of the CWC.
    BIS estimates that the burden hours for completion and submission 
of the Change in Inspection Status Form will be 5.1 hours per 
respondent. The total burden hours for this additional collection of 
information are estimated to be 30.6 hours (i.e., 5.1 burden hours x 6 
respondents). The estimated total cost of this additional collection of 
information will be $1,163 (30.6 burden hours x $38/hour). As a result 
of the changes made by this rule, the total estimated annual burden 
hours under the approved collection (i.e., Control Number 0694-0091) 
would increase from 4,471 burden hours to 4,501.6 burden hours. This 
estimate takes into consideration the fact that this rule provides 
certain ``declared'' UDOC plant sites (i.e., plant sites that 
anticipate producing one or more PSF chemicals during the current 
calendar year, in quantities that would require them to submit an 
Annual Declaration on Past Activities to BIS, but that would be below 
the CWCR inspection threshold level for UDOCs) with the option of 
submitting their Annual Declaration on Past Activities earlier than 
normally required (i.e., December 15th of the year in which the UDOC 
activities take place, instead of February 28th of the following year), 
in lieu of submitting a Change in Inspection Status Form.
    This rule also proposes to make several amendments to the CWCR 
records review and recordkeeping requirements, none of which would 
affect the burden hours and associated costs under the approved 
collection (i.e., Control Number 0694-0091). This rule would amend 
Sec.  716.4(e) of the CWCR to: (1) Clarify the extent to which an OPCW 
Inspection Team will have access to a facility's records that are 
related to activities that took place at the facility during the 
previous calendar year (by requiring facilities undergoing inspection 
to provide the Inspection Team with access to all supporting materials 
and documentation used by the facility to prepare declarations and to 
otherwise comply with the CWCR, including records related to activities 
that have taken place at the facility since the beginning of the 
previous calendar year, i.e., up to and including the date of the 
inspection) and (2) ensure that the CWCR records review requirements 
for inspections fully conform with the inspection aims described in 
Part 716 of the CWCR (by requiring facilities to make available to the 
Inspection Team all supporting materials and documentation associated 
with the movement into, around, and from the facility of declared 
chemicals and their feedstock or any product chemicals formed from such 
chemicals and feedstock). Consistent with the changes to Sec.  716.4(e) 
of the CWCR, this proposed rule would amend the recordkeeping 
provisions in Sec.  721.2(a) of the CWCR to specifically require that 
each facility subject to inspection under Part 716 of the CWCR retain 
all records associated with the movement into, around, and from the 
facility of declared chemicals and their feedstock or any product 
chemicals formed from such chemicals.
    In order to assess the extent to which requiring facilities to 
maintain and make available records to verify the non-diversion of CWC 
Schedule 1 and Schedule 2 chemicals would affect the burden hours and 
associated costs under the approved collection (Control Number 0694-
0091), BIS conducted a voluntary survey of nine facilities, requesting 
these facilities to estimate the time that would be required to prepare 
and maintain records used to determine non-diversion of CWC Schedule 1 
and Schedule 2 chemicals (e.g., records on chemical production, 
processing, consumption, inventory, transfers, and other dispositions). 
All five of the facilities that responded to the voluntary survey 
indicated that they already use and maintain such records to prepare 
their declarations (in accordance with the requirements of the CWCR) 
and for other internal procedures. Based on the results of this survey, 
BIS determined that the proposed amendments to the CWCR to require 
declared chemical facilities to maintain and make available records for 
verifying the non-diversion of CWC Schedule 1 and Schedule 2 chemicals 
would not impose any additional burden or associated costs under the 
approved collection.
    BIS also assessed the extent to which burden hours and associated 
costs under the approved collection (Control Number 0694-0091) would be 
affected by requiring facilities to provide the Inspection Team with 
access to all supporting materials and documentation used by the 
facility to prepare declarations and to otherwise comply with the CWCR, 
including records related to activities that have taken place at the 
facility since the beginning of the previous calendar year (i.e., up to 
and including the date of the inspection). BIS determined that there 
would be no additional burden or associated costs under the approved 
collection, as a result of this

[[Page 59036]]

recordkeeping requirement, because facilities currently maintain and 
provide access to such records in order to comply with the existing 
declaration, recordkeeping, and/or inspection requirements in the CWCR.
    Send comments regarding this burden estimate or any other aspect of 
this collection of information, including suggestions for reducing the 
burden, to David Rostker, Office of Management and Budget (OMB), by e-
mail to David--Rostker@omb.eop.gov, or by fax to (202)395-7285; and to 
the Regulatory Policy Division, Bureau of Industry and Security, 
Department of Commerce, P.O. Box 273, Washington, DC 20044.
    3. This rule does not contain policies with Federalism implications 
as that term is defined in Executive Order 13132.
    4. The Regulatory Flexibility Act (RFA), as amended by the Small 
Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), 5 U.S.C. 
601 et seq., generally requires an agency to prepare a regulatory 
flexibility analysis of any rule subject to the notice and comment 
rulemaking requirements under the Administrative Procedure Act (5 
U.S.C. 553) or any other statute, unless the agency certifies that the 
rule will not have a significant economic impact on a substantial 
number of small entities. Under section 605(b) of the RFA, however, if 
the head of an agency certifies that a rule will not have a significant 
economic impact on a substantial number of small entities, the statute 
does not require the agency to prepare a regulatory flexibility 
analysis. Pursuant to section 605(b), the Chief Counsel for 
Regulations, Department of Commerce, certified to the Chief Counsel for 
Advocacy, Small Business Administration, that this proposed rule, if 
promulgated, will not have a significant economic impact on a 
substantial number of small entities for the reasons explained below. 
Consequently, BIS has not prepared a regulatory flexibility analysis.
    Small entities include small businesses, small organizations and 
small governmental jurisdictions. For purposes of assessing the impacts 
of this proposed rule on small entities, small entity is defined as: 
(1) A small business according to RFA default definitions for small 
business (based on SBA size standards), (2) a small governmental 
jurisdiction that is a government of a city, county, town, school 
district or special district with a population of less than 50,000, and 
(3) a small organization that is any not-for-profit enterprise which is 
independently owned and operated and is not dominant in its field. BIS 
has determined that this proposed rule would affect only the first 
category of small entities (i.e., small businesses). The President 
reported to the Congress, in December 2003, as required under Section 
309 of the CWC Implementation Act, that 297 U.S. companies representing 
691 facilities, plant sites, and trading companies were subject to the 
declaration and reporting requirements under the Chemical Weapons 
Convention Regulations (CWCR). Although BIS estimates that the majority 
of these 297 companies are businesses that have more than 500 
employees, BIS does not have sufficient information on these companies 
to definitively characterize them as large entities. The Small Business 
Administration (SBA) has established standards for what constitutes a 
small business, with respect to each of the Standard Industrial 
Classification (SIC) code categories for ``Chemicals and Allied 
Products.'' However, BIS is not able to determine which of these SIC 
code categories apply to the companies that are subject to the 
declaration, reporting, advance notification, recordkeeping or 
inspection requirements of this rule. Therefore, for the purpose of 
assessing the impact of this final rule, BIS assumes that the 297 
companies are small entities.
    This proposed rule would not affect a substantial number of small 
entities, since BIS estimates that no more than six unscheduled 
discrete organic chemical (UDOC) plant sites per calendar year will be 
required to submit a Change in Inspection Status Form for their UDOC 
activities. Furthermore, the additional recordkeeping and reporting 
requirements imposed by this rule would not have a significant economic 
impact on these entities.
    First, this proposed rule would amend Sec.  715.1(d) of the CWCR to 
add a new requirement for the submission of a Change in Inspection 
Status Form that applies to any ``declared'' UDOC plant site currently 
subject to inspection, which anticipates that its production of UDOCs 
during the current calendar year will be below the inspection threshold 
level indicated in the CWCR. These UDOC plant sites would be required 
to submit a Change in Inspection Status Form to BIS, by December 15th 
of the current calendar year, in order to ensure that they would not be 
subject to inspection during the first 90 days of the next calendar 
year. Since BIS estimates that no more than six UDOC plant sites would 
be affected by this new CWCR requirement, the requirement would not 
affect a substantial number of small entities.
    Second, BIS estimates that the burden hours for completion and 
submission of the Change in Inspection Status Form would be 5.1 hours 
per respondent. The total annual burden hours for this additional 
collection of information are estimated to be 30.6 hours (i.e., 5.1 
burden hours x 6 respondents). Furthermore, the estimated total annual 
cost of this additional collection of information for all affected 
entities would be $1,163 (30.6 burden hours x $38/hour). This estimate 
takes into consideration the fact that this rule would provide certain 
``declared'' UDOC plant sites (i.e., plant sites that anticipate 
producing one or more PSF chemicals during the current calendar year, 
in quantities that would require them to submit an Annual Declaration 
on Past Activities to BIS, but that would be below the CWCR inspection 
threshold level for UDOCs) with the option of submitting their Annual 
Declaration on Past Activities earlier than normally required (i.e., 
December 15th of the year in which the UDOC activities take place, 
instead of February 28th of the following year), in lieu of submitting 
a Change in Inspection Status Form. Based on these estimates, the total 
cost of these additional recordkeeping and reporting requirements would 
represent only a small percentage of the revenues generated by the 
affected companies.
    Therefore, this proposed rule would not affect a substantial number 
of small entities (no more than 6 UDOC plant sites, per annum) and the 
total economic impact on the affected entities (i.e., $1,163) would not 
be significant. Since the revisions that this rule proposes to make to 
the CWCR would not impose a significant economic impact on a 
substantial number of small entities, BIS did not prepare a regulatory 
flexibility analysis for this rule.

List of Subjects

15 CFR Part 715

    Chemicals, Exports, Foreign Trade, Imports, Reporting and 
recordkeeping requirements.

15 CFR Part 716

    Chemicals, Confidential business information, Reporting and 
recordkeeping requirements, Search warrant, Treaties.

15 CFR Part 721

    Reporting and recordkeeping requirements.

    Accordingly, parts 715, 716, and 721 of the Chemical Weapons 
Convention Regulations (15 CFR parts 710-729) are proposed to be 
amended as follows:

[[Page 59037]]

PART 715--[AMENDED]

    1. The authority citation for 15 CFR part 715 continues to read as 
follows:

    Authority: 22 U.S.C. 6701 et seq.; E.O. 13128, 64 FR 36703.

    2. Section 715.1 is amended by adding a Note immediately following 
paragraph (b)(1) and by revising paragraph (d) to read as follows:


Sec.  715.1  Annual declaration requirements for production by 
synthesis of unscheduled discrete organic chemicals (UDOCs).

* * * * *
    (b) * * *
    (1) * * *


    Note to Sec.  715.1(b)(1): If there is a change in the 
inspection status of your plant site, as described in paragraph 
(d)(2) of this section, you may have the option of substituting the 
Annual Declaration on Past Activities, for the Change in Inspection 
Status Form (see Note 3 to paragraph (d)(2) of this section). In 
this case, the due date for submitting the Annual Declaration on 
Past Activities to BIS, covering UDOC production at your plant site 
during the current calendar year, would be December 15th of the 
current calendar year, instead of February 28th of the next calendar 
year (also see Supplement No. 3 to this part). If you choose to 
submit your Annual Declaration on Past Activities to BIS by December 
15th and, subsequently, you determine that the production by 
synthesis of UDOCs at your plant site actually exceeded the UDOC 
inspection threshold level specified in paragraph (d)(1) of this 
section, you must submit an amendment to your Annual Declaration on 
Past Activities (see Sec.  715.2 of the CWCR) and indicate, on Form 
B, the reason your plant site exceeded the UDOC inspection 
threshold.

* * * * *
    (d) Routine inspections of declared UDOC plant sites--(1) 
Inspection requirement. A ``declared'' UDOC plant site is subject to 
routine inspection by the Organization for the Prohibition of Chemical 
Weapons (OPCW) (see part 716 of the CWCR) if it produced by synthesis 
more than 200 metric tons aggregate of UDOCs during the previous 
calendar year.
    (2) Change in inspection status. You may complete the Change in 
Inspection Status Form, to ensure that your facility does not remain 
subject to inspection during the first 90 days of next calendar year 
(i.e., prior to the submission of the U.S. declaration to the OPCW), 
if:
    (i) Your plant site is currently subject to inspection, pursuant to 
paragraph (d)(1) of this section, based on your plant site's production 
by synthesis of UDOCs during the previous calendar year; and
    (ii) Your plant site's production by synthesis of UDOCs in the 
current calendar year will be below the inspection threshold level 
specified in paragraph (d)(1) of this section by the deadline indicated 
in Supplement No. 3 to this part, and is anticipated to remain below 
that threshold level through the remainder of the current calendar 
year.


    Note 1 to Sec.  715.1(d)(2): Upon receipt of the Change in 
Inspection Status Form, BIS will inform the Organization for the 
Prohibition of Chemical Weapons (OPCW) that your plant site is not 
subject to inspection during the next calendar year.


    Note 2 to Sec.  715.1(d)(2): If, after submitting your Change in 
Inspection Status Form to BIS, you determine that the production by 
synthesis of UDOCs at your plant site actually exceeded the UDOC 
inspection threshold level specified in paragraph (d)(1) of this 
section, you must indicate this fact when you submit your Annual 
Declaration on Past Activities to BIS and indicate, on Form B, the 
reason your plant site exceeded the UDOC inspection threshold.


    Note 3 to Sec.  715.1(d)(2): You may submit the Annual 
Declaration on Past Activities described in paragraph (b)(1) of this 
section, instead of the Change in Inspection Status Form, if you 
anticipate that UDOC production at your plant site during the 
current calendar year will be below the inspection threshold level 
specified in paragraph (d)(1) of this section, but you expect your 
plant site to remain subject to the UDOC declaration requirements in 
paragraph (a)(1) of this section. In this case, the due date for the 
Annual Declaration on Past Activities will be December 15th of the 
current calendar year, instead of February 28th of the next calendar 
year. Note that any changes to information contained in the Annual 
Declaration on Past Activities must be addressed in accordance with 
the amendment requirements in Sec.  715.2 of the CWCR. For example, 
if subsequent to the submission of your Annual Declaration on Past 
Activities to BIS on December 15th, you determine that the 
production by synthesis of UDOCs at your plant site actually 
exceeded the UDOC inspection threshold level specified in paragraph 
(d)(1) of this section, you must submit an amendment to your Annual 
Declaration on Past Activities (see Sec.  715.2 of the CWCR) and 
indicate, on Form B, the reason your plant site exceeded the UDOC 
inspection threshold.


    Note 4 to Sec.  715.1(d)(2): Currently inspectable UDOC plant 
sites that do not submit either a Change in Inspection Status Form 
or Annual Declaration of Past Activities by December 15th of the 
current calendar year, in accordance with paragraph (d)(2) of this 
section, will remain subject to inspection through at least the 90-
day period at the beginning of the next calendar year.


    3. Section 715.4 is amended by revising the section heading and 
introductory text, by revising paragraph (c), and by adding a new 
paragraph (d) to read as follows:


Sec.  715.4  Deadlines for submitting UDOC declarations, No Changes 
Authorization Forms, Change in Inspection Status Forms, and amendments.

    Declarations, No Changes Authorization Forms, Change in Inspection 
Status Forms, and amendments required under this part must be 
postmarked by the appropriate dates identified in Supplement No. 3 to 
this part 715 of the CWCR. Required documents under this part include:
* * * * *
    (c) Change in Inspection Status Form--May be completed and 
submitted to BIS if your plant site is currently subject to inspection, 
pursuant to Sec.  715.1(d)(1) of the CWCR, and you anticipate that the 
production of UDOCs at your plant site during the current calendar year 
will remain below the inspection threshold level indicated therein 
(i.e., 200 metric tons aggregate); and
    (d) Amended declaration.
    4. Supplement No. 3 to part 715 is revised to read as follows:

Supplement No. 3 to Part 715--Deadlines for Submission of Declarations, 
No Changes Authorization Forms, Amendments for Unscheduled Discrete 
Organic Chemical (UDOC) Facilities, and Change in Inspection Status 
Forms

 
------------------------------------------------------------------------
         Declarations            Applicable forms        Due dates
------------------------------------------------------------------------
Annual Declaration on Past      Certification,     February 28 of the
 Activities: (previous           UDOC, A (as        year following any
 calendar year).                 appropriate), B    calendar year in
Declared plant site...........   (optional).        which the production
                                                    by synthesis of
                                                    UDOCs exceeded the
                                                    applicable
                                                    declaration
                                                    threshold in Sec.
                                                    715.1(a)(1) of the
                                                    CWCR. \*\

[[Page 59038]]

 
No Changes Authorization Form:  No Changes         February 28 of the
 (declaration required, but no   Authorization      year following any
 changes to data contained in    Form.              calendar year in
 previously submitted annual                        which the production
 declaration on past                                by synthesis of
 activities (previous calendar                      UDOCs exceeded the
 year).                                             applicable
Declared plant site...........                      declaration
                                                    threshold in Sec.
                                                    715.1(a)(1) of the
                                                    CWCR.
Amended Declaration:            Certification,     --15 calendar days
 --Declaration information       UDOC, A (as        after change in
 --Company information           appropriate), B    information.
 --Post-inspection letter        (optional).       --30 calendar days
                                                    after change in
                                                    information.
                                                   --45 calendar days
                                                    after receipt of
                                                    letter.
Change in Inspection Status     Change in          December 15th of any
 Form: (applies only if your     Inspection         calendar year in
 plant site is currently         Status Form.       which the production
 subject to inspection,                             by synthesis of
 pursuant to Sec.                                   UDOCs is anticipated
 715.1(d)(1) of the CWCR, and                       to be below the
 you anticipate that the                            inspection threshold
 production by synthesis of                         level specified in
 UDOCs at your plant site                           Sec.   715.1(d)(1)
 during the current calendar                        of the CWCR. \*\
 year will remain below the
 inspection threshold level
 specified therein).
------------------------------------------------------------------------
\*\ You may submit the Annual Declaration on Past Activities (ADPA)
  described in Sec.   715.1(b)(1), instead of the Change in Inspection
  Status Form, if you anticipate that UDOC production at your plant site
  during the current calendar year will be below the inspection
  threshold level specified in Sec.   715.1(d)(1), but you expect your
  plant site to remain subject to the UDOC declaration requirements in
  Sec.   715.1(a)(1). In this case, the due date for the Annual
  Declaration on Past Activities will be December 15th of the current
  calendar year, instead of February 28th of the next calendar year.

PART 716--[AMENDED]

    5. The authority citation for 15 CFR Part 716 continues to read as 
follows:

    Authority: 22 U.S.C. 6701 et seq.; E.O. 13128, 64 FR 36703, 3 
CFR 1999 Comp., p. 199.

    6. Section 716.1 is amended by adding a new Note 3 to paragraph 
(b)(4) to read as follows:


Sec.  716.1  General information on the conduct of initial and routine 
inspections.

* * * * *
    (b) * * *
    (4) * * *

    Note 3 to Sec.  716.1 (b)(4): Any UDOC plant site that is 
eligible, in accordance with Sec.  715.1(d)(2) of the CWCR, to 
submit a Change in Inspection Status Form or an Annual Declaration 
on Past Activities by December 15th of the current calendar year 
(i.e., a plant site that will be below the inspection threshold 
level indicated in paragraph (b)(4) of this section during the 
current calendar year), but that fails to do so, will remain subject 
to inspection through at least the 90-day period at the beginning of 
the next calendar year.

* * * * *
    7. Section 716.4 is amended by revising paragraph (e) to read as 
follows:


Sec.  716.4  Scope and conduct of inspections.

* * * * *
    (e) Records review. (1) The facility must provide the Inspection 
Team with access to all supporting materials and documentation used by 
the facility to prepare declarations and to otherwise comply with the 
requirements of the CWCR. These supporting materials and documentation 
shall include records related to activities that have taken place at 
the facility since the beginning of the previous calendar year, 
regardless of whether or not the facility has submitted its current 
year Annual Declaration on Past Activities to BIS at the time of the 
inspection. The facility shall also make available for inspection all 
records associated with the movement into, around, and from the 
facility of declared chemicals and their feedstock or any product 
chemicals formed from such chemicals and feedstock. All supporting 
materials and documentation subject to the requirements of this 
paragraph (e) must be retained by the facility in accordance with the 
requirements of Sec.  721.2 of the CWCR. The facility also must permit 
access to and copying of these records, upon request by BIS or any 
other agency of competent jurisdiction, in accordance with the 
requirements of Sec.  721.1 of the CWCR.
    (2) The facility must provide access to these supporting materials 
and documentation in appropriate formats (e.g., paper copies, 
electronic remote access by computer, microfilm, or microfiche), 
through the U.S. Government Host Team to Inspection Teams, during the 
inspection period or as otherwise agreed upon by the Inspection Team 
and Host Team Leader.
    (3) The facility must provide the Inspection Team with appropriate 
accommodations in which to review these supporting materials and 
documentation.
    (4) If a facility does not have access to supporting materials and 
documentation 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 in 
accordance with section 305 of the Act. However, the current owner of a 
facility, upon receiving notification of an inspection (see Sec.  716.5 
of the CWCR), 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.
* * * * *

PART 719--[AMENDED]

    8. The authority citation for 15 CFR Part 719 continues to read as 
follows:

    Authority: 22 U.S.C. 6701 et seq.; 50 U.S.C. 1601 et seq.; 50 
U.S.C. 1701 et seq.; E.O. 12938, 59 FR 59099, 3 CFR 1994, Comp., p. 
950; E.O. 13128, 64 FR 36703, 3 CFR 1999 Comp., p. 199.

    9. Section 719.3 is amended:
    a. By revising the dollar amount ``$11,000'' to read ``$50,000'' in 
paragraph (b) and in the footnote to paragraph (b); and
    b. By revising the parenthetical ``(15 CFR 6.4(a)(3))'' at the end 
of the footnote to paragraph (b) to read ``(15 CFR 6.4(a)(5))''.

PART 721--[AMENDED]

    10. The authority citation for 15 CFR Part 721 continues to read as 
follows:

    Authority: 22 U.S.C. 6701 et seq.; E.O. 13128, 64 FR 36703, 3 
CFR 1999 Comp., p. 199.

    11. Section 721.2 is amended by revising paragraph (a) to read as 
follows:

[[Page 59039]]

Sec.  721.2  Recordkeeping.

    (a) Requirements. Each person, facility, plant site or trading 
company required to submit a declaration, report, or advance 
notification under parts 712 through 715 of the CWCR must retain all 
supporting materials and documentation used by a unit, plant, facility, 
plant site or trading company to prepare such declaration, report, or 
advance notification to determine production, processing, consumption, 
export or import of chemicals. Each facility subject to inspection 
under part 716 of the CWCR must retain all supporting materials and 
documentation associated with the movement into, around, and from the 
facility of declared chemicals and their feedstock or any product 
chemicals formed from such chemicals and feedstock. In the event that a 
declared facility is sold, the previous owner of the facility must 
retain all such 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 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 (see Sec.  
716.4 of the CWCR).
* * * * *

    Dated: October 2, 2006.
Matthew S. Borman,
Deputy Assistant Secretary for Export Administration.
 [FR Doc. E6-16597 Filed 10-5-06; 8:45 am]
BILLING CODE 3510-33-P