The United States maintains export controls on certain chemicals, equipment, materials, software, technology and whole plants to further U.S. foreign policy opposing the proliferation and use of chemical weapons.(1) The United States implements these controls in coordination with the Australia Group (AG), an informal forum of 33 nations cooperating to halt the proliferation of chemical and biological weapons. (See Appendix II for complete list of members.)
The licensing requirements for chemicals, equipment, materials, software, technology and whole plants imposed in accordance with the AG commitments are as follows:
A. The United States requires a license for the export to all destinations, except AG member countries, of the precursor and intermediate chemicals used in the production of toxic chemical warfare agents; relevant process control software; technology for their use, production and/or disposal; and the facilities designed to produce them.
The United States requires a license for the export to specified destinations of certain chemical manufacturing facilities and equipment, toxic gas monitoring systems and detectors that can be used in the production of chemical warfare agents, and technology for the use of such items. The countries to which these licensing requirements apply are indicated in Column CB:3 of the Commerce Country Chart, Export Administration Regulations (EAR), Part 738, Supplement
No. 1, as well as the embargoed destinations identified in EAR Part 746.(2)
The United States also requires a license for the export of any commodity, technology or software when the exporter knows that it will be used in the design, development, production, stockpiling or use of chemical weapons in, or by, specified countries. (Country Group D:3, EAR, Part 740, Supplement No. 1.(3)
The United States may inform the exporter or reexporter that a license is required due to an unacceptable risk that the items will be used in, or diverted to, chemical weapons activities anywhere in the world.
No U.S. person may export, reexport or transfer any item without a license when that person knows that the item will be used in the design, development, production, stockpiling or use of chemical weapons in, or by, a country listed in Country Group D:3. Additionally, no U.S. person may knowingly support such an export, reexport or transfer without a license. "Support" is defined as any action, including financing, transportation or freight forwarding, that facilitates the export, reexport or transfer of these items.
No U.S. person may, without a license, perform any contract, service or employment knowing that it will directly assist in the design, development, production, stockpiling or use of chemical weapons in, or by, a country listed in Country Group D:3.
B. The United States will consider applications for licenses on a case-by-case basis to determine whether the export would make a material contribution to the design, development, production, stockpiling or use of chemical weapons. When the Department of Commerce determines that an export will make such a contribution, the United States will deny the export.
On May 18, 1999, the Department of Commerce published an interim rule in the Federal Register amending the Export Administration Regulations (EAR) to implement the export control and reporting provisions of the Chemical Weapons Convention (CWC, the Convention).(4)Çn Control Initiative (EPCI) of December 13, l990. In so doing, the controls provide the United States with the authority to control the export of any item from the United States when there is a significant risk that it will be used for chemical weapon purposes.
The AG works to further nonproliferation objectives through the harmonization of export controls, the exchange of information and other diplomatic means. In addition to furthering the objectives of the AG, these controls are necessary for U.S. compliance with the CWC, which prohibits the development, production, stockpiling, retention or transfer of chemical weapons. To ensure that State Parties do not transfer chemicals that could assist countries in acquiring chemical weapons, the Convention requires that State Parties restrict the export of the chemicals listed in the Convention's Annex on Chemicals. The controls also support the goals of the 1925 Geneva Protocol for the Prohibition of the Use in War of Asphyxiating, Poisonous or other Gases, and of Bacteriological Methods of Warfare, which prohibits the use of chemical or biological weapons.
1. Probability of Achieving the Intended Foreign Policy Purpose. Many of the items covered by these controls have commercial uses and are widely available from foreign sources. Some of the major sources of these items are in industrialized countries that are members of the AG and Parties to the CWC. While it is not expected that export controls alone can prevent the proliferation of chemical weapons, these controls strengthen U.S. efforts to stem the spread of such weapons and continue to be a significant part of the United States' overall nonproliferation strategy. Accordingly, the Secretary has determined that these controls are likely to achieve the intended foreign policy purpose.
2. Compatibility with Foreign Policy Objectives. In extending these controls, the Secretary has determined that the controls are compatible with the foreign policy objectives of the United States. The United States has a strong interest in remaining at the forefront of international efforts to stem the proliferation of chemical weapons. These controls are compatible with the multilateral export controls for chemicals and related equipment and technology agreed to by the AG. Moreover, the United States has a binding international commitment under the CWC to prohibit and eliminate chemical weapons, and to not assist anyone, in any way, in CW activities.
3. Reaction of Other Countries. The Secretary has determined that the reaction of other countries to these controls by the United States is not likely to render the controls ineffective in achieving their intended foreign policy purpose or to be counterproductive to U.S. foreign policy interests. The United States continues to discuss chemical and biological export controls with countries outside of the AG to advance the goals of nonproliferation. The governments of some developing countries claim that AG export controls discriminate against less industrialized nations by depriving them of goods and assistance in the field of chemical and biological technology. The United States does not believe that the evidence supports this position. In international fora, the United States has sought to dispel this false perception by clarifying the purpose of the controls and by demonstrating that the United States denies very few export requests. All AG members have ratified both the CWC and the Biological Weapons Convention (BWC) and support the full implementation of both treaties.
4. Economic Impact on United States Industry. The Secretary has determined that the potential impact of these export controls on the U.S. position is minimal. In FY 2000, Commerce received 729 license applications, valued at $542 million, for the export or reexport of controlled chemical precursors and equipment. Of these, the United States approved 664 applications, denied one, and RWA'd (returned without action) 52; twelve applications were still pending at the close of FY 2000. The actual trade in these controlled commodities is significantly greater than the value of the license applications because exporters may export many of these commodities to selected countries without a license.
5. Enforcement of Control. The size, dispersion, diversity and specialized nature of the dual-use chemical industry make detecting and investigating potential violations difficult for enforcement personnel. Challenges include distinguishing commercial procurement from chemical weapons-related transactions, establishing appropriate commodity thresholds for targeting and tracking exports and re-exports for verification of end-use and end-users. In addition, enforcement officers may be exposed to personal safety risks when seizing and inspecting chemical materials.
To meet the challenge of effective enforcement of these controls, the Commerce Department has directed resources toward preventive enforcement. (This is in addition to continued efforts to pursue all leads provided by intelligence, industry and other sources on activity of concern.) Analysis of Shipper's Export Declarations helps ensure that the shipments labeled "No License Required" (NLR) are in fact eligible for such treatment. Also, the Commerce Department's extensive outreach program educates companies about export controls related to chemical products and helps prevent the illegal export of dual-use products that can be used to make chemical weapons.
The Commerce Department maintains ongoing interaction with the chemical industry on several levels: through individual companies seeking export licenses; through the Technical Advisory Committees (TACs); and through trade associations. The Commerce Department consults regularly with exporting firms on proposed export transactions and marketing plans to facilitate the thorough, yet prompt, review of export license applications. Through the TACs, the Department of Commerce keeps industry representatives abreast of proposals for the review of items on the control list and gives them the opportunity to provide technical input.
The Department of Commerce works with chemical industry associations, including the American Chemistry Council and the Synthetic Organic Chemical Manufacturers Association, and with other government agencies, such as the Federal Bureau of Investigation and the Department of Defense's Defense Threat Reduction Agency, to gain valuable input regarding CWC implementation and to meet its CWC responsibilities. (See CWC under Section E, "Alternative Means.")
On November 6, 2000, the Department of Commerce, via the Federal Register and via BXA's web page, solicited comments from industry on the effectiveness of foreign policy-based export controls. No comments were received specific to the controls described in this chapter. A more detailed review of the comments is available in Appendix I.
These controls are consistent with the multilateral export control criteria of the AG, which includes many of the world's major chemical producers and traders. In addition, a number of non-AG countries -- including Bulgaria, Russia and Ukraine -- have taken steps to adopt AG-type controls. An important element of the AG's efforts to curb the proliferation of chemical weapons is contacting non-members to encourage them to observe like-minded export controls. The United States continues to encourage harmonization of export control provisions among AG participants to ensure a level playing field for U.S. exporters.
The United States continues to address the problem of the proliferation of chemical weapons on a number of fronts. Direct negotiations with countries intent on acquiring chemical weapons are not likely to prevent the use of U.S.-origin materials in such activities, nor are such negotiations likely to affect the behavior of these countries.
Alternative means to curtail the acquisition and development of chemical warfare capabilities, such as diplomatic negotiations, do not obviate the need for controls. Examples of additional means that the United States has used, and will continue to use, in an attempt to curb the use and spread of chemical weapons include:
U.S. legislation: The Chemical and Biological Weapons Control and Warfare Elimination Act of 1991 (Title III, Pub. L. 102-182) provides for the imposition of sanctions on foreign entities and countries for certain kinds of chemical and biological weapons-related activity. The United States has imposed sanctions on certain entities for chemical weapons-related activities;
The Chemical Weapons Convention: As another tool for stemming the proliferation of chemical weapons, the Convention imposes a global ban on the development, production, stockpiling, retention and use of chemical weapons (CW). The Convention also prohibits the direct or indirect transfers of CW as well as restricting trade in certain chemicals to non-State Parties, and creates an international organization to monitor the destruction of CW and the production of toxic chemicals for industrial, agricultural, medical and other peaceful purposes in countries party to the Convention.
With the enactment of the CWC Implementation Act (CWCIA) on October 21, 1998, the Department is responsible for industry compliance with the Convention. In addition to the final rule implementing the CWC revisions to the EAR published in the Federal Register on
August 7, 1999, the Commerce Department promulgated the Chemical Weapons Convention Regulations (CWCR) addressing data declaration and inspection requirements on
December 30, 1999. Under the CWCR, the Commerce Department collects industry reports regarding the production, processing, consumption, import and export of toxic chemicals for purposes not prohibited by the Convention (e.g., industrial, agricultural and other peaceful purposes) and forwards required information to the Organization for the Prohibition of Chemical Weapons (OPCW). The Commerce Department also escorts inspections by the OPCW of certain U.S. chemical production facilities.
Past reviews conducted by the Department of Commerce revealed that a wide range of AG chemical precursors and production equipment was available from non-AG countries. Non-AG suppliers of precursors and/or related production equipment include Brazil, Chile, Colombia, India, Mexico, China (PRC), South Africa, the countries of the former Soviet Union, Taiwan and Thailand. However, most of these countries have acceded to the CWC and will take steps under this treaty to prevent CW proliferation.
1. Anti-terrorism controls also apply to exports of these items to countries designated by the Secretary of State as state sponsors of terrorism.
2. As of the date of submission of this report, the countries in the Commerce Country Chart CB column 3 included Afghanistan, Armenia, Azerbaijan, Bahrain, Belarus, Bulgaria, Burma, China (PRC), Egypt, Georgia, India, Israel, Jordan, Kazakhstan, North Korea, Kuwait, Kyrgyzstan, Lebanon, Macau, Moldova, Mongolia, Oman, Pakistan, Qatar, Russia, St. Kitts & Nevis, Saudi Arabia, Syria, Taiwan, Tajikistan, Turkmenistan, Ukraine, the United Arab Emirates, Uzbekistan, Vietnam and Yemen.
3. As of the date of submission of this report, the countries in Country Group D:3 included Afghanistan, Armenia, Azerbaijan, Bahrain, Belarus, Bulgaria, Burma, China (PRC), Cuba, Egypt, Georgia, India, Iran, Iraq, Israel, Jordan, Kazakhstan, North Korea, Kuwait, Kyrgyzstan, Lebanon, Libya, Macau, Moldova, Mongolia, Oman, Pakistan, Qatar, Russia, Saudi Arabia, Syria, Taiwan, Tajikistan, Turkmenistan,Ukraine, the United Arab Emirates, Uzbekistan, Vietnam and Yemen.
4. The Convention on the Prohibition of the Development, Production, Stockpiling and Use of Chemical Weapons and on their Destruction (the "Chemical Weapons Convention" or CWC) was ratified by the United States on April 25, 1997, and entered into force on April 29, 1997.
5. A license also is required to export this technology to Iran, Sudan and Syria for antiterrorism (AT) reasons. In addition, this technology was already controlled and subject to denial under existing U.S. regulations for Cuba, Iran, Iraq, Libya, Sudan and North Korea.