United States of America Implementation of Transfers Regime

United States of America Implementation of Transfers Regime under Article VI of the Chemical Weapons Convention (CWC) September 6, 2004 Tracey O’Donnell Director, Information Technology Team Treaty Compliance Division U. S. Department of Commerce

Topics of Discussion • CWC transfer requirements • U. S. legislative and regulatory authorities for implementation of CWC transfer regime • Scope of U. S. transfers regime • U. S. export and import regulations for implementation of CWC transfer regime • U. S. Compliance Activities 2

CWC Transfer Requirements • Prohibition on transfers of Scheduled chemicals – Transfer of any toxic chemical or precursor for prohibited purposes – Exports to and imports from Non-States Parties (NSPs) of Schedule 1 and 2 chemicals – Retransfers of Schedule 1 chemicals 3

CWC Transfer Requirements • Transfer monitoring of Scheduled chemicals – Advanced notifications of Schedule 1 transfers – generally 30 days prior to export or import – Ensure exports to States Parties of Schedule 1 chemicals are used only for research, medical, pharmaceutical or protective purposes – Ensure imports of Schedule 1 chemicals result in a State Party having an aggregate amount of chemicals equal to or less than 1 Metric Ton – Aggregate National Data declaration on exports and imports of Schedule 1, 2 and 3 chemicals – End-Use Certificate requirement for exports of Schedule 3 chemicals to NSPs 4

CWC Transfer Requirements • CWC transfer requirements do not include: – Licensing of exports or imports of: • Schedule 1, 2 and 3 chemicals • Manufacturing or processing equipment or software • Transfers of technical data • However, States Parties should establish a mechanism to enforce CWC prohibitions – U. S. implemented prohibitions by establishing licensing requirements 5

CWC Transfer Requirements • UN Security Resolution 1540 – Maintain effective national export and transshipment controls. . . – Complements Article VI and VII requirement to establish administrative measures to implement and reinforce CWC transfer restrictions 6

U. S. Legal and Regulatory Authorities for Transfer Controls • Legislative measures – Arms Export Control Act – Export Administration Act – CWC Implementation Act • Administrative measures – Export Provisions • Export Administration Regulations • International Traffic in Arms Regulations • CWC Regulations – Import Provisions • Alcohol, Tobacco, Firearms, and Explosives Regulations • CWC Regulations 7

Scope of U. S. Transfer Regime • CWC transfer requirements apply to: – U. S. persons – Declared and undeclared plant sites/facilities – Trading companies 8

U. S. Export Regulations International Traffic in Arms Regulations • U. S. Munitions List • Scheduled chemicals considered defense articles and are generally not commercially traded – All Schedule 1 chemicals, except Ricin and Saxitoxin – Certain Schedule 2 chemicals, i. e. , Amiton, BZ, and certain Schedule 2 B. (4) chemicals • License required for exports to all destinations – No low concentration exemptions 9

U. S. Export Regulations Export Administration Regulations (EAR) – Primary regulation for controlling dual-use exports • Commerce Control List (CCL) – Controls CWC Scheduled chemicals not subject to the ITAR – Establishes low concentration exemptions – Establishes Schedule 1 notification and reporting requirement CWC Regulations (CWCR) – Establishes export reporting requirement for incorporation into Aggregate National Data declaration – Establishes low concentration exemptions – Establishes duplicate Schedule 1 notification requirement 10

U. S. Export Regulations EAR establishes a license requirement to: – Control all toxic chemicals and precursors, regardless whether subject to data monitoring under the CWC, e. g. , inorganic chemicals • Exception to license requirement for certain Scheduled chemicals to certain countries – License required for all exports to embargoed and designated terrorist supporting destinations 11

U. S. Export Regulations EAR establishes a license requirement to: • Implement the prohibition on exports of Schedule 1 and 2 chemicals to NSPs • License applications are subject to a policy of denial • • • Implement prohibition on retransfer of Schedule 1 chemicals Implement requirement to ensure Schedule 1 chemicals exported to States Parties are used only for research, medical, pharmaceutical or protective purposes Implement End-Use Certificate for exports of Schedule 3 chemicals to NSPs – Absent receipt of of EUC, a license is required which is subject to a policy of denial • • Exempt low concentrations of Schedule 2 and 3 chemicals Exempt consumer goods packaged for retail sale for personal use for Schedule 2 and 3 chemicals 12

U. S. Export Regulations • Schedule 3 End-Use Certificate requirements: – All exports to Non-States Parties require an End-Use Certificate, including sample shipments, except mixtures of 30 percent or less – Certificate must be issued by NSP agency responsible foreign affairs or any other agency designated agency – Certificate may cover aggregate quantities against which multiple shipments may be made to a single consignee – Licenses approved for other reasons are conditioned with requirement for End-Use Certificate or license is invalid 13

U. S. Export Regulations • Unilateral Controls: – Controls on production technology for certain Schedule 2 and Schedule 3 chemicals for exports and reexports to NSPs, except Israel and Taiwan • • PFIB Phosgene Cyanogen Chloride Hydrogen Cyanide 14

U. S. Import Regulations • Alcohol, Tobacco, Firearms, and Explosives (ATFE) Regulations – U. S. Munitions “Import” List – Permit is required for imports of certain Schedule 1, 2 and 3 chemicals – Permit is required for import from all countries, except Canada, including all NSPs • CWC Regulations – Establishes prohibition on imports of Schedule 1 and 2 chemicals from NSPs – Establishes import reporting requirement for incorporation into AND declaration – Establishes mixture exemptions 15

CWC Compliance Activities • End-Use Certificates – 200+ End-Use Certificates – – – Verify quantity exported against each Certificate Review licenses issued for other reasons Review Sample Shipment Reports Review CWC Annual Reports on Exports and Imports Referred 10 companies to enforcement authorities for administrative action or civil penalties • Sample Shipment Reports – Determine compliance with CWC Annual Report on Export requirement 16

CWC Compliance Activities • Schedule 1 exports and imports – Verify if each proposed transfer occurred – Notify Technical Secretariat if proposed transfer did not occur • Schedule 1, 2, and 3 chemicals – Verify licenses and other information (e. g. , Customs documents) to determine if export/import occurred and whether a Report was submitted 17

Conclusion • Steps for establishing an export/import AND regime: – Establish clear requirements for controlling exports and imports • List of chemicals • Quantity thresholds • Exemptions • Mechanism for declaring or reporting – Establish compliance program 18

Thank you for your attention. Comments or Questions? 19