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29 March 2007
[Federal Register: March 28, 2007 (Volume 72, Number 59)]
[Rules and Regulations]
[Page 14403-14410]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr28mr07-5]
[[Page 14403]]
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DEPARTMENT OF COMMERCE
Bureau of Industry and Security
15 CFR Parts 710, 715, 716, 719, and 721
[Docket No. 060831231-7030-02]
RIN 0694-AD53
Chemical Weapons Convention Regulations: UDOC ``Change in
Inspection Status Form;'' Amendments to Records Review and
Recordkeeping Requirements; Additions to the List of States Parties to
the Chemical Weapons Convention (CWC)
AGENCY: Bureau of Industry and Security, Commerce.
ACTION: Final rule.
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SUMMARY: The Bureau of Industry and Security (BIS) is publishing this
final 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 Chemical
Weapons Convention (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 final rule amends 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
will 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, will ensure that the plant site is not 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 will 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 rule also amends 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 revises 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 is 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.
This rule amends 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.
Finally, this rule updates the list of countries that currently are
States Parties to the CWC by adding the Central African Republic and
Comoros, which recently became States Parties, and by replacing the
listing for Serbia and Montenegro with a separate listing for each
country.
DATES: This rule is effective March 28, 2007. Although there is no
formal comment period, public comments on this regulation are welcome
on a continuing basis.
ADDRESSES: You may submit comments on this rule, identified by RIN
0694-AD53, by any of the following methods:
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
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 final 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
[[Page 14404]]
Woodard, Office of the Chief Counsel for Industry and Security,
telephone: (202) 482-5301.
SUPPLEMENTARY INFORMATION:
Background
This final rule amends 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 rule also clarifies the scope of the
CWCR records review and recordkeeping requirements. In addition, this
rule updates the maximum civil penalty that may be imposed for
violations of the CWCR restrictions on imports of CWC Schedule 1 and
Schedule 2 chemicals. These changes were included in a proposed rule
and request for comment that BIS published on October 6, 2006 (71 FR
59032). BIS did not receive any public comments on the proposed rule
and is publishing this final rule to implement these changes.
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. 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. Prior to the publication of this final
rule, there was no mechanism in the CWCR that allowed the U.S.
Government to determine which UDOC plant sites were 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 did not become subject to
inspection by the OPCW until the U.S. annual declaration on past
activities had been submitted to the OPCW. BIS recognized that
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 could have the long-term
effect of undermining the verification regime of the CWC.
In order to eliminate this ``90-day gap,'' BIS is amending 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 UDOC production is anticipated to be
below the inspection threshold level). The U.S. Government will then
inform the OPCW that the plant site will not be subject to inspection
during the next calendar year.
Certain plant sites will 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 will 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 will be eligible to use
this option are 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
[[Page 14405]]
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 final rule also amends the CWCR to clarify the scope of the
records review requirements for inspections. Prior to the publication
of this rule, Section 716.4(e) of the CWCR was unclear concerning the
extent to which an OPCW Inspection Team would have access to a
facility's records that were related to activities that took place at
the facility during the previous calendar year. This rule amends
Section 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 final rule amends Section 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. Prior to the publication of
this rule, Section 716.4(e) of the CWCR did not clearly indicate that
facilities were 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 rule amends Section 716.4(e) to clearly
indicate that the facility must make all such records available to the
Inspection Team.
Consistent with the clarification to Section 716.4(e) of the CWCR
described above, this final rule also amends the recordkeeping
provisions in Section 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.
This rule amends 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 amends 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.
Finally, this rule revises Supplement No. 1 to Part 710 of the CWCR
(titled ``States Parties to the Convention on the Prohibition of the
Development, Production, Stockpiling, and Use of Chemical Weapons and
on Their Destruction'') by adding the Central African Republic and
Comoros, which recently became States Parties to the CWC. As a result
of this change, the CWCR declaration and reporting requirements for
these two countries will be the same as those that apply to other
States Parties. In addition, the listing for Serbia and Montenegro is
removed and both countries are now listed, separately. Each country is
now a State Party to the CWC and the United States has recognized
Montenegro as a sovereign state. See Press Release, U.S. Department of
State, U.S. Recognizes Montenegro as Independent State (June 13, 2006),
available at http://www.state.gov/secretary/rm/2006/67839.htm.
Rulemaking Requirements
1. This 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 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
[[Page 14406]]
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 will increase the burden hours under the approved
collection (i.e., Control Number 0694-0091) by amending Section
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 are 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 will not be
subject to inspection during the first 90 days of the next calendar
year. Prior to the publication of this rule, there was no mechanism in
the CWCR that allowed the U.S. Government to determine which UDOC plant
sites were subject to inspection and to notify the OPCW concerning the
inspection status of such plant sites, before 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
did not become subject to inspection by the OPCW until the U.S. annual
declaration on past activities had been submitted to the OPCW.
Universal application of this approach would have interfered 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 could have had 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)
will 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 makes several amendments to the CWCR records review
and recordkeeping requirements, none of which will affect the burden
hours and associated costs under the approved collection (i.e., Control
Number 0694-0091). This rule amends Section 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 Section 716.4(e) of the CWCR, this final rule
amends the recordkeeping provisions in Section 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 amending 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 recordkeeping requirement, because
facilities already maintained and provided access to such records in
order to comply with the 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.
[[Page 14407]]
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 final rule, if
promulgated, would not have a significant economic impact on a
substantial number of small entities for the reasons explained below.
No comments were received on the economic impact of the rule.
Consequently, BIS did not prepare a final regulatory flexibility
analysis.
Small entities include small businesses, small organizations and
small governmental jurisdictions. For purposes of assessing the impact
of this final 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 final rule will 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.
The changes made by this final rule will not affect a substantial
number of small entities. This final rule amends section 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 are
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 will not be subject to inspection during the first 90 days of the
next calendar year.
BIS estimates that, of the 691 facilities, plant sites, and trading
companies that are affected by the declaration and reporting
requirements of the CWCR per calendar year, 600 of these are
unscheduled discrete organic chemical (UDOC) plant sites. Of these 600
UDOC plant sites, BIS estimates that no more than 6 UDOC plant sites
per calendar year will be required to submit a Change in Inspection
Status Form for the purpose of indicating that their annual UDOCs
production will be below the inspection threshold level indicated in
the CWCR. Since BIS can only estimate the total number of small
entities per calendar year that are affected by the declaration and
reporting requirements of the CWCR (i.e., 297 small entities, as
indicated above), BIS must also estimate the number of small entities
that own, operate, or otherwise control UDOC plant sites likely to be
affected by this rule. Therefore, based on the estimate that only 6
UDOC plant sites (out of a total of 600 UDOC plant sites) will be
required to submit a Change in Inspection Status Form each calendar
year, BIS estimates, for the purpose of assessing the impact of this
final rule, that no more than 6 small entities per calendar year will
be affected by this new CWCR requirement. This estimate assumes that
each UDOC plant site that will be affected by this final rule will be
owned, operated, or otherwise controlled by a small entity. Since BIS
estimates that no more than 6 small entities per calendar year will be
affected by this new CWCR requirement, the requirement will not affect
a substantial number of small entities.
Furthermore, the additional recordkeeping and reporting
requirements imposed by this final rule will not have a significant
economic impact on small entities. 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 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). The estimated total
annual cost of this additional collection of information for all
affected entities will be $1,163 (30.6 burden hours x $38/hour). 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. Based on
these estimates, the total cost of these additional recordkeeping and
reporting requirements will represent only a small percentage of the
revenues generated by the affected companies.
Therefore, this final rule will not affect a substantial number of
small entities (no more than 6 UDOC plant sites of an estimated 600,
per annum) and the total economic impact on the affected entities
(i.e., $1,163) will not be significant. Since the revisions that this
rule makes to the CWCR will not impose a significant economic impact on
a substantial number of small entities, BIS has not prepared a final
regulatory flexibility analysis for this rule.
List of Subjects
15 CFR Part 710
Chemicals, Exports, Foreign Trade, Imports, Treaties.
[[Page 14408]]
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 719
Administrative practice and procedure, Chemicals, Exports, Imports,
Penalties.
15 CFR Part 721
Reporting and recordkeeping requirements.
0
Accordingly, Parts 710, 715, 716, 719, and 721 of the Chemical Weapons
Convention Regulations (15 CFR parts 710-729) are amended as follows:
PART 710--[AMENDED]
0
1. The authority citation for 15 CFR part 710 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.
0
2. Supplement No. 1 to Part 710 is amended by revising the undesignated
center heading ``List of States Parties as of March 25, 2006'' to read
``List of States Parties as of November 1, 2006'', by removing the
country ``Serbia and Montenegro'', and by adding in alphabetical order
the countries ``Central African Republic'', ``Comoros'',
``Montenegro'', and ``Serbia''.
PART 715--[AMENDED]
0
3. 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.
0
4. 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 submit an Annual Declaration on Past
Activities, in lieu of a Change in Inspection Status Form, under the
circumstances described in Note 3 to paragraph (d)(2). 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 the 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.
0
5. 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.
0
6. Supplement No. 3 to part 715 is revised to read as follows:
[[Page 14409]]
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 calendar UDOC, A (as year following any
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.*
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, .....................
UDOC, A (as
appropriate), B
(optional).
--Declaration information. ................. --15 calendar days
after change in
information.
--Company information..... ................. --30 calendar days
after change in
information.
--Post-inspection letter.. ................. --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]
0
7. 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.
0
8. 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 paragraph (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.
* * * * *
0
9. 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]
0
10. 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.
[[Page 14410]]
Sec. 719.3 [Amended]
0
11. Section 719.3 is amended:
0
a. By revising the dollar amount ``$11,000'' to read ``$50,000'' in
paragraph (b) and in the footnote to paragraph (b); and
0
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]
0
12. 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.
0
13. Section 721.2 is amended by revising paragraph (a) to read as
follows:
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: March 21, 2007.
Christopher A. Padilla,
Assistant Secretary for Export Administration.
[FR Doc. E7-5594 Filed 3-27-07; 8:45 am]
BILLING CODE 3510-33-P