Ammonium Nitrate Security Program
Federal RegisterAug 3, 2011
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DEPARTMENT OF HOMELAND SECURITY
Office of the Secretary
6 CFR Part 31
[Docket ID 2008-0076]
RIN 1601-AA52
Ammonium Nitrate Security Program
AGENCY:
National Protection and Programs Directorate, DHS
ACTION:
Proposed rule; request for comments.
SUMMARY:
This proposed rule would implement anti-terrorism measures to better secure the homeland. The Department of Homeland Security would regulate the sale and transfer of ammonium nitrate pursuant to section 563 of the Fiscal Year 2008 Department of Homeland Security Appropriations Act with the purpose of preventing the use of ammonium nitrate in an act of terrorism. This proposed rule seeks comment on both proposed text for such a regulation and on several practical and legal issues integral to the development of an Ammonium Nitrate Security Program.
DATES:
Comments and related material must either be submitted to our online docket via
http://www.regulations.gov
on or before December 1, 2011 or reach the Docket Management Facility by that date. Comments sent to DHS or the Office of Management and Budget (OMB) on collection of information must reach DHS or OMB on or before October 3, 2011.
ADDRESSES:
You may submit comments, identified by docket number 2008-0076, by one of the following methods:
•
Federal eRulemaking Portal:
Follow the instructions at
http://www.regulations.gov
for submitting comments.
•
Mail:
U.S. Department of Homeland Security, National Protection and Programs Directorate, Infrastructure Security Compliance Division (NPPD/ISCD), 245 Murray Lane, SW., Mail Stop 0610, Arlington, VA 20598-0610.
To avoid duplication, please use only one of these methods. For instructions on submitting comments, see the “Public Participation” portion of the
SUPPLEMENTARY INFORMATION
section below.
Collection of Information Comments:
If you have comments on the collection of information discussed in section IV.F (“Paperwork Reduction Act”) of this Notice of Proposed Rulemaking (NPRM), you may submit comments to the DHS as indicated above, and you may also send comments to the Office of Information and Regulatory Affairs (OIRA), OMB. Comments on the collection of information must reach DHS or OIRA on or before October 3, 2011. To ensure that your comments to OIRA are received on time, the preferred methods are by e-mail to
oira_submission@omb.eop.gov
(include the docket number and “Attention: Desk Officer for Department of Homeland Security/NPPD” in the subject line of the e-mail) or fax at 202-395-6566. An alternate, though slower, method is by U.S. mail to the Office of Information and Regulatory Affairs, Office of Management and Budget, 725 17th Street NW., Washington, DC 20503, Attention: Desk Officer for Department of Homeland Security/NPPD.
FOR FURTHER INFORMATION CONTACT:
Ammonium Nitrate Security Program Manager, U.S. Department of Homeland Security, National Protection and Programs Directorate, Infrastructure Security Compliance Division (NPPD/ISCD), 245 Murray Lane, SW., Mail Stop 0610, Arlington, VA 20598-0610, telephone number (703) 235-5263.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Public Participation
II. Background: Overview of Subtitle J and Associated Regulatory Development Activities
A. Subtitle J
B. October 2008 Report to Congress
C. Advance Notice of Proposed Rulemaking
D. Research Efforts and Findings
1. Security Hazards Presented by Use of Ammonium Nitrate
2. Detonability of Ammonium Nitrate
3. Federal Regulations Addressing Ammonium Nitrate
a. Chemical Facility Anti-Terrorism Standards
b. U.S. Coast Guard Maritime Security Regulations
c. Transportation Security Administration
d. Bureau of Alcohol, Tobacco, Firearms and Explosives
e. Department of Transportation Hazardous Materials Regulations
f. Department of Commerce
4. State Regulations Addressing Ammonium Nitrate
5. Voluntary Programs Addressing Ammonium Nitrate
III. Discussion of Proposed Rule: Implementing Subtitle J
A. Ammonium Nitrate Subject to Subtitle J Requirements
1. Mixture Requirement
2. Threshold Weight and Individual Products Exemptions
3. Explosives Exemption
B. Requirements for the Registration of AN Sellers and AN Purchasers
1. Overview
2. Who Must Register
3. Registering AN Sellers
4. Registering AN Facility Representatives
5. Registering a Designated AN Facility POC
6. Summary of AN Facility Personnel Registration Proposals
7. Registering AN Purchasers
8. Federal/State/Tribal/Local Government-Owned Entities That Are AN Facilities or AN Purchasers
9. Registration Process
10. Initial Applications
11. Applicant Vetting Process
12. Notification of Approval or Denial
13. Revocation of Registration Numbers
14. Appealing Registration Denials and Registration Revocations
15. Registration Updates and Expiration
16. Initial Six-Month Registration Period
C. Purchaser Verification Activities
1. Overview
2. Manner of Sale or Transfer of Ammonium Nitrate
3. Required Verification Activities
4. Verification of the Currency and Authenticity of a Prospective AN Purchaser's AN Registered User Number
5. Verification of a Prospective AN Purchaser's Identity When the AN Purchaser Opts Not To Use An Agent
6. Verification of a Prospective AN Purchaser's Identity When the AN Purchaser Opts To Use An Agent
7. For Sales Involving Agents, Verification That the Agent Is Acting on Behalf of the AN Purchaser
8. Verification of the Agent's Identity Based on the Visual Check of the Agent's Photo Identification
9. Timing of Verification Activities
10. Departmental Role in Verification Process
11. Purchaser Verification Portal
12. Purchaser Verification Call Center
13. Purchaser Verification Portal and Call Center
14. Suspicious Purchases and Attempted Purchases of Ammonium Nitrate
D. Recordkeeping
1. Overview
2. Entities Responsible for Keeping Records
3. Records To Be Kept
4. Length of Retention of Records
5. Format and Storage of Records
E. Reporting of Theft or Loss of Ammonium Nitrate
1. Overview
2. Who Must Report Theft or Loss
3. Level of Theft or Loss Warranting Reporting
4. Process for Reporting Theft or Loss
F. Inspections and Audits
G. Guidance Materials and Posters
H. Civil Penalties, Civil Penalty Adjudications, and Civil Penalty Appeals
I. Consultation Requirements
J. Delegation of Authority
IV. Regulatory Analyses
A. Executive Order 12866 and Executive Order 13563: Regulatory Planning and Review
1. Cost Impacts
2. Benefits of the Ammonium Nitrate Security Program
B. Regulatory Flexibility Act
1. Reasons for and Objectives of the Proposed Rule
2. Affected Small Business Population and Estimated Impact of Compliance
3. Number of Small Entities That Purchase Ammonium Nitrate
4. Number of Small Entities That Sell Ammonium Nitrate
5. Alternatives Considered
6. Average Costs per AN Facility
7. Identification of Duplication, Overlap and Conflict With Other Federal Rules
C. Executive Order 13132: Federalism
D. Unfunded Mandates Reform Act
E. National Environmental Policy Act
F. Paperwork Reduction Act
G. International Trade Impact Assessment
Abbreviations and Terms Used in This Document
AN Ammonium Nitrate
ANFO Ammonium Nitrate/Fuel Oil
ANPRM Advance Notice of Proposed Rulemaking
ATF Bureau of Alcohol, Tobacco, Firearms, and Explosives
ATSA Aviation and Transportation Security Act
CFATS Chemical Facility Anti-Terrorism Standards
CFR Code of Federal Regulations
COI Chemical of Interest
CVI Chemical-terrorism Vulnerability Information
DHS Department of Homeland Security
DOT Department of Transportation
EAR Export Administration Regulations
FBI Federal Bureau of Investigation
FR
Federal Register
HMR Hazardous Materials Regulations
HMT Hazardous Materials Table
IED Improvised Explosive Device
IRFA Initial Regulatory Flexibility Analysis
MTSA Maritime Transportation Security Act
NAICS North American Industrial Classification System
NPRM Notice of Proposed Rulemaking
PCII Protected Critical Infrastructure Information
PHMSA Pipeline and Hazardous Materials Safety Administration
POC Point of Contact
QATT Qualified Anti-Terrorism Technology
RFA Regulatory Flexibility Act
SAFETY Support Anti-Terrorism By Fostering Effective Technologies
SBA Small Business Administration
SORN System of Records Notice
SSI Sensitive Security Information
TSA Transportation Security Administration
TSDB Terrorist Screening Database
TWIC Transportation Worker Identification Credential
UMRA Unfunded Mandates Reform Act
USC United States Code
USCG United States Coast Guard
USDA United States Department of Agriculture
VSL Value per Statistical Life
I. Public Participation
Interested persons are invited to participate in this rulemaking by submitting written data, views, or arguments on all aspects of this NPRM. The Department of Homeland Security (DHS or the Department) also invites comments that relate to the economic, environmental, or federalism effects that may result from this NPRM. Comments that will provide the most assistance to the Department in developing this proposed rule will refer to a specific provision of the NPRM or the Secure Handling of Ammonium Nitrate provisions in the Homeland Security Act, as amended, explain the reason for any comments, and include other information or authority that supports such comments.
Submission of Sensitive Information:
Do not submit comments that include trade secrets, confidential commercial or financial information, Chemical-terrorism Vulnerability Information (CVI), Protected Critical Infrastructure Information (PCII), or Sensitive Security Information (SSI) to the public regulatory docket. Please submit such comments separately from other comments on the proposed rule. Comments containing this type of information should be appropriately marked as containing such information and submitted by mail to the following address: U.S. Department of Homeland Security, National Protection and Programs Directorate, Infrastructure Security Compliance Division (NPPD/ISCD), 245 Murray Lane, SW., Mail Stop 0610, Arlington, VA 20598-0610.
Upon receipt of such comments, DHS will not place the comments in the public docket and will handle them in accordance with applicable safeguards and restrictions on access. DHS will hold them in a separate file to which the public does not have access, and place a note in the public docket that DHS has received such materials from the commenter. If DHS receives a request to examine or copy this information, DHS will treat it as any other request under the Freedom of Information Act (FOIA), 5 U.S.C. 552, and the Department's FOIA regulation found in Part 5 of Title 6 of the Code of Federal Regulations (CFR).
Instructions:
All submissions must include the agency name and docket number for this rulemaking. All comments received will be posted without change to
http://www.regulations.gov,
including any personal information provided.
Docket:
For access to the docket to read background documents or comments received, go to
http://www.regulations.gov.
II. Background: Overview of Subtitle J and Associated Regulatory Development Activities
A. Subtitle J
Section 563 of the Fiscal Year 2008 Department of Homeland Security Appropriations Act amends the Homeland Security Act of 2002 and directs DHS to “regulate the sale and transfer of ammonium nitrate by an ammonium nitrate facility * * * to prevent the misappropriation or use of ammonium nitrate in an act of terrorism.”
See
Public Law 110-161, Division E (2007). Section 563 amends the Homeland Security Act of 2002 (6 U.S.C. 361
et seq.
) by adding in a new Subtitle J—Secure Handling of Ammonium Nitrate, sections 899A-899J (to be codified from 6 U.S.C. 488 to 6 U.S.C. 488i). All references to 6 U.S.C. 488-488i throughout this document refer to the corresponding sections in the Homeland Security Act of 2002, as amended by section 563 of the Fiscal Year 2008 Department of Homeland Security Appropriations Act. All references to “Subtitle J” throughout this document refer to Subtitle J of the Homeland Security Act of 2002, as created by the Fiscal Year 2008 Department of Homeland Security Appropriations Act.
Pursuant to Subtitle J, the Department must develop regulations that require, at a minimum, the following activities:
•
Registration Applications:
Certain ammonium nitrate sellers and prospective ammonium nitrate purchasers must apply for ammonium nitrate (AN) registration numbers from DHS in order to sell, transfer, and/or purchase ammonium nitrate.
See
6 U.S.C. 488a(c) and 6 U.S.C. 488a(d).
•
Terrorist Screening Database Checks:
The Department must use identifying information of each prospective applicant to conduct a check against identifying information that appears in the Terrorist Screening Database (TSDB).
See
6 U.S.C. 488a(i)(2)(A).
•
Registration Numbers:
The Department generally must issue an ammonium nitrate registration number or deny the registration of an applicant within 72 hours of receipt of each ammonium nitrate seller's or ammonium nitrate purchaser's complete registration application.
See
6 U.S.C. 488a(i)(3)(A).
•
Purchaser Verification Activities:
At the point of sale, ammonium nitrate sellers must verify each potential ammonium nitrate purchaser's identity and registration to purchase ammonium nitrate pursuant to procedures
established by the Department.
See
6 U.S.C. 488a(e)(2)(D).
•
Recordkeeping:
All ammonium nitrate facilities must keep records of sales or transfers of ammonium nitrate for at least two years after each transaction.
See
6 U.S.C. 488a(e)(1) and 6 U.S.C. 488a(e)(2).
•
Reporting Theft or Loss of Ammonium Nitrate:
Certain ammonium nitrate sellers must report the theft or loss of ammonium nitrate to Federal authorities within one calendar day of discovery of theft or loss.
See
6 U.S.C. 488d.
•
Inspections and Audits:
The Department must conduct or oversee regulatory compliance inspections and audits of ammonium nitrate facilities' records, monitor compliance with the requirements of Subtitle J, and deter or prevent misappropriation of ammonium nitrate for use in terrorist acts.
See
6 U.S.C. 488b.
•
Guidance Materials and Posters:
The Department must develop guidance materials that set forth procedures for appealing denial of an application for an ammonium nitrate registration number, guidance materials that help ammonium nitrate facilities identify suspicious ammonium nitrate purchases or attempted purchases or transfers, and posters providing information on sellers' record-keeping responsibilities and on the penalties for violating requirements under the Department's ammonium nitrate program.
See
6 U.S.C. 488a(i)(4)(c) and 6 U.S.C. 488c(c).
•
Establishing Threshold Percentage of Ammonium Nitrate in a Mixture:
The Department must establish a threshold percentage of ammonium nitrate in a mixture for that mixture to be regulated under the Department's ammonium nitrate program.
See
6 U.S.C. 488a(b).
•
Appeals and Penalties:
The Department must establish an expedited appeals process for applicants denied ammonium nitrate registration numbers, as well as an appeals process for individuals assessed civil penalties for violating the rules promulgated under Subtitle J.
See
6 U.S.C. 488a(i)(4) and 6 U.S.C. 488e(d).
B. October 2008 Report to Congress
In an Explanatory Statement accompanying section 563 of the Fiscal Year 2008 Department of Homeland Security Appropriations Act the Chairman of the House Committee on Appropriations indicated a desire for the Department's National Protection and Programs Directorate to “provide a plan to implement [Subtitle J], including analysis of the resources required to do so, and a proposal for reallocating funding within the National Protection and Programs Directorate for doing so.”
See
Explanatory Statement Submitted by Mr. Obey, Chairman of the House Committee on Appropriations, Regarding the Consolidated Appropriations Amendment of the House of Representatives to the Senate Amendment to H.R. 2764, 153 Cong. Rec. H15741, H16092 (2007), available at
http://www.gpo.gov/fdsys/pkg/CREC-2007-12-17/pdf/CREC-2007-12-17-bk2.pdf.
In October 2008, the Department submitted to Congress a report in response to this Explanatory Statement, outlining possible approaches to implementing Subtitle J and the potential costs associated with each approach. The Department's report to Congress has aided in evaluating many of the approaches contained in this NPRM. The Department's report can be found in the docket for this NPRM, which is available at
http://www.regulations.gov.
C. Advance Notice of Proposed Rulemaking
DHS published an Advance Notice of Proposed Rulemaking (ANPRM) titled “Secure Handling of Ammonium Nitrate Program” on October 29, 2008.
See
73 FR 64280. The ANPRM solicited public comment on the following specific issues:
• Comments regarding submission of registration applications (
e.g.,
whether applications should be submitted electronically or in paper form; whether applications should be available only through DHS or through Local Cooperative Extension offices or at United States Post Offices);
• Comments regarding the technical capabilities (
e.g.,
access to computers; access to the Internet; average level of computing skills; frequency of use of integrated Information Technology systems) of ammonium nitrate manufacturers, distributors, sellers, and end-users;
• Comments regarding DHS distribution of ammonium nitrate registration letters or certificates (
e.g.,
whether DHS should use e-mail or regular mail);
• Comments regarding a verification process for registrations and ammonium nitrate purchases, including methods for verifying the identity of any ammonium nitrate purchaser, as well as the identity of designated agents purchasing ammonium nitrate on behalf of registered ammonium nitrate purchasers;
• Comments on the detonability of ammonium nitrate at certain concentrations, including research being conducted concerning the detonability of ammonium nitrate;
• Comments on how likely ammonium nitrate fertilizer users would be to use an alternative fertilizer that is potentially less detonable, such as Sulf-N® 26 Fertilizer Process and Product (ammonium sulfate nitrate fertilizer) which DHS recently Designated as a Qualified Anti-Terrorism Technology (QATT) pursuant to 6 U.S.C. 441-444 (the Support Anti-terrorism by Fostering Effective Technologies Act of 2002, or SAFETY Act).
See
http://www.safetyact.gov
;
• Comments on how best to conduct or oversee regulatory compliance inspections and audits of ammonium nitrate facilities' records to ensure that regulated ammonium nitrate facilities are properly maintaining records, to monitor compliance with the requirements of Subtitle J, and to deter or prevent misappropriation of ammonium nitrate for use in terrorist acts;
• Comments on the economic impacts (both long-term and short-term, quantifiable and qualitative) of the implementation of Subtitle J, including potential impacts on State, local, and tribal governments of the United States; potential impacts on agri-business, including ammonium nitrate manufacturers, importers, packagers, distributors, retailers, and end-users including farmers (
e.g.,
whether current ammonium nitrate purchasers would likely reduce their ammonium nitrate purchases as a result of a new regulatory regime); and potential impacts on small businesses;
• Comments on the monetary and other costs anticipated to be incurred by U.S. citizens and others as a result of the new compliance requirements, such as the costs in time and money that an individual may incur to obtain an ammonium nitrate registration number. These costs may or may not be quantifiable and may include actual monetary outlays, transitional costs incurred to obtain alternative documents, and the costs that will be incurred in connection with potential delays at the point of sale;
• Comments on a possible fee structure to address some or all of the costs of this new program, such as registration, TSDB checks, and issuance of ammonium nitrate registration numbers;
• Comments on the benefits of this rulemaking;
• Comments on any alternative methods of complying with Subtitle J; and
• Comments on the best methods or processes for interacting with state and local governments regarding ammonium nitrate security.
See
73 FR 64280, 64281, section IV—Questions for Commenters.
DHS received comments from 33 organizations and individuals. The majority of the submissions, 20, were from private companies and trade associations, including associations affiliated with the farming, explosives, and mining industries. Three universities provided comments, as did three government agencies. Six individuals, including one farmer, also submitted comments.
The topics addressed by the commenters covered a wide range of issues. The two issues that received the most attention were the registration process and the feasibility of using substances other than ammonium nitrate in agricultural operations. DHS received 15 comments concerning the registration process; all 15 commenters wanted the registration process to be as simple and straightforward as possible. Some commenters stated that if a registration process were to be implemented, then a registrant should receive his/her approval from DHS within 72 hours. The commenters expressed differing views on the technological capabilities of the regulated community. Some argued that computer use was sufficiently common for the entire process to be automated through an Internet-based portal. As articulated by these comments, an online process would be fast, inexpensive, and could be structured to allow individuals to apply from their homes or places of business. Others argued that computers are not common enough among ammonium nitrate users, who would either be forced to travel to different locations to register or to invest in computers. This second group of commenters believed that registration through an Internet-based portal would constitute an unjustified burden.
Many commenters believed that regulating ammonium nitrate and not other types of fertilizer will cause a decrease in ammonium nitrate usage because of an expected rise in its cost. There was no agreement on the degree to which the cost of ammonium nitrate use would change, but multiple commenters indicated that cost would be passed along the supply chain until it ultimately reaches end-users. If the cost of ammonium nitrate were to go up, commenters hypothesized that ammonium nitrate alternatives may become preferable. Some comments suggested that continued ammonium nitrate use is based on historical ammonium nitrate use and that using an alternative would have no noticeable effect on operations. Others argued the opposite, stating that alternative fertilizers would not serve the needs of certain crops equally well. Commenters from certain States where ammonium nitrate is regularly used in agricultural operations indicated that ammonium nitrate is the best choice for nitrogen application for certain crops. Other commenters, however, asserted that viable alternatives exist with respect to the majority of crops for which ammonium nitrate currently is used as a fertilizer.
There was a general consensus among commenters regarding the need to avoid duplication of other Federal licensing, regulatory, and inspection programs. Commenters stated that to be registered under the ammonium nitrate program could be unnecessary for individuals already registered under related regulatory programs covering ammonium nitrate use, such as DHS's Chemical Facility Anti-Terrorism Standards (CFATS), Department of Transportation (DOT) hazardous materials regulations, and Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) regulations. These commenters noted that ATF's inspection process also could be used for ammonium nitrate inspections under this program to minimize inconvenience to ammonium nitrate users.
A number of commenters indicated that some ammonium nitrate is normally lost as bulk ammonium nitrate moves through the supply chain. Commenters noted, for example, that equipment used for transporting bulk ammonium nitrate, such as hoppers, bins, and railcars are not shift-proof, resulting in incidental spillage of ammonium nitrate prills, which are the small, bead-like pellets of ammonium nitrate typically used in the manufacturing, transportation, and bulk use of ammonium nitrate. Additionally, commenters noted that there is normally loss during movement throughout the supply chain due to melting or solidification of ammonium nitrate prills based on nothing more than ambient temperature and humidity. For instance, commenters noted that in a 90-ton railcar shipment, it is not unusual for these phenomena to result in loss of 200-500 pounds of ammonium nitrate. This may result because ammonium nitrate is hygroscopic in nature (
i.e.,
it readily absorbs moisture). When ammonium nitrate prills come into contact with ambient moisture in the air, the prills may cake or meld together, which can simultaneously increase the overall mass of bulk ammonium nitrate while reducing its overall volume. These properties cause significant difficulty in accounting for ammonium nitrate on a fine scale. Consequently, these commenters stated that DHS should not require ammonium nitrate users to report losses of magnitudes normally encountered during ammonium nitrate use and transport.
Several commenters addressed the threshold quantity or percentage composition of ammonium nitrate triggering regulation under this program. The universities that commented on the ANPRM addressed the use of ammonium nitrate in scientific research, while other commenters addressed the use of ammonium nitrate as a component of cold packs. These commenters stated that the quantities of ammonium nitrate used in scientific research and in cold pack manufacturing are so small that persons conducting scientific research or purchasing and selling cold packs should not be subjected to a rigorous regulatory scheme. Several commenters also recommended that DHS should exempt mixtures containing ammonium nitrate that ATF classified “explosives.”
In developing this NPRM, DHS carefully considered all public comments submitted in response to the ANPRM. DHS will respond to the issues raised therein when responding to the comments received on this NPRM.
D. Research Efforts and Findings
In support of the effort to develop regulations to implement Subtitle J, the Department has examined and considered research into a variety of topics including the security hazards presented by the use of ammonium nitrate; its detonability; existing Federal and State ammonium nitrate programs; and voluntary security programs. In the course of conducting this research, the Department reviewed numerous materials, including, but not limited to, the following:
• A. Bauer, R.D. Heater & J.H. Paterson, Queen's Univ. Mining Eng'g Dep't, The Sensitivity of Ammonium Nitrate Melts and Solutions to Projectile Impact (1981).
• A. King & A. Bauer, Queen's Univ. Mining Eng'g Dep't, Shock Initiation Characteristics of Ammonium Nitrate (1980).
• R.W. Van Dolah, F.C. Gibson & J.N. Murphy, U.S. Dep't of Interior, Bureau of Mines, Further Studies on Sympathetic Detonation, Report of Investigations 6903 (1966).
• R.W. Van Dolah, F.C. Gibson & J.N. Murphy, U.S. Dep't of Interior, Bureau of Mines, Sympathetic Detonation of Ammonium Nitrate and Ammonium Nitrate-Fuel Oil, Report of Investigations 6746 (1966).
• J.J. Burns, G.S. Scott, G.W. Jones & Bernard Lewis, U.S. Dep't of Interior, Bureau of Mines, Investigations on the Explosibility of Ammonium Nitrate, Report of Investigations 4994 (1953).
Information about these materials can be found in the docket for this NPRM. The Department seeks public comment on whether or not there are additional studies or other research materials the Department should consider in support of the development of the final regulations as well as any copies of such studies or research materials.
1. Security Hazards Presented by Use of Ammonium Nitrate
Ammonium nitrate is a chemical that exists in multiple concentrations and physical forms, and different concentrations and forms have different security implications. In the United States, the principal uses for ammonium nitrate are as a fertilizer or as part of an explosive mixture. Ammonium nitrate can be sensitized (made more sensitive to shocks, and thus easier to detonate) with the addition of organic material. One common example is when fertilizer-grade ammonium nitrate is mixed with fuel oil and creates an explosive mixture known as Ammonium Nitrate/Fuel Oil (ANFO). The fuel oil acts as an energy source. Both ammonium nitrate fertilizers and ANFO have been misused in acts of terrorism to cause catastrophic damage to human health, safety, national security, the economy, and critical infrastructure.
Nationwide, fertilizer-grade ammonium nitrate is commonly used in agricultural operations and the chemical and explosives industries.
See
A. King & A. Bauer, 4. Due to its availability in small-scale packaging (
e.g.,
50-pound bags), ammonium nitrate is susceptible to theft and misuse in making improvised explosive devices (IEDs).
Over the years, ammonium nitrate has been used as an explosives component in terrorist attacks, both domestically and internationally. The 1995 Murrah Federal Building attack in Oklahoma City claimed the lives of 168 individuals and demonstrated how ammonium nitrate could be misused to perpetrate deadly terrorist attacks.
See
Oklahoma City National Memorial, A Look at the Numbers,
http://www.oklahomacitynationalmemorial.org/secondary.php?section=5&catid=145&id=83
(last visited Aug. 11, 2010). The Provisional Irish Republican Army also used ammonium nitrate as part of its London bombing campaign in the early 1980s.
See
Boyce Rensberger, Ammonium Nitrate Explosives Are Simple, Easily Made, Widely Used in Industry, Wash. Post, Apr. 21, 1995, at A28. More recently, ammonium nitrate was used in the 1998 East African embassy truck bombings, killing hundreds and injuring thousands at the U.S. embassies in Dar es Salaam, Tanzania, and Nairobi, Kenya.
See
Corky Siemaszko, Wtc Chemicals In Kenya Blast (Aug. 14, 1998),
http://www.nydailynews.com/archives/news/1998/08/14/1998-08-14_wtc_chemicals_in_kenya_blast.html
(last visited May 11, 2011). Ammonium nitrate was also used in a November 2003 series of truck bombings in Turkey, killing over 50 individuals and injuring an additional 700 individuals at multiple locations across Istanbul.
See
Lauren Johnston, CBSNews.com, Fertilizer Used in Terror Bombs (Apr. 14, 2004),
http://www.cbsnews.com/stories/2004/04/14/world/main611898.shtml
(last visited Aug. 11, 2010). Additionally, since the events of 9/11, stores of ammonium nitrate have been confiscated during raids on terrorist sites around the world, including raids on sites in Canada (
see
Steve Schippert, Threats Watch, Canada Raid Breaks Cell: 3 Tons of Explosives Found (June 3, 2006),
http://threatswatch.org/inbrief/2006/06/canada-raid-breaks-cell-3-tons/
(last visited Aug. 11, 2010)), England (
see
BBC News, Ammonium Nitrate ‘Easy to Find’ (Mar. 30, 2004),
http://news.bbc.co.uk/2/hi/uk_news/3582921.stm
(last visited Aug. 11, 2010)), and the Philippines (
see
U.S. Dep't of State, Office of the Coordinator for Counterterrorism, Country Reports on Terrorism 2005, p. 78).
2. Detonability of Ammonium Nitrate
It is understood that under proper conditions pure (unblended) ammonium nitrate is detonable. Making reliable explosives from ammonium nitrate is simplified through the addition of a fuel component with which it can react. In addition, though rare, accidental explosions have occurred during the manufacture, storage, and transport of ammonium nitrate.
See
J.J. Burns, G.S. Scott, G.W. Jones & Bernard Lewis, 1. Despite the explosive hazard presented by ammonium nitrate, however, it has been successfully and safely used for decades as a fertilizer.
See
R.W. Van Dolah, F.C. Gibson & J.N. Murphy; Report of Investigations 6746, 2. There is little scientific consensus about the critical diameter of an explosive required for detonation and the size of the conventional explosive charge (
i.e.,
booster) necessary to detonate unblended ammonium nitrate. These questions about detonability all receive research attention today, and have also received research attention in the past.
See
A. Bauer, R.D. Heater & J.H. Paterson, 1, 5 (1981). Preliminary results of ongoing research suggest that unblended ammonium nitrate can be difficult to detonate with any reliability. To date, terrorists typically have employed combinations of ammonium nitrate and fuel oil when utilizing ammonium nitrate in terrorist attacks.
To better understand the detonability of ammonium nitrate and its use in explosives, the Department reviewed, and considered the results of, a study conducted by Sandia National Laboratory. Due to the detailed nature of its content and findings, however, this study, which is “For Official Use Only,” is not available to the public. The Department has also consulted with the Federal Bureau of Investigation's (FBI) Explosives Unit. This consultation helped the Department to understand the detonability of unblended ammonium nitrate, the detonability of ammonium nitrate mixtures, and the role ammonium nitrate plays in IED construction and terror-related activities.
The Department seeks public comment on the detonability of ammonium nitrate.
3. Federal Regulations Addressing Ammonium Nitrate
In developing this proposed rule, DHS reviewed other Federal regulations that cover portions of the ammonium nitrate supply chain or deal with identity verification; a number of these other regulations are discussed below. DHS examined these regulations for potential overlap with the proposed Ammonium Nitrate Security Program. In developing this NPRM, the Department collaborated with many of its Federal security partners in an attempt to harmonize this proposed rule with other regulatory regimes.
a. Chemical Facility Anti-Terrorism Standards
In addition to the authority granted to DHS by Subtitle J, the Department had authority under section 550 of the Homeland Security Appropriations Act of 2007, Pub. L. 109-295, to issue regulations governing the security of high-risk chemical facilities. Under that authority, the Department promulgated an interim final rule titled the Chemical Facility Anti-Terrorism Standards (CFATS), 6 CFR part 27.
See
72 FR 17688 (April 9, 2007). Under CFATS, the Department regulates the security of high-risk chemical facilities, including high-risk chemical facilities that possess ammonium nitrate.
To help the Department identify high-risk chemical facilities under CFATS,
the Department adopted a list of chemicals of interest (COI) as Appendix A to CFATS.
See
72 FR 65396 (November 20, 2007). Any chemical facility that possesses any COI at or above the applicable screening threshold quantity specified in Appendix A for that COI must complete and submit to DHS certain consequence-based information via an online tool called the Chemical Security Assessment Tool Top-Screen. Any chemical facility preliminarily determined to be high-risk after DHS review of the chemical facility's Top-Screen must then meet additional security-related requirements under CFATS. Due to the risks ammonium nitrate may pose if either (1) exploded on-site, or (2) stolen or diverted to produce IEDs, ammonium nitrate (in both explosive and specified fertilizer forms) is one of over 300 COI that DHS listed in Appendix A to CFATS.
See
72 FR 65407-65408, 65410.
Although Subtitle J and CFATS share a goal of preventing terrorism risks associated with ammonium nitrate, the scopes and methods of regulation under Subtitle J and CFATS are very different. The CFATS rule—which addresses hundreds of chemicals in addition to ammonium nitrate—is directed at the security of high-risk chemical facilities. The CFATS rule does not, however, impose any limitations on the sale or transfer of ammonium nitrate. By contrast, Subtitle J does not address the physical security of ammonium nitrate facilities but does impose certain conditions on the sale or transfer of ammonium nitrate (
e.g.,
requiring that ammonium nitrate may only be transferred between registered ammonium nitrate sellers and registered ammonium nitrate purchasers (or purchasers' agents)).
In developing the rule required by Subtitle J, DHS intends to draw on information gained under the CFATS program about ammonium nitrate, and will work to ensure that CFATS and the new Subtitle J program complement each other. For additional discussion of the CFATS program's interaction with the proposed ammonium nitrate rule, see section III.A.1 of this NPRM.
b. U.S. Coast Guard Maritime Security Regulations
The U.S. Coast Guard (USCG) regulates ammonium nitrate under multiple programs. Under the Maritime Transportation Security Act (MTSA), 46 U.S.C. 70101
et seq.,
USCG has authority to regulate security both aboard maritime vessels and at facilities located in, under, or adjacent to any waters subject to the jurisdiction of the United States. Through its MTSA regulations, USCG regulates the security of vessels transporting ammonium nitrate, as well as the security of certain facilities that store, manufacture, use, or distribute ammonium nitrate. In addition, USCG regulates the transportation of ammonium nitrate, and the loading or unloading of ammonium nitrate from vessels at any waterfront facility.
See
33 CFR part 126 (regulating the handling of ammonium nitrate at waterfront facilities, and establishing penalties for handling ammonium nitrate without a permit); 46 CFR 148.01-7 (regulating the bulk shipment of ammonium nitrate).
USCG has also designated as a “Certain Dangerous Cargo” any ammonium nitrate that is not certain dangerous cargo residue.
See
33 CFR 160.204. Based on this designation, each vessel carrying ammonium nitrate on bodies of water other than certain portions of inland rivers must submit a Notice of Arrival prior to arrival in port.
See
33 CFR part 160, subpart C. The Notice of Arrival must contain certain information, including the name of the vessel's owner and operator, the names of the last five ports or places visited, the amount of ammonium nitrate on board, and information pertaining to each crewmember aboard.
See
33 CFR 160.206. Owners and operators of U.S.-flagged vessels carrying ammonium nitrate in bulk must have, and must operate in compliance with, USCG-approved vessel security plans.
See
33 CFR 104.410. Likewise, owners and operators of facilities that receive vessels carrying ammonium nitrate in bulk must have and operate in compliance with USCG-approved facility security plans.
See
33 CFR 105.410.
c. Transportation Security Administration
The Transportation Security Administration (TSA) has broad authority over security of all modes of transportation. These authorities are found primarily in the Aviation and Transportation Security Act of 2001 (ATSA), Public Law 107-71, which regulates the transportation of cargo, including ammonium nitrate. ATSA broadly allows TSA to “exercise * * * powers, relating to transportation security as [TSA] considers appropriate.”
See
49 U.S.C. 114. TSA exercises its authority under ATSA in part by performing threat assessments on truck drivers who must receive Hazardous Materials Endorsements in order to be authorized to transport ammonium nitrate.
d. Bureau of Alcohol, Tobacco, Firearms, and Explosives
ATF, a principal law enforcement agency within the U.S. Department of Justice, is dedicated to preventing terrorism, reducing violent crime, and protecting our nation. Among its authorities, under 27 CFR part 555, ATF is responsible for regulating the use of explosives, which are defined by inclusion in ATF's annual List of Explosive Materials, ATF Publication 5400.8.
See
75 FR 1085 (Jan. 8, 2010) (notice of annual list). While ATF does not consider ammonium nitrate an explosive, ammonium nitrate explosive mixtures and ANFO are included in ATF's list of explosive materials. ATF regulations require that no person, other than a licensee or permittee, knowingly transport or receive any explosive material (including ANFO).
See
27 CFR 555.26(a). Section III.A.3 of this NPRM discusses the interaction of ATF regulations with the proposed ammonium nitrate rule.
e. Department of Transportation Hazardous Materials Regulations
The Federal Hazardous Materials Transportation Law (Federal Hazmat Law, 49 U.S.C. 5101
et seq.
) authorizes the Secretary of Transportation to “prescribe regulations for the safe transportation, including security, of hazardous material in intrastate, interstate, and foreign commerce.” The Secretary of Transportation has delegated this authority to Pipeline and Hazardous Materials Safety Administration (PHMSA). PHMSA, through its Hazardous Materials Regulations (HMR; 49 CFR Parts 171-180), prescribes transportation requirements for hazardous materials, including ammonium nitrate.
The Hazardous Materials Table (HMT; 49 CFR 172.101) lists several shipping descriptions for ammonium nitrate and ammonium nitrate mixtures or solutions. These descriptions vary based on the properties of the particular ammonium nitrate at issue. As such, a shipment of ammonium nitrate may be classed and regulated as a Division 1.1D explosive, Division 5.1 oxidizer, or Class 9 miscellaneous hazardous material. For transport in commerce these materials must comply with all applicable HMR requirements (
e.g.,
packaging, shipping papers, marking, labeling, placarding, security plans, emergency response information, training, etc.).
f. Department of Commerce
Under the Export Administration Regulations (EAR), the U.S. Department
of Commerce's Bureau of Industry and Security regulates the export and re-export of ammonium nitrate. A “re-export” is the shipment or transmission of an item subject to the EAR from one foreign country (
i.e.,
a country other than the United States) to another foreign country. A re-export also occurs when there is release of technology or software subject to the EAR to a foreign national outside the United States.
See
15 CFR 734.2, and 15 CFR part 772 (definition of “re-export”).
Specifically, under the EAR, licensees are authorized to export or re-export ammonium nitrate only to certain countries listed in the EAR, and consistent with the terms of the issued export license.
See
15 CFR 742.6 and 15 CFR 747.3. Under the EAR, ammonium nitrate is defined to include fertilizers and fertilizer blends containing more than 15% by weight ammonium nitrate, except liquid fertilizers (containing any amount of ammonium nitrate) or dry fertilizers which contain less than 15% by weight ammonium nitrate.
See
15 CFR part 774, Supplement 1 for item-specific export licensing information. Individuals involved in the domestic sale or transfer of ammonium nitrate, as defined by DHS, at U.S.-based exporters of ammonium nitrate would be required to register with the Department under the proposed Ammonium Nitrate Security Program.
4. State Regulations Addressing Ammonium Nitrate
Virtually all 50 States regulate ammonium nitrate in some manner, based on its use either as a fertilizer, an explosive, or both. Although not in universal agreement, relevant State regulations typically define ammonium nitrate as an ammonium and nitrate mixture containing not less than 33 percent nitrate; require purchasers and sellers of ammonium nitrate to register with a governing State body; and require sellers of ammonium nitrate to maintain records of sales of ammonium nitrate for at least two years. Many State regulations grant State officials both the authority to inspect facilities possessing or distributing ammonium nitrate and the authority to fine or otherwise penalize facilities or individuals who fail to comply with regulations concerning ammonium nitrate.
5. Voluntary Programs Addressing Ammonium Nitrate
In addition to efforts required by existing Federal and State regulations, many producers, distributors, and users of ammonium nitrate have undertaken voluntary efforts to secure the ammonium nitrate supply chain. Chief among these voluntary efforts is the “America's Security Begins With You” program. This program is a voluntary “know-your-customer” program developed jointly by the ATF and members of the fertilizer industry following the 1995 attack on the Alfred P. Murrah Federal Building in Oklahoma City. The Department believes that, in many instances, voluntary programs already in place can serve as good building blocks for meeting regulatory requirements. The Department seeks comments providing details on voluntary programs related to ammonium nitrate security and how they could potentially be leveraged by ammonium nitrate users to meet the requirements of the proposed rule.
III. Discussion of Proposed Rule: Implementing Subtitle J
What follows is a discussion of the approach DHS is proposing to take in implementing Subtitle J. Where appropriate, potential alternative approaches are also discussed. DHS welcomes public comment on the proposed rule, and also on potential alternative approaches.
The cost to the public of this proposed rule ranges from $300 million to $1.041 billion over 10 years at a 7% discount rate. The primary estimate is the mean which is $671 million. For comparison, at a 3% discount rate, the cost of the proposed rule ranges from $364 million to $1.3 billion with a primary (mean) estimate of $814 million. The average annualized cost for the program ranges from $43 million to $148 million (with a mean of $85 million), also employing a 7% discount rate. The following two tables present the summary discounted total and annualized costs for the rule.
OMB Accounting Statement of Annualized Costs and Benefits Program Years 1-10)
3 Percent discount rate
Primary
estimate
(millions)
Minimum
estimate
(millions)
Maximum
estimate
(millions)
7 Percent discount rate
Primary
estimate
(millions)
Minimum
estimate
(millions)
Maximum
estimate
(millions)
Costs
Annualized Monetized Costs
$95.4
$42.7
$148.1
$95.5
$42.7
$148.2
Benefits
Qualitative (un-quantified) Benefits
Reduced vulnerability to terrorist attack using ammonium nitrate.
Summary of Costs ($ Millions, 7 Percent Discount Rate)—by Program Year
Registration
Appeals
Point of sale
Recordkeeping
Audits/
inspections
Federal costs
* Total cost
PY1
18.9
0.1
67.5
6.2
0.4
9.8
102.7
PY2
4.4
0.0
62.6
4.4
0.4
6.5
78.2
PY3
4.3
0.0
58.4
4.1
0.4
6.0
73.2
PY4
4.2
0.0
54.7
3.8
0.4
5.7
68.7
PY5
4.2
0.0
51.1
3.6
0.3
5.3
64.4
PY6
8.9
0.0
48.1
3.4
0.3
5.1
65.8
PY7
6.8
0.0
44.6
3.1
0.3
4.7
59.5
PY8
6.7
0.0
41.7
3.0
0.3
4.4
56.0
PY9
6.6
0.0
39.0
2.8
0.2
4.2
52.6
PY10
6.5
0.0
36.4
2.6
0.2
3.9
49.5
Total
71.3
0.1
503.8
36.8
3.0
55.3
670.6
* Reporting of Thefts rounds to zero in individual years and are omitted from this table but included in the total and regulatory analysis.
DHS also conducted a break-even analysis that examines the required reduction in the potential frequency of terrorist attacks involving ammonium nitrate. The proposed rule would be cost effective if it resulted in a reduction in attack frequency by at least one attack the size of the Oklahoma City bombing (which occurred 16 years ago) per 14 years. For discussion of this analysis, and for explanation of other cost calculations, please see section IV of this NPRM, which discusses various regulatory analyses conducted by DHS.
A. Ammonium Nitrate Subject to Subtitle J Requirements (See Section 31.105 of the Proposed Rule)
This section will address the definition of ammonium nitrate. Congress has defined ammonium nitrate for purposes of
Subtitle J
to include “solid ammonium nitrate that is chiefly the ammonium salt of nitric acid and contains not less than 33 percent nitrogen by weight.”
See
6 U.S.C. 488(1)(A). DHS proposes to use this definition of solid ammonium nitrate in section 31.105 of the proposed rule.
Also included in the definition of ammonium nitrate for purposes of Subtitle J is “any mixture containing a percentage of ammonium nitrate that is equal to or greater than the percentage determined by [DHS].”
See
6 U.S.C. 488(1)(B). In establishing this mixture percentage for purposes of Subtitle J, the Department was required to consult with the heads of appropriate Federal departments and agencies, including the Secretary of Agriculture, and to provide notice and an opportunity for comment.
See
6 U.S.C. 488a(b). That consultation is discussed below.
This section will also discuss the Department's consideration of a minimum threshold amount of ammonium nitrate that would have to change hands as part of a sale or transfer before that sale or transfer (including the individuals participating in the transaction) would be subject to Subtitle J's requirements. This section will also discuss the Department's discretionary ability to exempt from regulation “a person producing, selling, or purchasing ammonium nitrate exclusively for use in the production of an explosive under a license or permit issued under chapter 40 of title 18, United States Code.”
See
6 U.S.C. 488a(f).
1. Mixture Requirement
Mixtures containing high percentages of ammonium nitrate can be effectively used in bomb-making. By proposing to include a mixture requirement in the Ammonium Nitrate Security Program, the Department is seeking to capture under this rule mixtures that terrorist bomb-makers would be most interested in acquiring. To assist in determining an appropriate threshold percentage of ammonium nitrate in a mixture for purposes of Subtitle J, the Department reviewed multiple detonability studies, examined mixture requirements employed by other Federal and State regulatory programs, and consulted with a variety of Federal, State, and private sector entities. Based on this research and after consultation with the FBI's Explosives Unit, the Department proposes to define ammonium nitrate in section 31.105 to include any mixture that is 30 percent or more ammonium nitrate by weight. By setting the mixture requirement at 30 percent, the Department believes the proposed rule will capture those ammonium nitrate mixtures that could be most effectively used in bomb-making, or that could be most effectively retooled or reconfigured for use in bomb-making.
The Department is aware that this proposed mixture requirement differs from the mixture requirements used for ammonium nitrate under CFATS. Under CFATS, a mixture containing ammonium nitrate is counted towards the screening threshold quantity for ammonium nitrate if ammonium nitrate makes up 33 percent or more of the mixture. Therefore, this proposed mixture requirement for this rule would apply more broadly than the mixture requirement in CFATS; the ammonium nitrate mixtures covered under this proposed requirement would include ammonium nitrate mixtures containing between 30 and 33 percent ammonium nitrate by weight, while CFATS' mixture requirements do not cover mixtures containing between 30 and 33 percent ammonium nitrate by weight.
There are two main reasons for the difference between the CFATS approach to ammonium nitrate mixtures and the proposed Ammonium Nitrate Security Program approach to mixtures. First, the two mixture requirements exist to accomplish different goals. The CFATS mixture requirements exist to help the Department identify potentially high-risk chemical facilities subject to CFATS. The CFATS mixture requirements are not an assertion by the Department that only ammonium nitrate mixtures containing 33 percent or more ammonium nitrate are vulnerable to misuse in acts of terrorism. The proposed Ammonium Nitrate Security Program mixture requirement, however, is solely meant to identify ammonium nitrate mixtures that have the potential to be misused in acts of terrorism. Accordingly, a more conservative and inclusive mixture requirement is appropriate for Subtitle J.
Second, during the development of this proposed rule, the Department obtained information from the Department of Justice, indicating that under certain circumstances, experiments that have shown that mixtures containing as low as 30 percent ammonium nitrate by weight can be used as components of viable explosives. This information was unavailable to DHS when it wrote and published the CFATS mixture requirements. In light of this evidence and the purpose for which the Subtitle J mixture requirement is being established, the Department believes that setting the proposed mixture requirement at 30 percent ammonium nitrate is the correct course of action.
The Department's proposed mixture requirement would exempt persons and entities from coverage under the proposed rule only to the extent that they possess or obtain mixtures containing less than 30 percent ammonium nitrate by weight. The proposed requirement would not exempt persons and entities from coverage to the extent that they possess or obtain solid ammonium nitrate which they intend to incorporate into ammonium nitrate mixtures. The Department thus proposes that the purchase, sale, transfer, or acquisition of solid ammonium nitrate to be incorporated into mixtures will be treated the same as the purchase, sale, transfer, or acquisition of ammonium nitrate not to be incorporated into mixtures.
The Department is interested in receiving comments on this proposed approach, including comments on the Department's proposal to define ammonium nitrate to include any mixture that is 30 percent or more ammonium nitrate by weight. DHS requests comments addressing the appropriateness of this percentage, comments addressing whether it would be more appropriate to express this percentage as a percentage of mixture weight or as a percentage of mixture volume, and comments discussing whether a higher or lower mixture percentage would be more appropriate. The Department is also interested in comments addressing possible consumer and retail impacts of the proposed mixture requirement, and on the detonability of ammonium nitrate and ammonium nitrate mixtures of varying percentages.
2. Threshold Weight and Individual Products Exemptions
The Department's understanding is that, outside of small sample or research quantities, ammonium nitrate is primarily sold either in bulk or in pre-packaged bags containing no less than 50 pounds of ammonium nitrate. Mixtures that contain small percentages or amounts of ammonium nitrate are also found in various retail products, including home and garden products (
e.g.,
fertilizer mixtures) and cold packs.
Under Subtitle J, the Department has authority to regulate transactions (and the individuals conducting them) involving any amount of ammonium nitrate. The Department is proposing to establish a threshold weight to which the regulation would apply, and is considering whether the marginal security benefits gained from regulating transactions involving de minimis quantities of ammonium nitrate are outweighed by the costs of regulating those transactions. Similarly, the Department is considering whether the security benefits gained from regulating transactions involving products packaged such that they are unlikely to be used to make an explosive are outweighed by the costs of regulating those transactions. To avoid capturing these transactions under its regulatory regime, and to avoid complicating ammonium nitrate transactions that may only pose a de minimis security risk, the Department is considering applying both a minimum threshold weight and an individual products exemption for cold packs to this rulemaking.
The Department is considering establishing a threshold weight whereby each transaction would be subject to Subtitle J's regulatory requirements only if the transaction involves the sale, transfer, or purchase of ammonium nitrate that, in the aggregate, is equal to or greater than the threshold weight. Specifically, section 31.105 of the proposed rule contains a 25 pound threshold weight. The Department believes that this weight is low enough to prevent a bad actor from easily acquiring a sufficient quantity of ammonium nitrate to pose a terrorist threat. The Department also believes that this weight is high enough to avoid capturing small laboratory quantities of ammonium nitrate or transactions involving other de minimis quantities of ammonium nitrate that are unlikely to be misappropriated for use in a terrorist act. The Department believes that such de minimis quantities are unlikely to be misappropriated for use in a terrorist act due to the large number of transactions in de minimis quantities that would be required to accumulate sufficient ammonium nitrate to construct an explosive that poses a significant terrorist threat. This threshold should also reduce the economic impact of the Ammonium Nitrate Security Program by avoiding regulation of those transactions that present de minimis security risk.
In order to determine the utility of this approach, the Department solicits comments on the manners in which ammonium nitrate is sold and packaged, the manners and frequencies of use of ammonium nitrate in small quantities, and the utility of setting a threshold weight. The Department additionally requests comments addressing the appropriateness of the proposed 25 pound threshold weight. Specifically, the Department asks whether another threshold weight, such as 5 pounds, 10 pounds, 50 pounds, or another quantity, would better achieve the desired results of the proposed rule.
If the Ammonium Nitrate Security Program does include a threshold weight, DHS proposes that the threshold weight would apply to mixtures as well as to unblended ammonium nitrate. As such, the proposed rule would apply to an ammonium nitrate mixture only if (1) the mixture weighs at least the threshold weight, and (2) the mixture contains at least 30 percent ammonium nitrate by weight. Both conditions would need to be satisfied in order for the proposed rule to apply to a given mixture.
The Department proposes that when applying the threshold weight to an ammonium nitrate mixture, the total weight of the mixture should be counted, as opposed to just the weight of the ammonium nitrate in the mixture. In other words, all ten pounds of a single ten-pound bag (or all ten pounds of ten one-pound bags) of fertilizer mixture containing 30 percent ammonium nitrate by weight would count towards the threshold weight, and not just the three pounds which is the weight of the ammonium nitrate portion of that mixture. The Department believes this approach would be more effective at preventing a bad actor from acquiring sufficient quantities of ammonium nitrate than would an alternative approach under which only the ammonium nitrate content of a mixture is counted towards threshold weight. The Department solicits comments on the utility and manner of application of the proposed threshold weight to mixtures containing ammonium nitrate.
In addition to including a threshold weight in the proposed rule, the Department is proposing to exempt cold packs containing ammonium nitrate from regulation. In section 31.105 of the proposed rule the Department proposes to define a “cold pack” as a small, commercially-available package commonly used as a replacement for ice in the application of first aid, containing unmixed water and ammonium nitrate that, immediately prior to use, can be manipulated to cause the comingling of the water and the ammonium nitrate resulting in an endothermic reaction that significantly lowers the temperature of the package. For the following reasons, DHS does not believe that Congress intended the people and facilities buying and selling cold packs to be regulated by Subtitle J.
The Department believes that the security benefits obtained from regulating sales and transfers of cold packs would be minimal and outweighed by significant impact on the general public. Cold packs individually contain extremely small amounts of ammonium nitrate such that collecting very large numbers of them would be necessary in order to obtain enough ammonium nitrate to produce a dangerous explosive device.
The Department also believes that regulating sales and transfers of cold packs would impose substantial economic impacts on the public, which would not be justified by the minimal security benefit gained by cold packs regulation. Specifically, DHS is concerned that regulation of cold packs would have serious and negative impacts on the provision of first aid, first responders, and the medical sector generally. These substantial impacts would be spread over a large variety of retail stores, medical facilities, health care providers, athletic teams, regulated industries that require first aid kits containing cold packs, and individuals using cold packs for personal first aid purposes. A preliminary examination indicates that the potential affected populations could easily exceed six million individuals, businesses, and organizations or public entities. Complicating the issue is the fact that many cold pack manufacturers do not use ammonium nitrate in their products—many manufactures assemble cold packs that contain other chemicals instead of ammonium nitrate. Cold pack purchasers or sellers might not know which chemicals are present in the cold packs they obtain, prior to obtaining them, which could complicate their abilities to comply with any regulatory requirements.
For these reasons, the Department does not believe that Congress intended cold packs—or the sporting goods stores, recreational centers, schools, and other entities that purchase or sell
them—to be covered under Subtitle J. DHS requests comments describing the populations that could be impacted by cold packs regulation, including comments discussing those populations' abilities to comply with the proposed regulatory requirements.
The Department's proposed cold packs exemption would exempt persons and entities from coverage under the rule only to the extent that they purchase, sell, or transfer cold packs containing ammonium nitrate. The proposed rule would not exempt persons and entities (such as manufacturers of cold packs) from coverage to the extent that they purchase or transfer ammonium nitrate which they intend to incorporate into cold packs. The Department thus proposes that the purchase, sale, transfer, or acquisition of ammonium nitrate to be incorporated into cold packs will be treated the same as the purchase, sale, transfer, or acquisition of ammonium nitrate not to be incorporated into cold packs.
The Department solicits comments on these proposed exemptions. The Department also solicits comments describing uses for ammonium nitrate other than as a fertilizer, a cold packs component, or an explosives ingredient. DHS solicits comments on whether any other uses of ammonium nitrate warrant exemptions.
3. Explosives Exemption
The Department has the discretion to exempt from regulation persons and facilities producing, selling, transferring, or purchasing ammonium nitrate exclusively for use in the production of explosives under a license or permit issued under the Federal explosives laws, 18 U.S.C. Chapter 40, and associated regulations.
See
6 U.S.C. 488a(f).
ATF is responsible for enforcing federal explosives laws and has established regulations for doing so.
See
27 CFR Part 555. ATF's regulatory authority over a facility or individual licensed to use an ammonium nitrate-based explosive is limited to ammonium nitrate that (1) has been mixed with a fuel (
i.e.,
ANFO) which is defined in 27 CFR 555.11 as an “explosive” and (2) is contained on ATF's List of Explosive Materials. Unblended ammonium nitrate, however, is not defined as an explosive under 27 CFR part 555, and thus ATF does not regulate ammonium nitrate that has not been mixed with a fuel oil, outside of the limited separation distance requirements governing the storage of ammonium nitrate when stored in the vicinity of other high explosives and blasting agents, as set forth in 27 CFR 555.220. This is the case even where unblended ammonium nitrate is being produced, purchased, or stored by a facility regulated by ATF as a manufacturer of ANFO. It is also the Department's understanding that facilities producing ANFO typically have inventories of ammonium nitrate on hand for use in manufacturing ANFO, while entities engaged solely in the re-sale or purchase of ANFO are unlikely to possess any ammonium nitrate other than that which is contained within ANFO mixtures.
The Department is considering three possible approaches for regulating individuals and facilities involved in the production of ANFO. These approaches are summarized in the following table, and discussed thereafter.
Option 1
Option 2
Option 3
Would DHS opt to exempt individuals and facilities that purchase, sell, or transfer ammonium nitrate solely for use in the production of explosives?
No
Yes
Partial Exemption.
Brief description of option
Ammonium nitrate transactions would be regulated by DHS whether or not the ammonium nitrate purchased, sold, or transferred has been combined with fuel oil to create ANFO
Ammonium nitrate purchases, sales, or transfers by individuals and facilities solely to enable use of ammonium nitrate in the production of explosives would not be regulated by DHS
Ammonium nitrate combined with fuel oil (ANFO) would not be regulated by DHS.
Would DHS regulate ammonium nitrate mixtures that are “explosives” subject to ATF regulation (i.e., ANFO)?
Yes
No
No.
What duplication would result from this option?
Individuals and facilities would be subject to regulation by both DHS under Subtitle J and ATF under the Federal explosives laws
Individuals and facilities regulated by ATF under the Federal explosives laws would not be regulated by DHS. No duplication would result
Certain facilities (e.g., those that produce ANFO) would be subject to both DHS and ATF regulations.
What gaps would result from this option?
No gaps in coverage of ammonium nitrate as it moves through the supply chain
Could create a considerable gap in regulatory coverage throughout the ammonium nitrate supply chain, as ATF regulations apply solely to ANFO and not the ammonium nitrate used to create it
Compromise approach closes gaps in security of the ammonium nitrate supply chain.
The first option is to apply the final rule implementing Subtitle J to individuals and facilities that purchase, sell, or transfer ammonium nitrate for use in the production of explosives. Under this approach, such individuals and facilities would be subject to regulation by both DHS under Subtitle J and ATF under the Federal explosives laws. By not exempting ammonium nitrate used in explosives from coverage, DHS would be treating all individuals and facilities who purchase, sell, or transfer ammonium nitrate—whether as part of ANFO mixtures or not—the same. This approach would ensure that there are no gaps in coverage of ammonium nitrate as it moves through the supply chain—ammonium nitrate would be captured under DHS's ammonium nitrate program both before and after being combined with fuel oil to create ANFO, and would be captured under ATF's regulations after being
combined with fuel oil to create ANFO. The major disadvantage of not exempting ammonium nitrate used in explosives is that individuals and facilities who purchase, sell, or transfer ammonium nitrate for the purpose of manufacturing explosives would be subject to potentially duplicative regulatory requirements, including two sets of licensing requirements, two sets of recordkeeping requirements, two sets of point of sale requirements, and inspections by both ATF and DHS. In response to the October 29, 2008 ANPRM, some commenters expressed concern over these potentially repetitive regulatory requirements.
The second option is to entirely exempt from Subtitle J requirements facilities and persons that purchase, sell, or transfer ammonium nitrate solely for use in the production of explosives, as they are already regulated by ATF. In this model, facilities and persons that are licensed by ATF to mix ammonium nitrate with fuel to create ANFO, but that do not purchase, sell, or transfer ammonium nitrate for other purposes and do not perform ammonium nitrate application services, would not be subject to the rule implementing Subtitle J. The primary advantage of this approach is that it would prevent potentially duplicative regulatory requirements from applying to ammonium nitrate facilities and individuals that are already subject to ATF regulations. This approach, however, could create a considerable gap in regulatory coverage throughout the ammonium nitrate supply chain, as ATF regulations apply solely to ANFO and not the ammonium nitrate used to create it. For example, facilities that produce ammonium nitrate to sell to manufacturers of ANFO but who themselves do not produce ANFO would be subject to neither ATF nor DHS regulation under this approach. Similarly, stores of ammonium nitrate at facilities producing ANFO would not be subject to any regulatory requirements (
e.g.,
recordkeeping requirements, reporting of theft or loss requirements) by DHS or ATF under this approach. This would create regulatory gaps in the ammonium nitrate supply chain which could be exploited by terrorists.
The third option would exempt from regulation ammonium nitrate mixtures that are “explosives” subject to ATF regulation (
i.e.,
ANFO). DHS is proposing this option in section 31.305 of the proposed rule. Under this approach, entities and individuals that purchase, sell, or transfer ANFO, but who do not produce ANFO or possess ammonium nitrate for other reasons, would be exempt from all Subtitle J requirements and would be subject solely to ATF regulation. Individuals producing ANFO, however, would be subject to the Subtitle J requirements, as they, by necessity, possess ammonium nitrate (which they possess as unblended ammonium nitrate before combining it with fuel oil to make ANFO). This approach recognizes both the fact that ATF already regulates ANFO, as well as the fact that ATF's jurisdiction is limited such that ATF does not regulate the ammonium nitrate used by facilities to make ANFO. Through this compromise approach, individuals and entities whose ammonium nitrate-related operations are already regulated by ATF are spared the duplicative DHS oversight that would result from the first option (discussed above), while gaps in security of the ammonium nitrate supply chain that would be created by the second option (discussed above) are avoided. The primary drawback of this approach is that it would make certain facilities (
e.g.,
those that produce ANFO) subject to both DHS and ATF regulations. To minimize this impact, the Department and ATF currently are discussing ways to coordinate inspections and other compliance activities for these ammonium nitrate facilities, and will work together to ensure that there is minimal duplication of effort or burden caused by this approach, if adopted.
The Department welcomes comments on this proposed approach to ammonium nitrate produced, bought, sold, or transferred exclusively for the purpose of producing explosives. The Department also welcomes comments on any other exemptions that it should consider.
B. Requirements for the Registration of AN Sellers and AN Purchasers (See Sections 31.200-31.250 of the Proposed Rule)
1. Overview
Pursuant to 6 U.S.C. 488a(c), 6 U.S.C. 488a(d), 6 U.S.C. 488e(a)(3)(A), and 6 U.S.C. 488e(a)(3)(B), the Department must establish a process by which persons owning or operating “AN Facilities” and persons intending to purchase ammonium nitrate must register with the Department. Section 31.105 of the proposed rule defines an “AN Facility” as any person or entity that produces, sells, or otherwise transfers ownership of, or provides application services for, ammonium nitrate. The Department proposes to define “application services” in section 31.105 as the physical deposit of fertilizer onto turf, fields, crops, or other agricultural property, where these services are provided by an individual or entity other than the person or entity owning or operating the property upon which the fertilizer is deposited. The Department is interested in receiving comments on these definitions, as well as all other definitions included in the proposed rule.
The proposed registration process would include conducting a check of appropriate identifying information of any person seeking to register against identifying information that appears in the Terrorist Screening Database. Accordingly, prospective applicants would be required to provide specific identifying information to the Department. Appearance in the TSDB is grounds for denial of a registration number (an “AN Registered User Number”). In section 31.220(a)(1) of the proposed rule, the Department proposes to develop an online web portal through which individuals will apply for AN Registered User Numbers. The Department proposes that AN Registered User Numbers will be disseminated to successful applicants via e-mail or through the DHS web portal. The Department also proposes in section 31.235 to make AN Registered User Numbers valid for a period of five years. Additional proposals on who would be required to register and on various aspects of the registration process are discussed in the following paragraphs. The Department seeks public comment on its proposed registration methodology, on other methods the Department may consider for registration, and on the length of time registration numbers should remain valid.
2. Who Must Register
6 U.S.C. 488a(c)(1)(A) and 6 U.S.C. 488e(a)(3)(B) require owners and operators of AN Facilities (including facilities that provide ammonium nitrate application services) to register with the Department. For the reasons provided below, the Department proposes in section 31.200 that any person who may individually perform a sale or transfer of ammonium nitrate on behalf of an AN Facility would be required to register as an owner or operator. Registered AN Facility personnel (whether owners or operators) involved with sales, transfers, or provision of application services are collectively referred to in the proposed rule as “AN Sellers,” of which “AN Facility Representatives” and “Designated AN Facility Points of Contact (POCs)” are subsets that have special responsibilities under the proposed rule. “AN Facility Representatives” are any AN Facility
personnel, be they owners or operators, designated to act on behalf of an AN Facility for purposes of compliance with this rule. A “Designated AN Facility POC” is the AN Facility Representative designated by an AN Facility to act as the primary point of contact with the Department on behalf of the AN Facility for purposes of compliance with this rule.
6 U.S.C. 488a(d) and 6 U.S.C. 488e(a)(3)(A) also require anyone who intends to purchase ammonium nitrate to register with the Department. The proposed rule refers to these individuals as “AN Purchasers.”
Additional details on the registration of AN Sellers, AN Facility Representatives, Designated AN Facility POCs, and AN Purchasers follow. The Department welcomes public comment on the usefulness of these registration categories.
DHS also welcomes public comment discussing other potential registration categories. DHS is interested in comments addressing the benefits and costs of potentially registering organizations in addition to the registration of individual persons. The Department's proposed rule would require only the registration of individual persons, although DHS is interested in receiving comments addressing what benefits and costs, if any, there would be in requiring registration of organizations involved in ammonium nitrate sales, transfers, or application services. DHS is interested in receiving comments addressing which types of organizations (if any) should register—organizations affiliated with AN Facilities, organizations affiliated with AN Purchasers, both, or neither. The Department also invites comments addressing organizational structures, and whether different registration requirements should apply to organizations with different ownership, governance, or operational structures. The Department also seeks comments discussing potential ways in which organizational registration could take place.
3. Registering AN Sellers
6 U.S.C. 488a(c)(1)(A) and 6 U.S.C. 488e(a)(3)(B) require persons who own and persons who operate AN Facilities to register with the Department. DHS believes that Subtitle J's registration requirements for AN Facility personnel will be satisfied if AN Facilities designate AN Sellers, AN Facility Representatives, and/or Designated AN Facility POCs to register and perform the sale, transfer, and application service responsibilities discussed elsewhere in this NPRM. The Department proposes to require only those owners and operators actually involved in sales, transfers, or application services to register. DHS is also considering, however, whether Subtitle J requires all owners to register. DHS welcomes comments on this issue and the benefits and costs imposed by a registration requirement for various types of owners. We understand that some would consider it overly burdensome to require all owners or operators of AN Facilities to register, because not all owners or operators are involved in or have influence over their organizations' ammonium nitrate operations, and because not all owners or operators have the capability to cause ammonium nitrate misappropriation.
Some AN Facilities, such as those owned by large companies, may have many persons who could be considered owners under 6 U.S.C. 488a(c)(1)(A) and 6 U.S.C. 488e(a)(3)(B). The Department requests comment on who should be required to register to fulfill Subtitle J's owner registration requirements for these types of facilities. DHS also requests comment describing how registration of various owners would or would not fulfill the objective of Subtitle J—“to prevent the misappropriation or use of ammonium nitrate in an act of terrorism.”
See
6 U.S.C. 488a(a).
The Department is also interested in obtaining more information about individuals who operate (but do not own) AN Facilities, particularly at AN Facilities where owners themselves are not involved in day-to-day operations and do not personally sell, transfer, or perform application services for ammonium nitrate. Operators include employees or other persons who could act on behalf of a facility in conducting sales and transfers, such as sales clerks, cashiers, sales managers, and persons who provide ammonium nitrate transportation services (
e.g.,
delivery truck drivers) or application services. Enabling operator registration is consistent with the Department's authority under 6 U.S.C. 488a(a) and 6 U.S.C. 488e(a)(3)(B), and is necessary in order to ensure that persons with the ability to sell, transfer, or provide application services for ammonium nitrate are not terrorists. DHS welcomes comments on which operators involved in the sale and transfer of ammonium nitrate, or involved in ammonium nitrate application services, should be required and why they should be required to register with the Department.
In light of the Department's understanding of the roles of AN Facility owners and operators, DHS is proposing that several categories of individuals register as “AN Sellers”:
(1) Any individual who has an ownership interest in an AN Facility may register as an AN Seller.
(2) Any individual designated to act on behalf of an AN Facility for purposes of compliance with this regulation would be required to register as an AN Seller, such as, possibly, a site manager, sales manager, or corporate officer.
(3) Any individual involved in the sale or transfer of ammonium nitrate on behalf of an AN Facility would be required to register as an AN Seller, such as a sales clerk or cashier.
(4) Any individual performing ammonium nitrate application services on behalf of an AN Facility would be required to register as an AN Seller.
DHS proposes that every sale, transfer, or provision of ammonium nitrate application services would have to be conducted by a registered individual (or by multiple registered individuals). Accordingly, while every AN Facility will be required to have at least one AN Seller registered with the Department, not every individual with job at an AN Facility would have to register to be an AN Seller. These proposals would largely give AN Facilities the flexibility to seek registration of and to conduct business with the personnel of their choosing, while also ensuring that all sales, transfers, and application services are conducted by individuals who have been vetted by and registered with the Department.
DHS is proposing that within the category of AN Sellers there be a subcategory of individuals called “AN Facility Representatives.” The qualifications and responsibilities of AN Facility Representatives will be discussed in the following section. AN Sellers who are not AN Facility Representatives would have authority to perform all of the regulatory activities that owners or operators must perform pursuant to Subtitle J (
e.g.,
verifying the identities of prospective AN Purchasers, recording the details of completed sales, and handing over possession of ammonium nitrate to approved AN Purchasers), but would not be responsible for ensuring that other AN Facility personnel are following the Department's regulations. For a description of permissible responsibilities of AN Sellers, refer to section 31.210 of the proposed rule.
The Department proposes that every AN Facility would have to have at least one registered AN Seller (
i.e.,
the Designated AN Facility POC), but may seek the registration of as many other AN Facility Representatives and AN Sellers as it deems appropriate. The
Department proposes that whether or not an AN Facility seeks registration of more than a single person will be discretionary.
In section 31.220(c)(3), the Department proposes that each person registering as an AN Seller, AN Facility Representative, or Designated AN Facility POC will be expected to provide information identifying all AN Facilities at which he/she will perform sales or transfers of ammonium nitrate, or on behalf of which he/she will perform application services. In section 31.220(b), the Department proposes that a single individual may serve as an AN Seller for multiple AN Facilities.
4. Registering AN Facility Representatives
The Department recognizes that not all AN Sellers will have the same level of non-regulatory responsibility and authority within an AN Facility, and that some AN Sellers may not be in a position to monitor or control overall AN Facility compliance or the compliance of other AN Facility employees with the final regulations. In light of this, in section 31.215(b), the Department is proposing the creation of a subcategory of individuals called “AN Facility Representatives” within the broader class of AN Sellers. The Department proposes that AN Facility Representatives would be AN Sellers who are not only responsible for their own compliance with the regulations, but also would be responsible for the AN Facility's overall compliance with the regulations and the compliance of all other AN Facility employees.
The Department also proposes that, for purposes of these regulations, the definition of “AN Facility Representative” be broad enough to include not only individuals who own all or part of AN Facilities, but also any non-owner AN Facility operators, employees, or contractors designated to act on behalf of an AN Facility for purposes of compliance with this proposed rule. Thus, for purposes of the proposed rule, an AN Facility would be allowed to designate as an AN Facility Representative an individual without any ownership in the AN Facility, such as, possibly, a site manager, sales manager, or corporate officer, to meet the “owner” and “operator” registration requirements of Subtitle J.
In section 31.215(b), the Department proposes that every AN Facility would have to have at least one AN Facility Representative registered on its behalf, but may have as many AN Facility Representatives registered on its behalf as it deems appropriate. Whether or not an AN Facility seeks registration of any additional AN Facility Representatives is entirely discretionary. The Department also proposes that while an AN Facility would have to have at least one registered AN Facility Representative, whether or not an AN Facility seeks registration of any additional AN Sellers who are not AN Facility Representatives is entirely discretionary. Under the Department's proposed approach, an AN Facility may decide that it is most cost-effective to register only AN Facility Representatives; however, in that case, AN Facility Representatives would have to be able to perform all applicable regulatory compliance activities in this rule.
While the Department's proposal does not preclude the registration of multiple AN Facility Representatives for a single AN Facility, each AN Facility will be required to designate a single AN Facility Representative to act as the primary point of contact with the Department on behalf of the AN Facility. This individual will be referred to as the “Designated AN Facility POC.” The qualifications and responsibilities of Designated AN Facility POCs will be discussed in the following section.
An individual registering as an AN Facility Representative will be expected to provide the name of and contact information for the Designated AN Facility POC for each AN Facility on behalf of which he/she is registering. Please note that a single individual may serve as an AN Facility Representative for multiple AN Facilities.
5. Registering a Designated AN Facility POC
In section 31.215(a) of the proposed rule, the Department proposes requiring each AN Facility to designate a single AN Facility Representative to act as the primary point of contact with the Department on behalf of the AN Facility. The Department proposes that the Designated AN Facility POC will be the individual who is responsible for contacts with the Department regarding regulatory activities, such as the scheduling of inspections under sections 31.500 and 31.505 of the proposed rule. The Department proposes that the Designated AN Facility POC will have this point-of-contact responsibility in addition to all other AN Facility Representative responsibilities.
Please note that a single individual may serve as a Designated AN Facility POC for multiple AN Facilities.
6. Summary of AN Facility Personnel Registration Proposals
In summary, the Department is proposing that any individual working at or for an AN Facility that performs sales or transfers of ammonium nitrate, or that performs ammonium nitrate application services, would have to register with the Department. Sales, transfers, or application services may only be performed by an individual who successfully registers with the Department and is granted an AN Registered User Number as an AN Seller (or AN Facility Representative or Designated AN Facility POC, as both AN Facility Representatives and Designated AN Facility POCs are subsets of AN Sellers). An AN Facility may have as many or as few registered AN Sellers as it deems fit, and would be required to have at least one registered AN Facility Representative.
AN Facility Representatives have several responsibilities that AN Sellers who are not AN Facility Representatives do not have (
i.e.,
responsibilities for ensuring an AN Facility's holistic compliance with Subtitle J requirements). Each AN Facility would be required to designate a single AN Facility Representative to be that facility's Designated AN Facility POC, who will serve as the facility's primary point of contact with the Department.
The Department welcomes comments on the propriety and effectiveness of this proposed approach, including comments that address the following issues:
• The ownership and management structures of AN Facilities;
• The proposed qualifications for being an AN Facility Representative, including whether individuals who do not own all or part of an AN Facility should be able to register as AN Facility Representatives;
• The proposed regulatory compliance responsibilities of AN Sellers and AN Facility Representatives, which will be described in further detail throughout the remainder of this NPRM;
• Whether or not proof of ownership (for owners) or proof of delegation of authority from company ownership or management (for non-owners) should be required for individuals registering as AN Facility Representatives; and
• The proposal that not all AN Facility owners or operators should be required to register.
The Department also welcomes comments on potential alternative approaches. Several such alternative approaches follow:
• Permitting only individuals who own all or part of an AN Facility to
register, and requiring those individuals to perform all applicable regulatory compliance activities, such as verifying AN Purchasers' AN Registered User Numbers and identities (as described in sections 31.300 and 31.305 of the proposed rule); or
• Permitting only AN Facility Representatives to register, but allowing any facility personnel to conduct ammonium nitrate sales, transactions, and application services; or
• Permitting only AN Facility Representatives to register, but allowing non-registered facility personnel whose names have been provided to the Department to be involved in ammonium nitrate sales, transactions, and application services.
7. Registering AN Purchasers
6 U.S.C. 488a(d) and 6 U.S.C. 488e(a)(3)(A) require any individual who intends to purchase or acquire ammonium nitrate to register with the Department. Specifically, the Department proposes in section 31.205 to require that each individual person attempting to purchase or acquire ammonium nitrate from an AN Facility would be required to register with the Department. Whether that person is the owner of the purchasing entity or simply an employee thereof, the Department proposes to require that person to have a valid AN Registered User Number. Moreover, whether a purchasing entity would want to have a single individual complete all purchases or have multiple individuals with purchasing authority would be within that entity's discretion, but the Department would require any individual attempting to purchase ammonium nitrate to be registered before an AN Facility would be authorized to sell ammonium nitrate to him/her. This is necessary to ensure that each individual taking ownership of ammonium nitrate has been vetted before obtaining ammonium nitrate. The Department welcomes public comment on this proposed approach.
The Department also proposes that it will not require persons receiving ammonium nitrate application services to register as AN Purchasers. The Department does not believe that Subtitle J requires registration and TSDB vetting of owners/operators of agricultural property who receive application services, as long as those individuals do not otherwise qualify for registration under this proposed rule.
1
DHS does not believe that ammonium nitrate fertilizer is likely to be misappropriated for use in acts of terrorism after it has been applied to agricultural property. The Department welcomes public comment on this conclusion.
1
If an owner or operator receives and possesses ammonium nitrate for any length of time before it is applied as fertilizer to his/her agricultural property, he/she would qualify as an AN Purchaser under the Department's proposed rule. Such an owner or operator would have to register with DHS as an AN Purchaser, would have to be screened against the TSDB, and would have to fulfill the other proposed obligations of AN Purchasers as described elsewhere in this NPRM.
8. Federal/State/Tribal/Local Government-Owned Entities That Are AN Facilities or AN Purchasers
While the Department does not believe that many Federal, State, tribal, or local governmentally-owned entities engage in the sale, transfer, or purchase of ammonium nitrate, the Department believes that some such entities do. In Subtitle J, Congress did not exempt from regulation AN Facilities that are owned by, or AN Purchasers who work for, Federal, State, tribal, or local governments. Accordingly, the Department is proposing to treat such entities like any other AN Facilities or AN Purchasers, and is proposing to require them to comply with all applicable regulatory requirements. The Department solicits comments on the existence of governmentally-owned entities engaged in the sale, transfer, or purchase of ammonium nitrate; on the existence of government-owned entities that provide application services; examples of such entities; and whether or not such entities should receive special treatment under the Ammonium Nitrate Security Program.
9. Registration Process
The Department is proposing that each applicant for an AN Registered User Number would be required to register as a Designated AN Facility POC, AN Facility Representative, AN Seller, and/or AN Purchaser through an online Web portal (the “AN User Registration Portal”) developed by the Department and made available via the Internet. Proposed procedures for applying for an AN Registered User Number and registering as a Designated AN Facility POC, AN Facility Representative, AN Seller, and/or AN Purchaser can be found in section 31.220 of the proposed rule. (This NPRM refers to applicants who have successfully registered under these proposed procedures as “registered users.”)
One alternative to Internet-only registration is to add a phone registration option to the current Internet option. This alternative would provide both an online Web portal and phone-based registration system. Applicants could choose between Web portal registration and phone registration—DHS would accept either if it implemented this alternative. Under this alternative, DHS could accept registration applications over the phone, vet applicants against the TSDB (as described in section III.B.11 of this NPRM), and subsequently mail applicants paper letters containing registration numbers or registration denials. DHS could also potentially provide each applicant with the option of receiving a call, conveying registration results or registration status, prior to receipt of a paper letter in the mail. Calls could be provided to enable applicants to learn their statuses prior to receiving letters in the mail.
Although DHS is proposing Internet-only registration at this time, the Department invites public comments addressing the above alternative registration approach, and any other alternative registration approaches that commenters believe would enable applicants and DHS to efficiently carry out their respective registration obligations. Specifically, DHS is interested in identifying alternative approaches to the Internet that would allow DHS to meet its statutory requirements to, “to the extent practicable, issue or deny registration numbers under [Subtitle J] not later than 72 hours after the time [DHS] receives a complete registration application, unless [DHS] determines, in the interest of national security, that additional time is necessary to review an application[,]” and to “notify a person seeking to register with the Department [* * *] of the status of the application of that person not later than 72 hours after the time [DHS] receives a complete registration application.”
See
6 U.S.C. 488a(i)(3). The Department will consider and examine alternatives suggested in public comments in assessing whether to require online registration in the final rule. DHS is particularly interested in receiving public comments addressing the business and economic impacts that various registration alternatives would have on the regulated community, including the costs and benefits of the various alternatives on individual registration applicants. Because it is proposing to implement an online registration system, DHS requests comments addressing the level of access to the Internet that registration applicants currently have, comments addressing the level of access applicants anticipate having in the future, and
comments addressing how registration applicants who do not have readily-accessible Internet access could obtain the access necessary to register online. DHS specifically requests information, data, and/or studies pertaining to the regulated community's access to the Internet. The Department will consider any data or studies received on any aspects of registration or on any alternatives, as well as other comments, and if appropriate, modify the registration system proposed in this NPRM.
While not every potential applicant may have personal access to the Internet, the Internet is widely available, such as at public libraries or in other public buildings. AN Facilities are also welcome, but not required, to provide Internet access to potential applicants. The Department believes that there are significant benefits to an online approach. The benefits to applicants, registered users, and the Department of an online approach include: (1) Quicker response from the Department, thereby minimizing the time during which an applicant or registered user would not be able to purchase, sell, or transfer ammonium nitrate, or perform ammonium nitrate application services; (2) ability for an applicant or registered user to access, view, update, and manage his/her personally identifiable information; and (3) ability for a registered user to easily renew his/her AN Registered User Number once it has expired. Additional benefits of online registration, and description of rationales for online registration, follow.
As described in section III.B.11 of this NPRM, DHS proposes to vet registration applicants against the TSDB as part of the Ammonium Nitrate Security Program. Accurate TSDB vetting depends upon DHS obtaining accurate information from registration applicants. Because TSDB vetting results or submissions of inaccurate or improper registration information to DHS could lead to registration denials or revocations (as described in sections III.B.12 and 13 of this NPRM), preventing individuals from being able to access ammonium nitrate and thus impacting their livelihoods, DHS believes that it should implement the most accurate registration system possible. DHS believes that implementing an online registration system would reduce the risk of human error in submission and transcription of registration information, as compared to the phone-in registration alternative mentioned above or as compared to mail-in or other possible registration alternatives. DHS is seeking comment on this assumption. DHS also believes that implementing an online registration system would reduce the risks of lost paperwork or misdirected mail, both by registration applicants and by DHS, which would be inherent in any alternative registration systems relying on mailed correspondence or paper forms. While allowing registration over the phone would eliminate the potential loss of mailed paper forms by registration applicants, it would not entirely eliminate the potential for some paper letters from DHS containing registration numbers or registration denials to be lost. DHS thus believes that an online registration system is likely to be the most accurate registration system possible; it would be less prone to the types of errors identified above than alternative registration systems. DHS seeks comments on how errors could be reduced through alternative registration systems.
DHS proposes Internet-only registration because Subtitle J directs the Department to “establish procedures to efficiently receive applications for registration numbers.”
See
6 U.S.C. 488a(i)(1)(A). A major goal of Subtitle J is to expedite and streamline the registration and regulatory compliance processes that are part of the Ammonium Nitrate Security Program.
See, e.g.,
6 U.S.C. 488a(i)(3)(A) (directing DHS to, “to the extent practicable, issue or deny registration numbers under [Subtitle J] not later than 72 hours after the time [DHS] receives a complete registration application [* * *]”); 6 U.S.C. 488a(i)(1)(A) (directing DHS to “
promptly
issue or deny” registration numbers (emphasis added)); 6 U.S.C. 488a(i)(1)(B) (directing DHS to structure the program to maximize the number of registration applicants that apply for registration soon after implementation of the program); 6 U.S.C. 488a(i)(3)(B) (directing DHS to notify registration applicants whenever there are delays in processing registration applications); and 6 U.S.C. 488a(i)(4)(A) (directing DHS to create an expedited appeals process for individuals whose registration applications are denied). Implementing an online registration system would not only enable DHS to return registration results to applicants over the Internet within the 72-hour timeframe set forth in 6 U.S.C. 488a(i)(3)(A), it would also enable DHS to return registration results to applicants faster than under any of the other possible registration alternatives, thereby best achieving the goal of expediting registration that underlies Subtitle J. The Department proposes the Internet-only approach because mail processing times, delays associated with transcribing phoned-in registrations, and delays associated with generating and processing paper forms mailed to or from DHS would slow DHS's responses to registration applications. For these reasons, a phone-in or mail-in registration alternative would not expedite registration in comparison to online registration. However, DHS seeks comment on whether or not possible registration delays would be preferable to the burdens of having to access public computers that would be imposed by an Internet-only registration approach on individuals without readily-accessible Internet access. DHS is also seeking comments on other ways in which these burdens might be mitigated for those without readily-accessible Internet access.
DHS acknowledges that the proposed Internet-only registration procedures, if finalized, would impose costs and burden on regulated members of the public. Online registration would likely be more burdensome for individuals without readily-accessible access to the Internet than for others. Subtitle J, however, specifies that persons do not need to be registered to purchase, sell, transfer, or receive ammonium nitrate until six months after the issuance of the final rule implementing the Ammonium Nitrate Security Program.
See
6 U.S.C. 488e(e). DHS believes that this six-month period will provide a sufficient opportunity for those without readily-accessible Internet access to obtain the brief Internet access necessary to register with the Department. The period of time between issuance of a final rule and implementation of the registration requirement (
i.e.,
that individuals possess AN Registered User Numbers) should minimize burden or business disruption felt by registration applicants. Nevertheless, the Department seeks comments on the likely burdens (in terms of time and expense) on those who would need to access public computers in order to register online. DHS also seeks comments on any additional costs incurred besides those associated with registration.
In Subtitle J, 6 U.S.C. 488a(i)(1)(B) additionally directs the Department to take steps to maximize the number of registration applications that are submitted and processed during the six months following the issuance of the final rule. In order to accomplish this, the Department intends to engage in a concerted outreach effort both immediately before and immediately after the release of the final rule in an
effort to raise awareness of Subtitle J's registration requirements and the process for completing them. The Department welcomes public comments on both potential outreach targets and other steps the Department can take to maximize the number of registration applications that are submitted and processed during the initial six-month registration period.
The Department's proposal would require online registration, but would not mandate what sort of Internet access registration applicants must obtain in order to complete the registration process. As mentioned previously, registration applicants could use public computers and internet connections, or computers and Internet connections provided by AN Facilities, in order to register if they do not have access to personal computers and the internet. DHS recognizes that use of public computers or unsecured Internet connections can increase privacy risks and risks of loss of sensitive personal data. The Department has published a Privacy Impact Assessment concurrently with publication of this NPRM addressing these risks, and also addressing other privacy risks and safeguards relevant to the Ammonium Nitrate Security Program. The Department's Ammonium Nitrate Security Program Privacy Impact Assessment can be found online, at
http://www.dhs.gov/privacy.
DHS encourages members of the public to read the Privacy Impact Assessment, and submit comments on this NPRM regarding the risks and safeguards that is addresses. The Department is particularly interested in receiving comments addressing privacy risks associated with use of public computers or unsecured internet connections as part of the proposed registration process, and comments addressing how DHS and registration applicants can protect personal information and sensitive information transmitted online.
In summary, the Department proposes that registration applications be collected only though an online web portal. The Department seeks public comments on this proposed Internet-only approach, and on potential alternative approaches. DHS will consider alternatives submitted in selecting which type of registration system to implement as part of the final rule.
10. Initial Applications
Upon accessing the AN User Registration Portal, DHS proposes in section 31.220(c)(1) that each applicant will be asked a series of questions designed to allow the Department to vet the individual against the TSDB, and to subsequently enable point of sale verifications. The Department is proposing in section 31.220(c)(1) that each applicant provide his/her name, address, telephone number, photo identification document type, photo identification document issuing entity, photo identification document number, place of birth, date of birth, citizenship, and gender, along with any other information deemed necessary by the Department to carry out TSDB vetting.
To ensure that appropriate user roles are assigned to each AN Registered User Number, DHS proposes in section 31.220(b) that each applicant would also be asked to declare his/her ammonium nitrate user status in general terms (
i.e.,
AN Seller; AN Facility Representative; Designated AN Facility POC; AN Purchaser). In section 31.220(b), the Department proposes to allow an applicant the ability to register as both an AN Seller and an AN Purchaser. The Department is interested in receiving comments on the utility of this proposal.
The Department is also proposing in section 31.220(c)(3) that each AN Seller, AN Facility Representative, and Designated AN Facility POC would be required to submit information identifying all AN Facilities at or for which he/she serves as an AN Seller, AN Facility Representative, or Designated AN Facility POC.
Under section 31.220(c)(1) of the proposed rule the Department may also collect information necessary to enable it to verify applicants' enrollments in other TSDB vetting programs. The Department is considering exercising its authority under 6 U.S.C. 488a(i)(6)(A) to recognize the results of equivalent TSDB vetting conducted on applicants enrolled in other appropriate DHS programs where possible. This approach would limit the number of instances in which different DHS programs may vet the same applicant against the TSDB. The Department would appreciate comments regarding whether or not this or other information would be worthwhile to collect, and regarding the burden on the regulated community of such collection. The Department also welcomes public comment on the totality of this proposed registration application process, including public comment discussing potential alternative processes.
Pursuant to the Privacy Act, 5 U.S.C. 552a(e)(3), DHS intends to provide notice to individuals submitting information to DHS through the AN User Registration Portal about the authority for DHS's collection of application information, the purposes for collecting application information, the uses of application information, and the impacts on individuals by providing or failing to provide application information. DHS expects to provide this notice electronically, within the AN User Registration Portal.
11. Applicant Vetting Process
In section 31.225, the Department proposes to vet applicants against the TSDB and/or verify each applicant's enrollment in a Department program that conducts equivalent TSDB vetting prior to issuing him/her an AN Registered User Number.
See
6 U.S.C. 488a(i)(2)(A) (requiring TSDB vetting). Under section 31.230(b)(1) of the proposed rule, applicants whose identifying information appears in the TSDB may be denied AN Registered User Numbers.
See
6 U.S.C. 488a(i)(2)(B). Each applicant who applies for an AN Registered User Number will be vetted against the TSDB before being approved to purchase, sell, transfer, or provide application services for ammonium nitrate.
The Department is aware that some applicants may have already been vetted against the TSDB as part of other DHS programs prior to submission of their AN Registered User Number applications. Sections 31.220 and 31.230 of the proposed rule would enable, but would not require, DHS to recognize the results of TSDB vetting completed by other DHS programs as part of AN Registered User Number application reviews. The Department is interested in receiving comments on the utility of this proposal.
The Department welcomes public comment on the means by which it proposes to accomplish vetting, and on any other aspects of the proposed approach to vetting applicants for AN Registered User Numbers. At a date after publication of the Ammonium Nitrate Security Program NPRM in the
Federal Register
, but prior to final rule implementation, the Department will publish in the Federal Register both a System of Records Notice (SORN) for the Ammonium Nitrate Security Program and a separate Notice of Proposed Rulemaking proposing to exempt the Ammonium Nitrate Security Program from certain Privacy Act requirements. The Department will also publish, on the Department's Web site, a Privacy Impact Assessment. In these documents the Department will outline the potential privacy impacts of the proposed rule, including the privacy impacts of the vetting process and the circumstances under which DHS intends to share information collected
under the Ammonium Nitrate Security Program with Federal law enforcement agencies as a part of law enforcement investigations into terrorist ties of applicants for AN Registered User Numbers.
12. Notification of Approval or Denial
Consistent with 6 U.S.C. 488a(i)(3)(A) and 6 U.S.C. 488a(i)(3)(B), to the extent practicable, the Department intends to approve or deny each application for an AN Registered User Number, and to issue each AN Registered User Number, not later than 72 hours after the time the Department receives a complete application. The Department may deny an applicant an AN Registered User Number if that applicant's name or identifying information appears in the TSDB.
See
6 U.S.C. 488a(i)(2)(B). The Department proposes in section 31.230(c) to provide notification of registration application approval or denial to each applicant electronically.
If a registration application is approved, the notification of such approval will contain a unique AN Registered User Number assigned to the applicant. The Department is considering including in the notification issued to each successful applicant a certificate including the AN Registered User Number that he/she can print and keep as part of his/her records and use to facilitate the AN Purchaser verification process.
The Department welcomes public comment on the efficiency and sufficiency of notifying applicants of AN Registered User Number approvals and denials via e-mail or other electronic means, and also welcomes public comment addressing potential alternative means for providing such notice, such as notification via telephone or letter. The Department also welcomes public comment addressing the appropriate contents of registration approvals and denials.
The Department intends to issue or deny AN Registered User Numbers within 72 hours of application, as required by Subtitle J.
See
6 U.S.C. 488a(i)(3). When this is not practicable, or when the Department determines in the interest of national security that additional time is needed to review an application, the Department proposes to provide notice of delay to applicants whose registration determinations are delayed in the same manner as approvals or denials will be issued, as stated in section 31.230(e) of the proposed rule. The Department welcomes public comment on the efficiency, sufficiency, costs and benefits of this manner of providing notice of delay, and also welcomes public comment addressing potential alternative means of providing such notice.
13. Revocation of Registration Numbers
Under section 31.245 of the proposed rule, the Department proposes to revoke an individual's AN Registered User Number upon determining that it is in the interest of national security to revoke that AN Registered User Number based on the results of the activities described in section 31.225 of the proposed rule, or that the AN Registered User holding that AN Registered User Number obtained it by submitting fraudulent or false information.
See
6 U.S.C. 488a(i)(7)(A). To support these determinations, in section 31.225(b) the Department proposes to recurrently vet individuals who have previously been issued AN Registered User Numbers.
See
6 U.S.C. 488a(i)(7)(A). As appropriate, before revoking an individual's AN Registered User Number, the Department must provide notice to the individual, and after the revocation of the AN Registered User Number, the Department must provide the affected individual an opportunity to appeal.
See
6 U.S.C. 488a(i)(7)(B). In sections 31.245(b) and (c), DHS proposes that notification of revocation will be provided to each affected individual in writing, along with instructions on the process for appealing the Department's revocation decision. The appellate process will mirror that provided to individuals whose initial applications for AN Registered User Numbers are denied, as described below in the following section and in section 31.250 of the proposed rule. The Department welcomes public comment on the efficiency and sufficiency of this method of providing notice of revocation and on the proposed appeals process, and also welcomes public comment on potential alternative means for either.
14. Appealing Registration Denials and Registration Revocations
This section discusses proposed appeal procedures for persons denied AN Registered User Numbers and for persons whose AN Registered User Numbers are revoked under Subtitle J. These procedures can be found in section 31.250 of the proposed rule. A later section of this NPRM, section III.H, discusses proposed adjudication and appeal procedures for persons and entities issued civil penalties by the Department under Subtitle J. These two sets of procedures are mutually exclusive; the Department proposes that registration and revocation appeals will be governed only by the appeals mechanisms described in this section of this NPRM, while civil penalty adjudications and appeals will be governed only by the mechanisms described in section III.H of this NPRM.
The reason for this mutual exclusivity is because registration denials and revocations are fundamentally different from imposition of civil penalties under the Department's proposed rule. Under the Department's proposal, individuals or other entities will only be issued civil penalties for violating the rules of the Ammonium Nitrate Security Program. Individuals or other entities will not be issued civil penalties for having their registrations denied or revoked. Adjudication or appeal of civil penalties will thus involve assessment of whether or not individuals or other entities have violated the final Ammonium Nitrate Security Program rules. On the other hand, appeal of denial or revocation of registration numbers will involve review of the completeness and accuracy of registration applications, and review of TSDB vetting results and national security interests if applicable. The appeal procedures listed in this section of the NPRM are intended to enable reviews of registration application denials and revocations of registration numbers, while the adjudication and appeal procedures listed in section III.H are intended to enable reviews of civil penalties and of alleged regulatory violations.
Subtitle J requires the Department to afford persons denied AN Registered User Numbers, and persons whose AN Registered User Numbers are revoked, the opportunity to appeal such denials and revocations in an expedited manner.
See
6 U.S.C. 488a(i)(4). The Department proposes to fulfill this requirement by permitting each person to request copies of the materials on which denial or revocation was based, and to file statements explaining why he/she believes that he/she has been inappropriately denied registration and containing any applicable supporting evidence, to be reviewed by the Department. These proposed appeals procedures are based, in part, on appeals procedures the Department offers as part of the Transportation Worker Identification Credential (TWIC) and Hazardous Materials Endorsement (HME) programs.
See
49 CFR 1515.9(a)-(b); 49 CFR 1515.5.
Specifically, the Department proposes that, after having received an ammonium nitrate registration denial or revocation, a person may initiate an appeal by filing a written Request for Materials requesting copies of the materials on which denial or revocation was based. The Department proposes to
require that each Request for Materials be submitted to the Department within 60 days of the date of denial or revocation.
The Department proposes that after the receipt of a Request for Materials, it will send the appellant a DHS Response containing copies of the releasable materials upon which denial or revocation was based. DHS will not include any classified information in this DHS Response nor will it include any other information or material protected from disclosure under law, although as appropriate it will include unclassified summaries of classified evidence supporting denial or revocation. The Department proposes that it will serve its DHS Response on the appellant within 60 days of Request for Materials receipt, unless additional time is required in the interest of national security.
Upon review of those releasable materials, the Department proposes that an appellant may reply to the Department with a Request for Appeal containing the rationale or information upon which he/she disputes the Department's denial or revocation determination. The Department proposes that an appellant will have 60 days from the date of the Department's Response in which to file such rationale or information. The Department proposes that after reviewing this rationale or information, it will serve the appellant with a Final Determination of the Department's resolution of his/her appeal. The Department proposes that it will perform this service within 72 hours of Request for Appeal receipt, to the extent practicable, as required by 6 U.S.C. 488a(i)(4)(A)(ii).
For good cause shown, the Department additionally proposes to grant appellants extensions of the 60-day appeals submission periods mentioned above. This will afford appellants the necessary time in which to work with other government agencies to correct records and materials contributing to the Department's denial/revocation determinations when those records and materials contain incorrect or outdated information.
The Department welcomes public comment on this appeals mechanism, and also welcomes public comment on potential alternative appeals mechanisms.
15. Registration Updates and Expiration
Under Subtitle J, DHS may require registrants to update registration information submitted to DHS “as appropriate.”
See
6 U.S.C. 488a(6)(b). Pursuant to this authority, section 31.220(a)(2) proposes to require registration applicants and AN Registered Users to update submitted information within 30 days of a change to any of the information submitted as part of the application (
e.g.,
name, address). An applicant or AN Registered User would be able to update his/her information through the proposed AN User Registration Portal. DHS seeks public comment on its proposed approach to updating registration information, including how often and under what circumstances to require registrants to update the information submitted to DHS as part of registration. DHS also requests public comments on potential alternative approaches to requiring registration information to be updated through the proposed AN User Registration Portal, including comments on the feasibility and practicality of allowing updates to be accomplished over the telephone or through the mail.
The Department proposes in section 31.235 of the proposed rule to make each AN Registered User Number issued under Subtitle J valid for five years after the date of issuance (unless revoked before expiration pursuant to 6 U.S.C. 488a(i)(7)). Under this proposal, the Department expects many applicants to apply to renew their AN Registered User Numbers every five years.
In proposing five years as the duration of each AN Registered User Number, the Department is seeking to balance the benefits of requiring renewals against the burdens to both the regulated community and the Department of the renewal process. As part of its evaluation of potential expiration and renewal processes, the Department has considered the expiration/renewal schedules for ATF's Federal Explosives Regulations (three years), for DHS programs that conduct TSDB vetting (
e.g.,
five years for TSA's TWIC program and five years for U.S. Customs and Border Protection's Trusted Traveler programs), and for various State ammonium nitrate licensing regulations (generally one year). The Department believes that the five-year renewal cycle for AN Registered User Numbers is appropriate because it will minimize the burden on the regulated community, in comparison to screening programs with shorter renewal cycles. Additionally, a five-year validity period aligns with DHS's practice of recurrently vetting information against the TSDB for five years as part of certain transportation and critical infrastructure security programs.
The Department proposes in section 31.240 to allow each AN Registered User to apply for a five-year extension of his/her AN Registered User Number via the proposed AN User Registration Portal anytime beginning 60 days prior to the expiration of his/her AN Registered User Number through one year after the expiration of his/her AN Registered User Number. After completion of the renewal process, each renewed AN Registered User Number will be valid for an additional five years. To facilitate this, the Department intends to maintain an AN Registered User's registration application information for a period of one year following the expiration of his/her AN Registered User Number. If an individual fails to renew his/her AN Registered User Number within one year of its expiration, the AN Registered User Number will be permanently retired. Such an individual will need to apply for a new AN Registered User Number to purchase, sell, transfer, or provide application services for ammonium nitrate after his/her initial AN Register User Number has been permanently retired.
The Department seeks public comment on this proposed approach, including the utility, benefits, and costs of requiring re-registration of ammonium nitrate users in general, and on the proposed five-year time period in particular.
16. Initial Six-Month Registration Period
6 U.S.C. 488e(e) specifies that persons do not need to be registered to purchase, sell, transfer, or receive ammonium nitrate until six months after the issuance of the final rule implementing Subtitle J. 6 U.S.C. 488a(i)(1)(B) directs the Department to take steps to maximize the number of registration applications that are submitted and processed during the six months following the issuance of the final rule. In order to accomplish this, the Department intends to engage in a concerted outreach effort both immediately prior to and immediately following the release of the final rule in an effort to raise awareness of Subtitle J's registration requirements and the process for completing them. The Department welcomes suggestions on both potential outreach targets and other steps the Department can take to maximize the number of registration applications that are submitted and processed during the initial six-month registration period.
C. Purchaser Verification Activities (See Sections 31.300-31.310 of the Proposed Rule)
1. Overview
Subtitle J specifies that only individuals with valid AN Registered
User Numbers may purchase ammonium nitrate, and that AN Sellers would be required to refuse to sell ammonium nitrate to prospective AN Purchasers who do not possess valid AN Registered User Numbers.
See
6 U.S.C. 488e(a)(2) and 6 U.S.C. 488e(a)(3). To this end, AN Sellers would be required to verify that each prospective AN Purchaser has a valid (
i.e.,
current and authentic) AN Registered User Number prior to transfer of ammonium nitrate. Subtitle J also requires AN Sellers to verify each prospective AN Purchaser's identity prior to transfer of ammonium nitrate to that prospective AN Purchaser.
See
6 U.S.C. 488a(e)(2)(D). DHS therefore proposes to require that an AN Facility refuse to sell or transfer ammonium nitrate to a prospective AN Purchaser whose identity or AN Registered User Number the AN Seller is unable to verify. These proposed requirements can be found in section 31.300 of the proposed rule, and are further discussed throughout the remainder of section III.C of this NPRM.
In addition to verifying the identity and AN Registered User Number of a prospective AN Purchaser, if an AN Purchaser whose identity and AN Registered User Number has been verified uses an agent on his or her behalf at the point of sale, the AN Seller must also verify the identity of the agent.
See
6 U.S.C. 488a(e)(2)(D). Identity verification of AN Purchasers (and, where applicable, their agents) by AN Sellers is to occur in accordance with procedures proposed in section 31.300.
AN Facilities would also be required to record certain information regarding prospective AN Purchasers (and, if applicable, the agents acting on their behalves) for each sale or transfer as part of Subtitle J's recordkeeping requirements.
See
6 U.S.C. 488a(e)(2).
2. Manner of Sale or Transfer of Ammonium Nitrate
The Department is aware that the ways in which sales and transfers of ammonium nitrate are conducted can vary by AN Facility, and that differences in ammonium nitrate transaction protocols could impact the timing and performance of identity verification and other required point of sale activities. Through conversations with industry, the Department has identified three principal transaction formats commonly used to sell or transfer ammonium nitrate: (1) The AN Purchaser appears at an AN Facility and takes possession of ammonium nitrate from the AN Seller directly; (2) the AN Purchaser places an advanced order either in person or through other means (
e.g.,
telephone, online), and the AN Seller delivers ammonium nitrate to the AN Purchaser; or (3) the AN Purchaser places an advanced order either in person or through other means (
e.g.,
telephone, online), and an agent acting on behalf of the AN Purchaser takes possession of the ammonium nitrate from the AN Seller. Other transaction formats are also possible.
In addition to the aforementioned approaches to transferring possession of ammonium nitrate as part of a sale or transfer, depending on the financial arrangements entered into between an AN Facility and an AN Purchaser, the payment of funds or other services in exchange for ammonium nitrate may occur prior to, concurrent with, or after the actual transfer of possession of ammonium nitrate.
The Department is interested in comments regarding the frequency of these various modes of delivery and payment, as well as any other transactional formats that are used to sell or transfer ammonium nitrate.
The verification activities described in section III.C of this NPRM are required for each sale or transfer of ammonium nitrate. The Department seeks comments on its proposed definition of “transfer,” including what should be considered a transfer subject to Subtitle J. For purposes of this rule, the Department is proposing that “transfer” of ammonium nitrate be defined generally as “[t]he transfer of possession or ownership of ammonium nitrate from one person or entity to another person or entity for use outside of the AN Facility from which the ammonium nitrate is being transferred. Transfers of ammonium nitrate include transfers of possession or ownership that occur as part of sales and other business or commercial transactions, and also include transfers of possession or ownership that are not part of sales or other business or commercial transactions. The physical deposit of fertilizer onto turf, fields, crops, or other agricultural property is not a transfer of ammonium nitrate.” Elaboration on this definition follows.
The Department is aware that transaction protocols may be different for sales or transfers that occur as part of imports or exports of ammonium nitrate than for purely domestic sales or transfers. As part of this proposed rule, DHS proposes to regulate all ammonium nitrate transfers that occur within the United States. As such, DHS would require the verification and recordkeeping activities described below whenever possession of ammonium nitrate changes hands inside the United States. For example, if an individual brings ammonium nitrate into the country and transfers possession of it to another person within the United States, the verification and recordkeeping activities described below would be required. Similarly, if an individual in the United States transfers possession of ammonium nitrate to another person who intends to export that ammonium nitrate, the verification and recordkeeping activities described below would be required. Verification and recordkeeping would not be required, however, if an individual transports ammonium nitrate out of the country as long as there is no transfer of possession of the ammonium nitrate when it is inside the United States. Likewise, verification and recordkeeping would not be required if an individual brings ammonium nitrate into the country as long as there was no transfer of possession of that ammonium nitrate when it is inside the United States. DHS seeks comments on this proposal, on the methods of conducting ammonium nitrate imports and exports, and on any potential alternative treatments of imported or exported ammonium nitrate.
When ammonium nitrate is used or moved within a single AN Facility, or when possession of ammonium nitrate changes within a single AN Facility but that ammonium nitrate does not leave the AN Facility, the verification activities described below are not required. The reason for this is that, under Subtitle J, DHS is authorized only to regulate sales, transfers, and application services; how ammonium nitrate is stored, used, or processed within the confines of individual AN Facilities is not the subject of Subtitle J. As such, persons using or moving ammonium nitrate within an AN Facility, or obtaining possession of ammonium nitrate for use within the same AN Facility, would not need to be registered with DHS.
The application of ammonium nitrate fertilizer to property by an application service would not be regulated as a transfer under the Department's proposal. The Department does not believe that ammonium nitrate fertilizer is likely to be misused in acts of terrorism after it has been applied to agricultural property. Accordingly, farmers and other persons who have ammonium nitrate fertilizer spread on their agricultural property do not need to register with the Department, nor do their identities need to be verified by AN Sellers prior to their receipt of
application services.
2
Pursuant to the Department's proposal, however, transfer of ammonium nitrate from an AN Facility to a separate application service would be regulated. Regulation of application services is required under Subtitle J.
See
6 U.S.C. 488(2). Specifically, the Department believes that regulation of transfers to application services is necessary in order to ensure that terrorists cannot easily obtain ammonium nitrate by infiltrating, posing as, or working for application services. The Department seeks comments on these proposals, and is particularly interested in comments discussing interactions between AN Facilities, application services, and ammonium nitrate end users.
2
Persons who perform application services, however, must be registered with DHS under the proposed rule. For elaboration on this registration requirement, see section 31.210(c) of the proposed rule and see sections III.B.2 and 3 of this NPRM.
Persons who transport ammonium nitrate from one AN Facility to a delivery location outside that AN Facility (
e.g.,
truck drivers) conduct regulated transfers under this proposed rule, regardless of whether the AN Facility and delivery location are owned or operated by the same business or organization, and are therefore subject to this regulation. Ammonium nitrate transportation would be regulated in three ways under the proposed rule, depending upon particular transporters' relationships with AN Facilities or AN Purchasers. Any particular transportation would have to be regulated pursuant to one (and only one) of the three options listed immediately below.
3
3
Transporters of ammonium nitrate can also be subject to other Federal and State regulations regarding the transportation of hazardous materials. Registration and compliance with DHS's proposed Ammonium Nitrate Security Program would not relieve transporters of duties or registration requirements under USCG, TSA, or DOT rules, or under other Federal or State programs. See sections II.D.3 and II.D.4 of this document for descriptions of other select rules and programs.
(1)
Transporters who are the agents of AN Purchasers.
Any person possessing valid photo identification could transport ammonium nitrate from an AN Facility to an AN Purchaser, pursuant to the Department's proposed rules for “AN Agents” as described in sections III.C.4 through III.C.9 of this NPRM. “AN Agent” transporters would not need to be registered with or vetted by DHS. Any AN Purchaser to which an “AN Agent” transporter delivers ammonium nitrate, however, would need to be registered with and vetted by the Department. Similarly, any AN Seller from whom an “AN Agent” transporter obtains ammonium nitrate (
i.e.,
any AN Seller who provides ammonium nitrate to be loaded into an “AN Agent” transporter's truck or other vehicle) would need to be registered with and vetted by the Department.
Before an “AN Agent” transporter can pick up or obtain possession of ammonium nitrate (
i.e.,
before it can be loaded into his/her truck or other vehicle), his/her identity would need to be verified by the AN Facility from which he/she seeks to pick up ammonium nitrate, as described in sections III.C.8 and III.C.9 of this NPRM. Before an “AN Agent” transporter can pick up ammonium nitrate, the AN Facility from which he/she seeks to pick it up would also need to verify that he/she has legitimately been asked to serve as an “AN Agent” by a registered AN Purchaser. See sections III.C.7 and III.C.9 of this NPRM. Before an “AN Agent” transporter can pick up ammonium nitrate, the AN Facility from which he/she seeks to pick it up would also need to verify that the AN Purchaser to whom the “AN Agent” transporter plans to deliver the ammonium nitrate is properly registered with DHS. See sections III.C.4, 6, and 9 of this NPRM.
Under this proposed rule, an “AN Agent” transporter would not need to perform any identity verification or registration verification on the AN Purchaser to whom he/she delivers ammonium nitrate. Similarly, “AN Agent” transporters would not need to maintain any records or paperwork under this proposed rule.
(2)
Transporters who work for AN Facilities.
Transporters could work for or deliver ammonium nitrate on behalf of AN Facilities, and could register under the Department's proposed rules as AN Sellers for those facilities. See section III.B.3 of this NPRM. Transporters who register as AN Sellers would be vetted against the TSDB. See sections III.B.10 and III.B.11 of this NPRM.
Once registered as an AN Seller on behalf of a particular AN Facility, a transporter could pick up or obtain possession of ammonium nitrate from that AN Facility (
i.e.,
it could be loaded into his/her truck or other vehicle at that AN Facility) without having to undergo the identity verification or AN Registered User Number verification activities described in sections III.C.3 through III.C.9 of this NPRM. Before a transporter who is registered as an AN Seller delivers or drops off ammonium nitrate to an AN Purchaser, however, he/she (or other registered employees of the AN Facility with which he/she is associated) would have to conduct registration verification and identification verification on the AN Purchaser receiving the ammonium nitrate. See sections III.C.3 through III.C.9 of this NPRM. The AN Facility with which the transporter is associated would also have to maintain records of the transporter's delivery. See section III.D of this NPRM.
(3)
Independent transporters.
Transporters who fit into neither of the previous two categories would be regulated as both AN Purchasers and AN Sellers under the Department's proposed rule. As such, they would have to register with the Department and be vetted against the TSDB. See sections III.B.10 and III.B.11 of this NPRM. Any AN Seller from whom an independent transporter picks up or obtains ammonium nitrate (
i.e.,
any AN Seller who provides ammonium nitrate to be loaded into the independent transporter's truck or other vehicle) would also need to be registered with and vetted by the Department. Similarly, any AN Purchaser to whom an independent transporter delivers ammonium nitrate would also need to be registered with and vetted by the Department.
Independent transporters would need to be registered as AN Purchasers in order to pick up or obtain ammonium nitrate (
i.e.,
in order to have it loaded into their trucks or other vehicles). Before an independent transporter can pick up or obtain possession of ammonium nitrate (
i.e.,
before it can be loaded into his/her truck or other vehicle), his/her identity would need to be verified and his/her AN Registered User Number would need to be verified by the AN Facility from which he/she seeks to pick up or obtain ammonium nitrate. See sections III.C.4, III.C.5, and III.C.9 of this NPRM.
Independent transporters would also need to be registered as AN Sellers in order to deliver ammonium nitrate to other AN Purchasers. Before an independent transporter delivers or drops off ammonium nitrate to an AN Purchaser, he/she (or other employees registered on behalf of his/her organization) would have to conduct a registration verification and identity verification on the AN Purchaser receiving the ammonium nitrate. See sections III.C.3 through III.C.9 of this NPRM. The AN Facility with which the independent transporter is associated would also have to maintain records of the transporter's delivery. See section III.D of this NPRM.
The Department is interested in comments addressing coverage of truck drivers and other transporters of ammonium nitrate. The Department is particularly interested in comments
addressing transporters' relationships to AN Facilities and AN Purchasers, and addressing transporters' abilities to perform the activities required of regulated persons. The Department specifically requests comments addressing the three types of transportation arrangements described above, including comments discussing whether any particular types of transportation arrangements should be exempt from proposed regulatory requirements, and if so, discussing why particular transportation arrangements should be exempt.
DHS proposes that transportation of ammonium nitrate where possession moves between different AN Facilities or other locations would be regulated as a transfer. Both of these types of transfers would require all the registration, verification, and recordkeeping activities required of transfers elsewhere in this NPRM. A person delivering ammonium nitrate from one AN Facility to another location would be regulated as part of one of the three transporter categories listed above, regardless of whether that person's delivery location is part of the same company or business as the AN Facility from which he/she obtains the ammonium nitrate transported.
By proposing to require that transportation between related business entities qualifies as a regulated transfer of ammonium nitrate, DHS would ensure that all entities from which transportation of ammonium nitrate originates have AN Registered Users on staff who are screened for terrorist ties who can be responsible for carrying out the security requirements of Subtitle J. Likewise, by proposing to require that transportation between related business entities qualifies as a regulated transfer of ammonium nitrate, DHS would also ensure that all entities receiving shipments of ammonium nitrate have AN Registered Users on staff who are screened for terrorist ties and who can be responsible for carrying out the security requirements of Subtitle J. Similarly, by proposing to require that transportation between related business entities qualifies as a regulated transfer of ammonium nitrate, DHS would also ensure that intra-company transportation of ammonium nitrate is conducted by AN Registered Users or “AN Agents.” These features of the Department's proposed rule would help to ensure that persons screened for terrorist ties (or their agents) would be responsible for a given company's or business's ammonium nitrate during times when that ammonium nitrate might be most vulnerable to misappropriation.
The Department seeks comments on the proposal that transportation of ammonium nitrate would be regulated where possession moves between different locations but where ownership is not transferred (
i.e.,
where transfer takes place within a single corporate entity). DHS realizes, however, that this proposal could have a significant impact on businesses with multiple locations, and that it might not increase ammonium nitrate security for every AN Facility or entity to which it would apply. Accordingly, the Department seeks comments on this proposal. DHS also seeks comments suggesting alternative ways in which Subtitle J's requirements regarding the regulation of ammonium nitrate transfers could be achieved. The Department is interested in comments generally describing the organizational structures and transportation needs of the companies or other entities owning or operating AN Facilities, and in comments addressing whether transportation between locations owned or operated under the same corporate structure should be exempt from coverage under the Ammonium Nitrate Security Program.
3. Required Verification Activities
Based on statutory requirements and the Department's understanding of the ways in which sales and transfers of ammonium nitrate typically occur, the Department is proposing to require that an AN Seller perform the specific verification activities discussed below for each sale or transfer of ammonium nitrate.
The AN Seller would always be required to verify the currency and authenticity of the prospective AN Purchaser's AN Registered User Number.
The AN Seller would be required to verify the prospective AN Purchaser's identity as specified by DHS. The manner of verification of a prospective AN Purchaser's identity would vary depending on whether or not the AN Purchaser has opted to use an agent (an “AN Agent”) to procure ammonium nitrate for him/her. If the AN Purchaser opted not to use an agent, then the AN Seller verifies the AN Purchaser's identity based upon the visual check of the AN Purchaser's photo identification. If the AN Purchaser opted to use an agent, then the AN Seller verifies the AN Purchaser's identity by submitting certain information provided by the AN Purchaser to the Department for comparison against information contained in the AN Purchaser's AN Registered User Number application.
In the event that a prospective AN Purchaser uses an agent to complete the transaction, the AN Seller would also be required to verify both (1) the agent's identity based upon a visual check of the agent's photo identification, and (2) that the agent is acting on the approved AN Purchaser's behalf.
Each of these required verification activities is described in greater detail in the following sections of the NPRM. Although the Department proposes to require these verification activities for sales and transfers of ammonium nitrate, DHS proposes not to require these verification activities prior to provision of ammonium nitrate application services. The Department seeks comments on its proposal not to require verification activities prior to provision of ammonium nitrate application services.
4. Verification of the Currency and Authenticity of a Prospective AN Purchaser's AN Registered User Number
In order to bolster the effectiveness of AN Registered User Numbers in preventing the misappropriation of ammonium nitrate, DHS proposes that the AN Seller will be required to verify the currency and authenticity of a prospective AN Purchaser's AN Registered User Number prior to completing a sale or transfer of ammonium nitrate. DHS proposes in section 31.305(a) to provide each AN Seller the capability to verify the currency and authenticity of a prospective AN Purchaser's AN Registered User Number either electronically through a web portal designed by the Department (the “Purchaser Verification Portal”) or telephonically through a call center maintained by the Department (the “Purchaser Verification Call Center”). The Department proposes in section 31.305(a)(3) to compare the prospective AN Purchaser's name and AN Registered User Number, which a prospective AN Purchaser would be required to provide an AN Seller for submission to DHS, to information contained in the Department's AN Registered User database, and to provide rapid confirmation or rejection of the prospective AN Purchaser's information to the AN Seller via the same mechanism (
i.e.,
the Purchaser Verification Portal or the Purchaser Verification Call Center). This approach provides a reasonable degree of confidence as to the currency and authenticity of the AN Purchaser's AN Registered User Number. Both the proposed Purchaser Verification Portal and the proposed Purchaser Verification Call Center are described in greater detail below.
Verification of a prospective AN Purchaser's AN Registered User Number would be required regardless of whether or not the AN Purchaser opts to use an agent on his or her behalf to take possession of ammonium nitrate.
5. Verification of a Prospective AN Purchaser's Identity When the AN Purchaser Opts Not To Use an Agent
Consistent with 6 U.S.C. 488a(e)(2)(D), the Department proposes that the AN Seller will be required to verify the prospective AN Purchaser's identity. If the AN Purchaser opts not to use an agent, DHS proposes in section 31.305(b) that the AN Seller would be required to verify, by performing a visual check of a photo identification document such as a driver's license or passport, the identity of the AN Purchaser no later than when the AN Purchaser directly takes possession of ammonium nitrate from the AN Seller at the completion of the sale or transfer.
The Department proposes using a definition of “photo identification document” similar to the definition used by the Department's Secure Flight Program, to establish what qualifies as an acceptable form of identification for this verification process. Specifically, in section 31.105, the Department proposes defining “photo identification document” as “[a]ny of the following documents containing a unique document number: (1) An unexpired passport issued by a foreign government which contains a photograph; or (2) An unexpired document issued by a U.S. Federal, State, or tribal government that includes the following information for the person: (i) Full name; (ii) date of birth; and (iii) photograph; or (3) Such other documents that the Department may designate as valid identification documents.”
Cf.
49 CFR 1560.3. The Department also assumes that each AN Purchaser and each AN Agent will possess a photo identification document. The Department seeks comments on this proposed requirement and assumption, including comment on the forms of identification that should be acceptable for purposes of the visual identification verification check.
6. Verification of a Prospective AN Purchaser's Identity When the AN Purchaser Opts to Use an Agent
Consistent with 6 U.S.C. 488a(e)(2)(D), the Department proposes in section 31.310(a) that the AN Seller will be required to verify the prospective AN Purchaser's identity with DHS when the prospective AN Purchaser chooses to use an agent to take possession of ammonium nitrate. Specifically, before completing a sale or transfer of ammonium nitrate the AN Seller would have to provide certain prospective AN Purchaser information (
e.g.,
name; photo identification document number; AN Registered User Number) to DHS either electronically through the Purchaser Verification Portal or telephonically through the Purchaser Verification Call Center. The Department proposes to compare this information, which a prospective AN Purchaser would be required to provide to an AN Seller for submission to the Department, to information contained in the Department's AN Registered User Database. The Department would provide rapid confirmation or rejection of the prospective AN Purchaser's information to the AN Seller via the same mechanism (
i.e.,
the Purchaser Verification Portal or the Purchaser Verification Call Center). The Department believes that this confirmation or rejection would take about the same amount of time as it takes merchants to receive credit card authorizations at retail stores.
This approach would enable use of an agent when it is not possible to verify the identity of the AN Purchaser in person (
i.e.,
by conducting a visual inspection of the photo identification of the AN Purchaser and comparing the photo identification with the AN Purchaser physically present). The Department seeks comments on this approach, including comments addressing whether AN Purchasers would be likely to provide identity verification information to AN Sellers themselves (
e.g.,
by providing this information to AN Sellers over the telephone), or whether AN Purchasers would be likely to ask their agents to provide this information to AN Sellers in person. DHS also seeks comments on the advisability, costs, and benefits of enabling agents to provide AN Purchasers' identity verification information directly to AN Sellers, and seeks comments on possible alternative methods that could be employed to verify AN Purchasers' identities in sales or transfers involving AN Agents.
Both the proposed Purchaser Verification Portal and the proposed Purchaser Verification Call Center are described in greater detail below.
7. For Sales Involving Agents, Verification That the Agent Is Acting on Behalf of the AN Purchaser
Subtitle J limits registration and vetting requirements to AN Purchasers, and does not extend registration and vetting requirements to the agents of AN Purchasers.
See
6 U.S.C. 488a(d) and 6 U.S.C. 488a(e). In order to help minimize the likelihood that agents would be used to circumvent the intentions of Subtitle J, the Department believes it is imperative for AN Sellers to ensure that an agent is acting at the direction of a registered AN Purchaser before the AN Seller transfers possession of ammonium nitrate to that agent. To accomplish this, the Department is considering various approaches:
(1) Requiring AN Purchasers to submit the names of their agents to DHS via the AN User Registration Portal, and requiring the AN Seller to confirm with DHS, prior to transferring possession of ammonium nitrate to an agent, that the name of that agent has been previously submitted to DHS by the relevant AN Purchaser.
(2) Requiring the AN Seller to orally confirm with the prospective AN Purchaser prior to each transfer of ammonium nitrate that the agent is acting on behalf of the AN Purchaser.
(3) Allowing both options, whereby an AN Seller first should check with DHS to see if the prospective AN Purchaser has submitted the name of the agent to DHS. If not, then the AN Seller would be required to orally confirm with the prospective AN Purchaser that the agent is acting on his/her behalf. DHS proposes this third approach in section 31.310(b) of the proposed rule.
Under the first approach, each AN Purchaser would be required to provide to DHS the names of any agents that might act on his/her behalf at the point of sale. AN Purchasers would submit names of agents to DHS via the AN User Registration Portal. An AN Purchaser could submit an agent's name when he/she applies for an AN Registered User Number or at any other time prior to conducting a purchase involving that agent. Then, prior to transferring possession of ammonium nitrate to an agent, an AN Seller would need to verify with the Department that the prospective AN Purchaser has designated the agent as an approved agent to represent the AN Purchaser at the point of sale. This verification would occur through the same mechanism that is used for the other prospective AN Purchaser identity verification activities (
i.e.,
the Purchaser Verification Portal or the Purchaser Verification Call Center). Note, however, that agent information that the AN Purchases and AN Sellers provided to the Department would not be vetted against the TSDB or otherwise checked by the Department; rather, it would simply be maintained in the AN Registered User Database as a data field linked to the AN Purchaser for use in the agent verification process.
Under the second approach, the Department would require an AN Seller to verify with the prospective AN Purchaser that the agent is actually acting on behalf of the prospective AN Purchaser for each specific transaction. Much like the other verification activities contained in the proposed rule, this could occur at the time the prospective AN Purchaser places the order, when the agent arrives to take possession of ammonium nitrate, or any other time, so long as it occurs prior to the AN Seller transferring possession of ammonium nitrate to the prospective AN Purchaser's agent. Note, if this approach were adopted, the Department would propose requiring this confirmation to occur for each transaction/occurrence in which an agent is taking possession of ammonium nitrate; a blanket verification of an agent by an AN Purchaser would not be acceptable. Additionally, as an e-mail or letter can be easily forged, under this approach the Department would require that the AN Seller receive this verification orally (
e.g.,
in person, telephonically) from the prospective AN Purchaser.
The third approach—the option the Department proposes to use in this NPRM—is a combination of the first two approaches. Specifically, AN Purchasers would be expected to provide the Department with the names of their agent(s), and an AN Seller would be expected to verify either through the Purchaser Verification Portal or Purchaser Verification Call Center that the agent information has been provided by the AN Purchaser to the Department. As opposed to the first approach under which a sale cannot occur unless the agent's name has been provided to the Department by the prospective AN Purchaser, this third option would allow the AN Seller to complete a sale or transfer after either (1) verifying that the agent has been designated by the prospective AN Purchaser through the Purchaser Verification Portal or Purchaser Verification Call Center, or (2) orally confirming with the prospective AN Purchaser that the agent is acting on the prospective AN Purchaser's behalf for the sale or transfer at issue. The Department expects that in the majority of cases, this oral confirmation would occur telephonically. This third option has the benefit of minimizing the point of sale impact of the agent verification process while allowing a means for a sale or transfer to be completed even if a prospective AN Purchaser forgets or is otherwise unable to provide the Department with the agent's name prior to using the agent at the point of sale. For these reasons, the Department proposes this third approach.
If DHS implements either the first approach or the third approach in an Ammonium Nitrate Security Program final rule, the Department will construct the AN User Registration Portal such that AN Purchasers could submit the names of their agents to DHS through that portal. If so, DHS woul
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