Chemical Weapons Convention and the Chemical Weapons Convention Implementation Act of 1998; Taking of Samples; Recordkeeping and Inspections

DEPARTMENT OF STATE

22 CFR Part 103

[Public Notice 3183]

RIN 1400-ZA01

Chemical Weapons Convention and the Chemical Weapons Convention

Implementation Act of 1998; Taking of Samples; Recordkeeping and

Inspections

AGENCY: Bureau of Arms Control, State.

ACTION: Final rule.

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SUMMARY: The Department of State is issuing this final rule to

implement the provisions of the Convention on the Prohibition of the

Development, Production, Stockpiling and Use of Chemical Weapons and on

Their Destruction, also known as the Chemical Weapons Convention (CWC

or Convention), and the Chemical Weapons Convention Implementation Act

of 1998 (Act) on the taking of samples and on the enforcement of the

requirements concerning record keeping and inspections. The Act

authorizes the United States Government to implement provisions of the

Convention. These regulations will enable the United States Government

to execute the relevant provisions of the Convention and the Act.

EFFECTIVE DATE: December 30, 1999.

FOR FURTHER INFORMATION CONTACT: Michael Coffee, Office of the Legal

Adviser (L/ACN), 2201 C Street, N.W., Washington, DC 20520.

SUPPLEMENTARY INFORMATION: In Part II of the July 21, 1999 Federal

Register, the Department of State (64 Fed. Reg. 39244) and the

Department of Commerce (64 Fed. Reg. 39194) published, with a thirty

day public comment period, proposed rules to implement provisions of

the Convention on the Prohibition of the Development, Production,

Stockpiling and Use of Chemical Weapons and on Their Destruction and

the Chemical Weapons Convention Implementation Act of 1998.

On April 25, 1997, the United States ratified the CWC. The

Convention is both an arms control and nonproliferation treaty. As

such, the Convention bans the development, production, stockpiling, and

use of chemical weapons, and prohibits States Parties from assisting or

encouraging anyone to engage in any activity prohibited by the

Convention. States Parties to the Convention, including the United

States, have agreed to a comprehensive verification regime that

provides transparency and ensures that no State Party to the Convention

is engaging in activity prohibited by the Convention. The verification

regime includes declarations and reports by, and on-site inspection of,

facilities engaged in or formerly engaged in activities involving

certain chemicals. To further its nonproliferation objectives, the

Convention requires restrictions on the import and export of certain

chemicals. This rule implements Secs. 304(f)(1) and 501 of the Chemical

Weapons Convention Implementation Act of 1998, 22 U.S.C. 6701 et seq.

These regulations provide the guidelines under which the taking of a

sample may be required during an on-site inspection conducted pursuant

to the Convention. These regulations will also establish the civil

enforcement regime for a violation of Secs. 306 or 405 of the Act.

A number of responses were received by the Department of State.

Following are relevant comments raised as well as the Department of

State's response.

[[Page 73812]]

1. Conformity with the Department of Commerce's Regulations. One

respondent indicated that the Departments of State's and Commerce's

proposed regulations implementing the Convention and the Act did not

always conform. The regulations have been modified to be more

consistent.

2. Definitions. One respondent indicated that the definition of

Administrative Law Judge was circular. As Administrative Law Judges are

established by Title 5 of the United States Code, and are already

defined in Sec. 719.1(b) of the Department of Commerce's regulations,

the term will not be defined in this rule. At the request of the same

respondent, ``Inspection assistant'' has been defined. The same

respondent requested a definition of ``Site representatives.'' Because

the term is self-explanatory, it will not be defined in this rule.

3. Consultation with facility prior to requiring a sample. All

respondents requested that the Host Team Leader communicate with a

representative of the site prior to the requirement of a sample. In

practice, the site representative will be involved throughout the

inspection. In Sec. 103.3(a), the rule now explicitly gives the site

representative the right to communicate reasons for which a sample

should not be required.

4. Voluntary provision of samples. One respondent stated that a

facility should be able to provide a sample without being required to

do so. Although the section requiring the provision of samples had been

drafted for situations in which samples are not volunteered, a new

provision has been inserted in Sec. 103.3(a) recognizing that samples

may be voluntarily provided.

5. Written notification of requirement to provide a sample. One

respondent requested that the notification of a requirement to provide

a sample be in writing. This request has been approved, and is

reflected in Sec. 103.3(b).

6. Purpose of analysis of samples. All respondents commented on the

limitation of the language concerning the reasons for analysis of

samples. The provision has been deleted as it is unnecessary. Part II,

paragraph 39, of the Convention's Verification Annex already provides

that the Inspection Team may only engage in activities that are

necessary to discharge its functions.

7. On-site analysis of samples. All respondents recommended that

samples be analyzed on-site, where possible. This will occur pursuant

to paragraph 53 of Part II of the Convention's Verification Annex,

which provides that ``[w]here possible, the analysis of samples shall

be performed on-site.''

8. Observing the taking of a sample. One respondent suggested that

the owner or operator of a facility should be permitted to observe the

taking of a sample. The owner or operator, occupant or agent in charge

of the inspected premises already has the right to decide whether a

representative of the premises will take the sample. The rule has been

modified in Sec. 103.3(f) to explicitly allow the owner or operator,

occupant or agent in charge of the inspected premises to elect to have

a representative present during the taking of a sample.

9. United States National Authority (USNA) decision that a sample

is not required. One respondent requested clarification that a decision

by the USNA not to require a sample will result in no requirement to

provide a sample. The rule has been modified in Sec. 103.3(e)(2)

accordingly.

10. Failure to comply with section 103.3 of this rule. One

respondent has questioned the text in Sec. 103.3(i). Because a failure

to provide a required sample might delay or impede an inspection, it

may be determined to be a violation of Sec. 306 of the Act.

11. Handling of samples. One respondent has recommended that

samples should be handled in a manner consistent with facility rules.

Such a provision belongs in a facility agreement between the United

States and the Organization for the Prohibition of Chemical Weapons.

12. Interpretation of Sections 306 and 405 of the Act. All

respondents sought clarity concerning actions that will be considered

violations of sections 306 and 405 of the Act. Because determinations

of violations are fact-specific, it would be impossible to adequately

``interpret'' these provisions in this rule.

13. Recordkeeping Requirement. One respondent stated that

Sec. 103.5(b)(3) of the proposed rule exceeded the authority of

Sec. 405(3) of the Act. That provision had been modified to provide

clarity to the public. However, to avoid confusion, Sec. 103.5(b)(3)

now repeats the language of Sec. 405(3) of the Act.

14. Requesting a hearing. One respondent suggested that thirty (30)

days should be permitted to respond to a Notice of Violation and

Assessment and a proposed order. Because Sec. 501(a)(2)(A) of the Act

establishes a fifteen (15) day timeframe for a response, this rule

permits only fifteen (15) days for a response.

15. Computation of time for section 103.8 of this rule. One

respondent requested that this rule adopt rules to compute time for

purposes of Sec. 103.8. A computation rule is included in

Sec. 103.8(c).

16. Timing of review of initial decision. All respondents requested

more time during the review of the initial decision in Sec. 103.8(a).

Under Sec. 501(a)(3) of the Act, an initial decision and order becomes

final unless the head of the USNA modifies or vacates the decision and

order within thirty (30) days. Minor changes were made to the timelines

in Sec. 103.8(a) to the extent possible, consistent with Sec. 501(a)(3)

of the Act.

17. Introduction of new or additional evidence. One respondent

recommended that new or additional evidence be permitted during the

review of an initial decision. Text has been deleted from

Sec. 103.8(a)(2); instead Sec. 557 of the Administrative Procedure Act

shall govern.

18. Oral Argument. Two respondents recommended that oral argument

should not be explicitly precluded. Section 103.8(a)(6) no longer

explicitly precludes oral argument. The Administrative Law Judge will

have discretion in permitting oral argument.

Administrative Procedure Act Requirements

Because this rule involves a foreign affairs function of the United

States, it is not subject to 5 U.S.C. 553 and 554. However, the

Department has previously issued this rule in proposed form and

comments were encouraged for the development of this final rule.

Regulatory Flexibility Analysis

Because this rule involves a foreign affairs function of the United

States, the Department of State is not required to prepare a regulatory

flexibility analysis.

Executive Order 12866 Determiniation

This rule is exempt from Executive Order 12866, but has been

reviewed internally by the Department to ensure consistency with the

purposes thereof.

Paperwork Reduction Act Statement

Section 103.5(b) of this rule states that no person may willfully

fail or refuse: (1) to establish or maintain any record required under

the Chemical Weapons Convention Implementation Act or 15 CFR Parts 710

through 722; (2) to submit any report, notice, or other information

prescribed by the Act or 15 CFR Parts 710 through 722; or (3) to permit

access to or copying of any record that is exempt from disclosure under

the Act or 15 CFR Parts 710 through 722.

Notwithstanding any other provision of law, no person is required,

nor shall any person be subject to a penalty for failure, to comply

with a collection of

[[Page 73813]]

information, subject to the Paperwork Reduction Act (PRA), unless that

collection of information displays a currently valid OMB Control

Number. In promulgating 15 CFR Parts 710 through 722, the Department of

Commerce revised an existing collection of information requirement

subject to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et

seq.), which has been submitted for approval to the Office of

Management and Budget. Accordingly, the Department of State will not

seek the approval of the Office of Management and Budget. The public

reporting burdens for the new collections of information are estimated

to average 9 hours for Schedule 1 chemicals, 7.2 hours for Schedule 2

chemicals, 2.5 hours for Schedule 3 chemicals, 5.3 hours for

unscheduled discrete organic chemicals, and .17 hours for Schedule 1

notifications. These estimates include the time required to complete

the required forms.

Unfunded Mandates Reform Act Requirements

No actions are necessary under the provisions of the Unfunded

Mandates Reform Act of 1995.

Federalism Assessment

Because this rule will not have a substantial direct effect on the

states, on the relationship between the national government and the

states, or on the distribution of power and responsibilities among the

various levels of government, a Federalism Assessment is not warranted.

List of Subjects in 22 CFR Part 103

Administrative practice and procedures, Chemicals, Foreign

relations, Freedom of information, International organizations,

Investigations, National security information, Penalties, Reporting and

recordkeeping requirements, Treaties.

For the reasons set forth in the preamble, the Department adds to

subchapter K the following part 103 to Title 22 of the Code of Federal

Regulations:

PART 103--REGULATIONS FOR IMPLEMENTATION OF THE CHEMICAL WEAPONS

CONVENTION AND THE CHEMICAL WEAPONS CONVENTION IMPLEMENTATION ACT

OF 1998 ON THE TAKING OF SAMPLES AND ON ENFORCEMENT OF REQUIREMENTS

CONCERNING RECORDKEEPING AND INSPECTIONS

Subpart A--General

Sec.

103.1 Purpose.

103.2 Definitions.

Subpart B--Samples

103.3 Requirement to provide a sample.

Subpart C--Recordkeeping and Inspection Requirements

103.4 General.

103.5 Violations.

103.6 Penalties.

103.7 Initiation of administrative enforcement proceedings.

103.8 Final agency decision after administrative proceedings.

103.9 Final agency decision after settlement negotiations.

103.10 Appeals.

103.11 Payment of final assessment.

103.12 Reporting a violation.

Authority: Pub. L. 105-277, 112 Stat. 2681, Div. I (22 U.S.C.

6701 et seq.).

Subpart A--General

Sec. 103.1 Purpose.

This part is intended to implement sections 304(f)(1) and 501 of

the Chemical Weapons Convention Implementation Act of 1998 (Act), 22

U.S.C. 6701 et seq. The Chemical Weapons Convention Regulations

promulgated by the Department of Commerce, 15 CFR Parts 710 through

722, also implement sections of the Act.

Sec. 103.2 Definitions.

The following are definitions of terms as used in this part only.

Bureau of Export Administration (BXA). The Bureau of Export

Administration of the United States Department of Commerce, including

the Office of Export Administration and the Office of Export

Enforcement.

Chemical Weapons Convention (CWC or Convention). The Convention on

the Prohibition of the Development, Production, Stockpiling and Use of

Chemical Weapons and on Their Destruction, and its annexes opened for

signature on January 13, 1993, and entered into force on April 29,

1997.

CWCIA. The Chemical Weapons Convention Implementation Act of 1998.

(22 U.S.C. 6701 et seq.)

CWCR. The Chemical Weapons Convention Regulations promulgated by

the Department of Commerce. (15 CFR parts 710 through 722.)

Executive Director. The Executive Director, Office of the Legal

Adviser, U.S. Department of State.

Facility agreement. A written agreement or arrangement between a

State Party to the Convention and the Organization for the Prohibition

of Chemical Weapons relating to a specific facility subject to on-site

verification pursuant to Articles IV, V, and VI of the Convention.

Final decision. A decision or order assessing a civil penalty, or

otherwise disposing of or dismissing a case, which is not subject to

further administrative review under this part, but which may be subject

to collection proceedings or judicial review in an appropriate federal

court as authorized by law.

Host Team. The U.S. Government team that accompanies the Inspection

Team during a CWC inspection to which this part applies.

Host Team Leader. The head of the U.S. Government team that hosts

and accompanies the Inspection Team during a CWC inspection to which

this part applies.

Inspection assistant. An individual designated by the Technical

Secretariat to assist inspectors in an inspection, such as medical,

security and administrative personnel and interpreters.

Inspection Team. The group of inspectors and inspection assistants

assigned by the Director-General of the OPCW's Technical Secretariat to

conduct a particular inspection.

Lead agency. The executive department or agency responsible for

implementation of the CWC declaration and inspection requirements for

specified facilities. The lead agencies are the Department of Defense

(DOD) for facilities owned and operated by DOD (including those

operated by contractors to the agency), and those facilities leased to

and operated by DOD (including those operated by contractors to the

agency); the Department of Energy (DOE) for facilities owned and

operated by DOE (including those operated by contractors to the

agency), and those facilities leased to and operated by DOE (including

those operated by contractors to the agency), including the National

Laboratories and components of the nuclear weapons complex; and the

Department of Commerce (DOC) for all facilities that are not owned and

operated by or leased to and operated by DOD, DOE or other U.S.

Government agencies. Other departments and agencies that have notified

the United States National Authority of their decision to be excluded

from the CWCR shall also have lead agency responsibilities for

facilities that are

[[Page 73814]]

owned or operated by (including those operated by contractors to the

agency), or that are leased to or operated by, those other departments

and agencies (including those operated by contractors to the agency).

Office of Chemical and Biological Weapons Conventions. The office

in the Bureau of Arms Control of the United States Department of State

that includes the United States National Authority Coordinating Staff.

Organization for the Prohibition of Chemical Weapons (OPCW). The

entity established by the Convention to achieve the object and purpose

of the Convention, to ensure the implementation of its provisions,

including those for international verification of compliance with it,

and to provide a forum for consultation and cooperation among States

Parties.

Party. The United States Department of State and any person named

as a respondent under this part.

Perimeter. In case of a challenge inspection, the external boundary

of the site, defined by either geographic coordinates or description on

a map.

Person. Any individual, corporation, partnership, firm,

association, trust, estate, public or private institution, any State or

any political subdivision thereof, or any political entity within a

State, any foreign government or nation or any agency, instrumentality

or political subdivision of any such government or nation, or other

entity located in the United States.

Respondent. Any person named as the subject of a letter of intent

to charge, or a Notice of Violation and Assessment (NOVA) and proposed

order.

Secretary. The Secretary of State.

Technical Secretariat. The Technical Secretariat of the

Organization for the Prohibition of Chemical Weapons established by the

Chemical Weapons Convention.

United States National Authority. The Department of State serving

as the national focal point for effective liaison with the Organization

for the Prohibition of Chemical Weapons and States Parties to the

Convention and implementing the provisions of the CWCIA in coordination

with an interagency group designated by the President consisting of the

Secretary of Defense, the Attorney General, the Secretary of Commerce,

the Secretary of Energy, the Chairman of the Joint Chiefs of Staff and

the heads of agencies considered necessary or advisable by the

President, or their designees. The Secretary of State is the Director

of the United States National Authority.

Subpart B--Samples

Sec. 103.3 Requirement to provide a sample.

(a) Voluntary provision of a sample. The Host Team Leader will

notify appropriate site representatives of any request by an Inspection

Team to take a sample. At the request of the appropriate site

representative, this notification will be in writing. A site

representative may volunteer to provide a sample to the Inspection

Team, or may communicate to the Host Team Leader any reason for which

the representative believes a sample should not be required.

(b) Notification of requirement to provide a sample. If a sample is

not provided pursuant to paragraph (a) of this section, the Host Team

Leader will notify, in writing, the owner or operator, occupant or

agent in charge of an inspected premises of any requirement, under

paragraph (c) or (e) of this section, to provide a sample pursuant to a

request, made in accordance with paragraph (k) of this section, of an

Inspection Team of the Technical Secretariat.

(c) Requirement to provide a sample. Pursuant to section 304(f)(1)

of the CWCIA, unless a lead agency advises the United States National

Authority pursuant to paragraph (d) of this section, the owner or

operator, occupant or agent in charge of the premises to be inspected

is hereby required to provide a sample pursuant to a request, made in

accordance with paragraph (k) of this section, of an Inspection Team of

the Technical Secretariat that a sample be taken in accordance with the

applicable provisions contained in the Chemical Weapons Convention and

the CWCIA.

(d) Consultations with the United States National Authority. After

consulting with the Host Team Leader, a lead agency that finds that any

of the following conditions, as modified pursuant to paragraph (j) of

this section if applicable, may not have been satisfied shall promptly

advise the United States National Authority, which, in coordination

with the interagency group designated by the President in section 2 of

Executive Order 13128, shall make a decision:

(1) The taking of a sample is consistent with the inspection aims

under the Convention and with its Confidentiality Annex;

(2) The taking of a sample does not unnecessarily hamper or delay

the operation of a facility or affect its safety, and is arranged so as

to ensure the timely and effective discharge of the Inspection Team's

functions with the least possible inconvenience and disturbance to the

facility;

(3) The taking of a sample is consistent with the applicable

facility agreement. In particular:

(i) Any sample will be taken at sampling points agreed to in the

relevant facility agreement; and

(ii) Any sample will be taken according to procedures agreed to in

the relevant facility agreement;

(4) In the absence of a facility agreement, due consideration is

given to existing sampling points used by the owner or operator,

occupant or agent in charge of the premises, consistent with any

procedures developed pursuant to the CWCR (15 CFR parts 710 through

722);

(5) The taking of a sample does not affect the safety of the

premises and will be consistent with safety regulations established at

the premises, including those for protection of controlled environments

within a facility and for personal safety;

(6) The taking of a sample does not pose a threat to the national

security interests of the United States; and

(7) The taking of a sample is consistent with any conditions

negotiated pursuant to paragraph (j) of this section, if applicable.

(e) Determination by United States National Authority. (1) If,

after being advised by the lead agency pursuant to paragraph (d) of

this section, the United States National Authority, in coordination

with the interagency group designated by the President to implement the

provisions of the CWCIA, determines that all of the conditions of

paragraph (d) are satisfied and that a sample shall be required, then

the owner or the operator, occupant or agent in charge of the premises

shall provide a sample pursuant to a request of the Inspection Team of

the Technical Secretariat.

(2) If, however, after being advised by the lead agency pursuant to

paragraph (d) of this section, the United States National Authority, in

coordination with the interagency group designated by the President to

implement the provisions of the CWCIA, determines that any of the

conditions of paragraph (d) are not satisfied and that a sample shall

not be required, then the owner or the operator, occupant or agent in

charge of the premises shall not be required to provide a sample

pursuant to a request of the Inspection Team of the Technical

Secretariat.

(f) Person to take a sample. If a sample is required, the owner or

the operator, occupant or agent in charge of the inspected premises

will determine whether the sample will be taken by a representative of

the premises, the Inspection Team, or any other

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individual present. The owner or the operator, occupant or agent in

charge of the inspected premises may elect to have a representative

present during the taking of a sample.

(g) Requirement that samples remain in the United States. No sample

collected in the United States pursuant to an inspection permitted by

the CWCIA may be transferred for analysis to any laboratory outside the

territory of the United States.

(h) Handling of samples. Samples will be handled in accordance with

the Convention, the CWCIA, other applicable law, and the provisions of

any applicable facility agreement.

(i) Failure to comply with this section. Failure by any person to

comply with this section may be treated as a violation of section 306

of the Act and section 103.5(a).

(j) Conditions that restrict sampling activities during challenge

inspections. During challenge inspections within the inspected premises

the Host Team may negotiate conditions that restrict activities

regarding sampling, e.g., conditions that restrict where, when, and how

samples are taken, whether samples are removed from the site, and how

samples are analyzed.

(k) Format of Inspection Team request. It is the policy of the

United States Government that Inspection Team requests for samples

should be in written form from the head of the Inspection Team. When

necessary, before a sample is required to be provided, the Host Team

Leader should seek a written request from the head of the Inspection

Team.

(l) Requirement to provide a sample in the band around the outside

of the perimeter during a challenge inspection. In a band, not to

exceed a width of 50 meters, around the outside of the perimeter of the

inspected site, the Inspection Team, during a challenge inpsection, may

take wipes, air, soil or effluent samples where either:

(1) There is consent; or

(2) Such activity is authorized by a search warrant obtained

pursuant to section 305(b)(4) of the CWCIA.

Subpart C--Recordkeeping and Inspection Requirements

Sec. 103.4 General.

This subpart implements the enforcement of the civil penalty

provisions of section 501 of the Chemical Weapons Convention

Implementation Act of 1998 (CWCIA), and sets forth relevant

administrative proceedings by which such violations are adjudicated.

Both the Department of State (in this subpart), and the Department of

Commerce (in part 719 of the CWCR at 15 CFR parts 710 through 722) are

involved in the implementation and enforcement of section 501.

Sec. 103.5 Violations.

(a) Refusal to permit entry or inspection. No person may willfully

fail or refuse to permit entry or inspection, or disrupt, delay or

otherwise impede an inspection, authorized by the CWCIA.

(b) Failure to establish or maintain records. No person may

willfully fail or refuse:

(1) To establish or maintain any record required by the CWCIA or

the Chemical Weapons Convention Regulations (CWCR, 15 CFR parts 710

through 722) of the Department of Commerce; or

(2) To submit any report, notice, or other information to the

United States Government in accordance with the CWCIA or CWCR; or

(3) To permit access to or copying of any record that is exempt

from disclosure under the CWCIA or the CWCR.

Sec. 103.6 Penalties.

(a) Civil penalties. (1) Civil penalty for refusal to permit entry

or inspection. Any person that is determined to have willfully failed

or refused to permit entry or inspection, or to have willfully

disrupted, delayed or otherwise impeded an authorized inspection, as

set forth in Sec. 103.5(a), shall pay a civil penalty in an amount not

to exceed $25,000 for each violation. Each day the violation continues

constitutes a separate violation.

(2) Civil penalty for failure to establish or maintain records. Any

person that is determined to have willfully failed or refused to

establish or maintain any record, or to submit any report, notice, or

other information required by the CWCIA or the CWCR, or to permit

access to or copying of any record exempt from disclosure under the

CWCIA or CWCR as set forth in Sec. 103.5(b), shall pay a civil penalty

in an amount not to exceed $5,000 for each violation.

(b) Criminal penalties. Any person that knowingly violates the

CWCIA by willfully failing or refusing to permit entry or inspection;

or by disrupting, delaying or otherwise impeding an inspection

authorized by the CWCIA; or by willfully failing or refusing to

establish or maintain any required record, or to submit any required

report, notice, or other information; or by willfully failing or

refusing to permit access to or copying of any record exempt from

disclosure under the CWCIA or CWCR, shall, in addition to or in lieu of

any civil penalty that may be imposed, be fined under Title 18 of the

United States Code, or be imprisoned for not more than one year, or

both.

(c) Other remedial action. (1) Injunction. The United States may,

in a civil action, obtain an injunction against:

(i) The conduct prohibited under 18 U.S.C. 229 or 229C; or

(ii) The preparation or solicitation to engage in conduct

prohibited under 18 U.S.C. 229 or 229D.

(2) In addition, the United States may, in a civil action, restrain

any violation of section 306 or section 405 of the CWCIA, or compel the

taking of any action required by or under the CWCIA or the Convention.

Sec. 103.7 Initiation of administrative enforcement proceedings.

(a) Issuance of Notice of Violation and Assessment (NOVA). The

Director of the Office of Export Enforcement, Bureau of Export

Administration, Department of Commerce, may request that the Secretary

initiate an administrative enforcement proceeding under this section

and 15 CFR 719.5. If the request is in accordance with applicable law,

the Secretary will initiate an administrative enforcement proceeding by

issuing a Notice of Violation and Assessment (NOVA). The Office of

Chief Counsel for Export Administration, Department of Commerce shall

serve the NOVA as directed by the Secretary.

(b) Content of NOVA. The NOVA shall constitute a formal complaint,

and will set forth the basis for the issuance of the proposed order. It

will set forth the alleged violation(s) and the essential facts with

respect to the alleged violation(s), reference the relevant statutory,

regulatory or other provisions, and state the amount of the civil

penalty to be assessed. The NOVA will inform the respondent of the

right to request a hearing pursuant to paragraph (e) of this section

and the CWCR (15 CFR parts 710 through 722) at 15 CFR 719.6, inform the

respondent that failure to request such a hearing shall result in the

proposed order becoming final and unappealable on signature of the

Secretary of State, and provide payment instructions. A copy of the

regulations that govern the administrative proceedings will accompany

the NOVA.

(c) Proposed order. A proposed order shall accompany every NOVA. It

will briefly set forth the substance of the alleged violation(s) and

the statutory, regulatory or other provisions violated. It will state

the amount of the civil penalty to be assessed.

[[Page 73816]]

(d) Notice. The Secretary shall notify, via the Department of

Commerce, the respondent (or respondent's agent for service of process

or attorney) of the initiation of administrative proceedings by

sending, via first class mail, facsimile, or by personal delivery, the

relevant documents.

(e) Time to answer. If the respondent wishes to contest the NOVA

and proposed order issued by the Secretary, the respondent must request

a hearing in writing within 15 days from the date of the NOVA. If the

respondent requests a hearing, the respondent must answer the NOVA

within 30 days from the date of the request for hearing. The request

for hearing and answer must be filed with the Administrative Law Judge

(ALJ), along with a copy of the NOVA and proposed order, and served on

the Office of Chief Counsel for Export Administration, Department of

Commerce, and any other address(es) specified in the NOVA, in

accordance with 15 CFR 719.8.

(f) Content of answer. The respondent's answer must be responsive

to the NOVA and proposed order, and must fully set forth the nature of

the respondent's defense(s). The answer must specifically admit or deny

each separate allegation in the NOVA; if the respondent is without

knowledge, the answer will so state and will operate as a denial.

Failure to deny or controvert a particular allegation will be deemed an

admission of that allegation. The answer must also set forth any

additional or new matter the respondent believes supports a defense or

claim of mitigation. Any defense or partial defense not specifically

set forth in the answer shall be deemed waived, and evidence thereon

may be refused, except for good cause shown.

(g) English required. The request for hearing, answer, and all

other papers and documentary evidence must be submitted in English.

(h) Waiver. The failure of the respondent to file a request for a

hearing and an answer within the times provided constitutes a waiver of

the respondent's right to appear and contest the allegations set forth

in the NOVA and proposed order. If no hearing is requested and no

answer is provided, the Secretary will sign the proposed order, which

shall, upon signature, become final and unappealable.

(i) Administrative procedures. The regulations that govern the

administrative procedures that apply when a hearing is requested are

set forth in the CWCR at 15 CFR part 719.

Sec. 103.8 Final agency decision after administrative proceedings.

(a) Review of initial decision.

(1) Petition for review. Any party may, within 7 days of the

Administrative Law Judge's (ALJ) certification of the initial decision

and order, petition the Secretary for review of the initial decision. A

petition for review shall be addressed to and served on the Executive

Director of the Office of the Legal Adviser, U.S. Department of State,

2201 C Street, N.W., Room 5519, Washington D.C. 20520, and shall also

be served on the Chief Counsel for Export Administration, U.S.

Department of Commerce, 14th Street and Constitution Avenue, N.W., Room

H-3839, Washington, D.C. 20230, and on the respondent. Petitions for

review may be filed only on one or more of the following grounds:

(i) That a necessary finding of fact is omitted, erroneous or not

supported by substantial evidence of record;

(ii) That a necessary legal conclusion or finding is contrary to

law;

(iii) That a prejudicial procedural error has occurred; or

(iv) That the decision or the extent of sanctions is arbitrary,

capricious or an abuse of discretion.

(2) Content of petition for review. The petition must specifically

set forth the grounds on which review is requested and be supported by

citations to the record, statutes, regulations, and principal

authorities.

(3) Decision to review. Review of the initial decision by the

Secretary is discretionary, and is not a matter of right. The Secretary

shall accept or decline review of the initial decision and order within

3 days after a petition for review is filed. If no such petition is

filed, the Secretary may, on his or her own initiative, notify the

parties within 10 days after the ALJ's certification of the initial

decision and order that he or she intends to exercise his or her

discretion to review the initial decision.

(4) Effect of decision to review. The initial decision is stayed

until further order of the Secretary upon a timely petition for review,

or upon action to review taken by the Secretary on his or her own

initiative.

(5) Review declined. If the Secretary declines to exercise

discretionary review, such order, and the resulting final agency

decision, will be served on all parties personally, by overnight mail,

or by registered or certified mail, return receipt requested. The

Secretary need not give reasons for declining review.

(6) Review accepted. If the Secretary grants a petition for review

or decides to review the initial decision on his or her own initiative,

he or she will issue an order confirming that acceptance and specifying

any issues to be briefed by all parties within 10 days after the order.

Briefing shall be limited to the issues specified in the order. Only

those issues specified in the order will be considered by the

Secretary. The parties may, within 5 days after the filing of any brief

of the issues, file and serve a reply to that brief. The Department of

Commerce shall review all written submissions, and, based on the

record, make a recommendation to the Secretary as to whether the ALJ's

initial decision should be modified or vacated. The Secretary will make

a final decision within 30 days after the ALJ's certification of the

initial decision and order.

(b) Final decision. Unless the Secretary, within 30 days after the

date of the ALJ's certification of the initial decision and order,

modifies or vacates the decision and order, with or without conditions,

the ALJ's initial decision and order shall become effective as the

final decision and order of the United States Government. If the

Secretary does modify or vacate the initial decision and order, that

decision and order of the Secretary shall become the final decision and

order of the United States Government. The final decision and order

shall be served on the parties and will be made available to the

public.

(c) Computation of time for the purposes of this section. In

computing any period of time prescribed or allowed by this section, the

day of the act, event, or default from which the designated period of

time begins to run is not included. The last day of the period is

computed to be included unless it is a Saturday, a Sunday, or a legal

holiday (as defined in Rule 6(a) of the Federal Rules of Civil

Procedure), in which case the period runs until the end of the next day

that is neither a Saturday, a Sunday, nor a legal holiday. Intermediate

Saturdays, Sundays, and legal holidays are excluded from the

computation when the period of time prescribed or allowed is 7 days or

less.

Sec. 103.9 Final agency decision after settlement negotiations.

(a) Settlements based on letter of intent to charge.--(1) Approval

of settlement. Pursuant to Sec. 719.5(b) of the CWCR (15 CFR parts 710

through 722), the Department of Commerce may notify a respondent by

letter of the intent to charge. If, following the issuance of such a

letter of intent to charge, the Department of Commerce and respondent

reach an agreement to settle a case, the Department of Commerce will

recommend the proposed settlement to the Secretary. If the

[[Page 73817]]

recommended settlement is in accordance with applicable law the

Secretary will approve and sign it. No action is required by the ALJ in

cases where the Secretary approves and signs such a settlement

agreement and order.

(2) Refusal to approve settlement. If the Secretary refuses to

approve the recommended settlement, the Secretary will notify the

parties and the case will proceed as though no settlement proposal had

been made.

(b) Settlements following issuance of a NOVA.--(1) Approval of

settlement. When the Department of Commerce and respondent reach an

agreement to settle a case after administrative proceedings have been

initiated before an ALJ, the Department of Commerce will recommend the

settlement to the Secretary of State. If the recommended settlement is

in accordance with applicable law, the Secretary will approve and sign

it. If the Secretary approves the settlement, the Secretary shall

notify the ALJ that the case is withdrawn from adjudication.

(2) Refusal to approve settlement. If the Secretary of State

refuses to approve the recommended settlement, the Secretary will

notify the parties of the disapproval, and the case will proceed as

though no settlement proposal had been made.

(c) Scope of settlement. Any respondent who agrees to an order

imposing any administrative sanction does so solely for the purpose of

resolving the claims in the administrative enforcement proceeding

brought pursuant to this part. This reflects the fact that the

Government officials involved have neither the authority nor the

responsibility for initiating, conducting, settling, or otherwise

disposing of criminal proceedings. That authority and responsibility is

vested in the Attorney General and the Department of Justice.

(d) Finality. Cases that are settled may not be reopened or

appealed.

Sec. 103.10 Appeals.

Any person adversely affected by a final order respecting an

assessment may, within 30 days after the final order is issued, file a

petition in the Court of Appeals for the District of Columbia Circuit

or for any other circuit in which the person resides or transacts

business, to appeal the order.

Sec. 103.11 Payment of final assessment.

(a) Time for payment. Full payment of the civil penalty must be

made within 30 days of the date upon which the final order becomes

effective, or within the time specified in the order. Payment shall be

made in the manner specified in the NOVA.

(b) Enforcement of order. The Secretary, through the Attorney

General, may file suit in an appropriate district court if necessary to

enforce compliance with a final order issued pursuant to this part.

This suit will include a claim for interest at current prevailing rates

from the date payment was due or ordered or, if an appeal was filed

pursuant to Sec. 103.10, from the date of final judgment.

(c) Offsets. The amount of any civil penalty imposed by a final

order may be deducted from any sum(s) owed by the United States to a

respondent.

Sec. 103.12 Reporting a violation.

If a person learns that a violation of the Convention, the CWCIA,

this part, or the CWCR (15 CFR parts 710 through 722) has occurred or

may occur, that person may notify: United States National Authority,

Office of Chemical and Biological Weapons Conventions, Bureau of Arms

Control, U.S. Department of State, Washington, DC 20520, Telephone:

(703) 235-1204 or toll-free (877) CWC-NACS ((877) 292-6227), Facsimile:

(703) 235-1065.

Avis Bohlen,

Assistant Secretary of State, Bureau of Arms Control.

[FR Doc. 99-33239 Filed 12-29-99; 8:45 am]

BILLING CODE 4710-27-P