US embassy cable - 04THEHAGUE733

UNCLAS SECTION 01 OF 05 THE HAGUE 000733 
 
SIPDIS 
 
STATE FOR AC/CB, NP/CBM, VC/CCB, L/ACV, IO/S 
SECDEF FOR OSD/ISP 
JOINT STAFF FOR DD PMA-A FOR WTC 
COMMERCE FOR BIS (GOLDMAN) 
NSC FOR CHUPA 
WINPAC FOR LIEPMAN 
 
E.O. 12958: N/A 
TAGS: PARM, PREL, EIND, CWC 
SUBJECT: CHEMICAL WEAPONS CONVENTION (CWC): WRAP-UP CABLE - 
INDUSTRY INTERSESSIONALS, MARCH 2004 
 
 This is CWC-37-04. 
 
------- 
Summary 
------- 
 
1.  (U) As a result of the March industry cluster meetings, 
the March Executive Council will have several industry issues 
for States Parties to consider.  Two decisions, one on 
Captive Use and the other on Clarification Requests, appear 
ripe for adoption by the Executive Council.  In addition, 
three sets of EC report language have been circulated which 
contain 'actionable' instructions to the Technical 
Secretariat by States Parties to improve operations in the 
 
SIPDIS 
areas of transfer discrepancy clarification requests, 
Schedule 2 facility agreements, and streamlining of the 
Declaration Handbook. 
 
----------- 
Captive Use 
----------- 
 
2.  (U) Discussions on Captive Use focused on whether States 
Parties consider it necessary to clarify Schedule 1 captive 
use production as declarable.  However, as an introductory 
comment, the facilitator (Rudduck, UK) noted that consensus 
on Schedule 2/3 Captive Use has yet to be joined by the 
Indian delegation.  In response, the Indian delegation 
acknowledged it still lacks guidance, but indicated it 
expects to have guidance in time for the 36th Executive 
Council Session, scheduled for March 23-26.  Regarding 
Schedule 1 captive use production, although States Parties 
appear to agree that Schedule 1 captive use production is 
declarable, some States Parties argued that a decision is 
unnecessary because no such production has been demonstrated 
to be taking place. 
 
3.  (U) States Parties, including Canada, India, Denmark and 
Italy voiced concern with establishing 'rules for the sake of 
rules,' despite the examples (especially of the synthetic 
pain-killer, Meperidine or Pethidine) provided in the German 
paper circulated in January 2004.  In defense of the need to 
clarify that Schedule 1 captive use production is declarable, 
Germany argued that even if companies altered the pathways or 
found substitutes to the examples provided, the case remains 
that the Schedule 1 intermediate pathway is in the 
open-source and its use cannot be ruled out. 
 
4.  (U) Del indicated that, under U.S. regulations, 
production of a Schedule 1 chemical in excess of applicable 
thresholds must be declared, regardless of its status as an 
intermediate or final product.  Del indicated further that 
the examples provided by the German delegation, especially 
those involving published pathways using Schedule 1 as 
intermediates, indicate past production and consumption of 
Schedule 1 in 'captive use' situations.  Noting that, 
although the U.S. is not aware of any such current production 
using these pathways, further consideration of this issue by 
States Parties appears warranted to ensure that States 
Parties understand "all" subject production is declared, per 
the Convention.  The discussion concluded with an appeal by 
the facilitator for experts to further consider the German 
paper and examples. 
 
---------------------------------- 
Schedule 2A/2A* Low Concentrations 
---------------------------------- 
 
5  (U) To assist in deliberations, the facilitator (Wade, UK) 
circulated both a revised decision text and a UK paper 
regarding proliferation risk of PFIB to States Parties. 
During the consultations, States Parties primarily focused on 
proliferation risk and associated low concentration of PFIB. 
 
6.  (U) In a break from the norm, Japan was most outspoken, 
indicating it does not view information provided by the UK as 
sufficient to justify a low concentration for PFIB.  Japan 
noted their legislation currently adopts a 30% concentration 
for Schedule 2A/2A* and that significant information would be 
necessary to justify altering their legislation to such a low 
concentration.  Technically speaking, Japan noted that a .1 
percent concentration for PFIB is impractical, given that any 
plant engaged in the pyrolysis of fluoropolymers is producing 
PFIB as a by-product, which would be extremely difficult to 
regulate or identify.  Japan also noted that the difference 
between Schedule 2 chemicals and Schedule 3 is industrial 
use, not the manufacturing process (note:  this argument 
appears to be intended to counter the UK assertion that 
adopting the same concentration for Schedule 2 and 3 
eliminates the intent of the Schedules to assign hierarchy of 
risk, based on the chemicals). 
 
7.  (U) In response to the UK paper distributed during the 
meeting on proliferation risk, the Japanese suggested the 
proliferation risk by theft of PFIB is minimal, given that 
PFIB is gaseous at room temperature, making any theft 
difficult due to the need for proliferators to have both 
direct access to in-process infrastructure and gas cylinders. 
 Japan noted further that PFIB and phosgene are both choking 
agents, and that phosgene is more readily available in 
industry.  Therefore, Japan argued, phosgene would be a 
preferred alternative to PFIB for would-be proliferators. 
 
8.  (U) Germany seconded the Japanese intervention, noting 
their legislation is also set at 30 percent, and called for 
States Parties gathered to identify their applied thresholds 
to get a clear picture of the situation.  (Note:  The table 
was unable to complete its circle of identifying current 
thresholds because delegates in attendance either did not 
know or "did not have guidance" to address what thresholds 
they currently apply in their implementation measures). 
Germany followed that the UK presentation lacks justification 
sufficient to make such a dramatic change from 30 percent to 
below 1 percent.  India agreed, adding that .1 percent or .5 
percent for PFIB is not acceptable and indicated it also has 
reservations about the ability to measure or calculate low 
concentrations.  France, too, indicated it is concerned about 
the amount of information available to justify changing their 
concentrations from 30 percent to such a low concentration 
and supported Indian concern regarding the ability to measure 
and verify such low concentrations. 
 
9.  (U) During discussions, Del advised States Parties that 
the issue remains under consideration as to what the U.S. 
believes is the appropriate concentration threshold for 
2A/2A* chemicals.  Del noted that the U.S. Implementation Act 
currently sets the concentration threshold for such chemicals 
at 30 percent and indicated that, for obvious reasons, 
information regarding proliferation risk is essential for 
evaluation and, should it become necessary, to persuade 
legislators to reduce the current 30 percent to a 
significantly lower concentration.  The work of the UK 
facilitator and experts would assist in our deliberations and 
Del expressed appreciation for their efforts.  Del also 
added, in response to the Indian and French concerns on 
calculations as the basis for declarations, that paragraph 4 
of the "Boundaries of Production" decision text already 
indicates that "indirect measurements" derived from "chemical 
process, a material balance, or other available plant data" 
clearly include calculations as a sufficient basis for 
declarations and the issue would not need to be addressed in 
any draft decision text. 
 
10.  (U) Italy and Switzerland were the only delegations to 
indicate their concentration levels were currently below 30 
percent.  Italy's threshold is .5 percent and Switzerland's 
is 1 percent. 
 
11.  (U) COMMENT:  The UK was caught off-guard by the 
indications that the information presented appeared, to some 
States Parties, insufficient to justify moving off 30 percent 
to such low concentrations.  It was clear from the 
discussions that many States Parties (namely, Germany, Japan, 
France, India) are yet, not persuaded.  The UK called Del 
shortly after consultations, indicating that the UK paper on 
proliferation risk was generated in anticipation of U.S. 
internal deliberations and that he hoped we would find it 
useful. 
 
------------------- 
Facility Agreements 
------------------- 
 
12.  (U) Discussions regarding facility agreements proceeded 
quite well.  Essentially, the discussion was a table vote in 
support of the Facilitators' (Abe, Japan and Heizner, 
Switzerland) proposed way forward to provide EC report 
language encouraging the TS to assume more flexibility in 
deciding whether to negotiate facility agreements for 
Schedule 2 facilities.  The TS indicated their guidelines 
would take into consideration the complexity of the plant 
(e.g., consumption and processing versus production), level 
of production, frequency of inspection, likelihood of plant 
alterations, interests of States Parties and any additional 
health and safety or plant site-specific issues.  In support 
of the facilitators way forward were:  Denmark, Italy, China, 
U.S., U.K., Netherlands, Germany, France, Canada, Korea, 
Switzerland, and the Czech Republic. 
 
13.  (U) India voiced hesitation in that "flexibility" 
remained undefined and questioned the 'next steps' of the 
facilitators.  In response, the facilitators indicated an 
intent to continue discussions to streamline the facility 
agreements and seek efficiencies in the process, but that as 
an initial step in reducing the number of facility 
agreements, they would like to recommend to the EC that 
States Parties support the TS implementation of guidelines 
that would expand the criteria currently used (which is 
limited to: does the site exceed thresholds and is the site 
expected to remain declarable) to include elements of 
frequency of inspection, plant site complexity and 
characteristics. 
 
14.  (U) Iran remained the only delegation not to voice 
support for the proposed effort, citing that it was unlikely 
to have a position on the facilitator's proposal due to 
holidays leading up to and during the March EC Session. 
Substantively, the Iranians noted that they continue to 
disagree that there is 'flexibility' in the treaty not to 
negotiate facility agreements, noting that for Schedule 3 
agreements there exists an option not to conclude but that 
the default position for Schedule 2 facilities appears to be 
to conclude an agreement unless there is evidence to suggest 
one is not necessary.  (NOTE:  Del understands Iran does not 
have any schedule 2 facilities so their 'purist' stance on 
this issue is unclear.) 
 
---------------------- 
Clarification Requests 
---------------------- 
 
15.  (U) Apart from some minor edits to the proposed decision 
text distributed to States Parties in January, the discussion 
on Clarification Requests achieved 'ad ref' consensus for 
consideration of the document at the 36th EC.  The only 
significant addition to the text was proposed by the Cubans, 
who suggested that in order to facilitate responses to plant 
site inspectability clarification requests, the TS could 
issue a reminder, 60 days after the issuance of the 
clarification request, of the need to respond to the request. 
 The facilitator (Williams, U.S.) also distributed draft EC 
report language for State Party consideration that attempts 
to capture the instructions of States Parties to the 
Technical Secretariat regarding reconciliation of transfer 
discrepancies. 
 
16.  (U) During preparatory discussions on addressing the 
issue of plant site inspectability, discussions with the TS 
indicated some interesting facts.  Out of the 82 
clarification requests issued that the TS considered 
associated with plant site inspectability, 216 plant sites 
were affected.  The reason this number is not 82 is that the 
TS only reports clarification requests, of any sort, by 
 
SIPDIS 
individual letter to a State Party - not by individual 
question or line item.  For example, a clarification request 
to a State Party regarding 150 transfer discrepancies or 9 
plant sites for which the TS cannot determine the 
inspectability will only be reported to the EC as a single 
clarification request. 
 
17.  (U) Of the 216 plant sites involved, 128 were Schedule 
2, 69 were Schedule 3 and 19 were OCPFs.  For Schedule 2 
facilities, 119 sites can be attributed to missing 
submissions (e.g., incomplete declarations for 3 previous 
calendar years) or no declaration or nil declaration 
submitted, 2 sites can be attributed to missing forms 2.3 
(e.g., declared as plant sites, but no plant declaration), 1 
site failed to declare a quantity threshold and 6 other sites 
were missing "other" information (e.g., address, unscheduled 
chemicals, incorrect CAS numbers or chemical name).  For 
Schedule 3 facilities, 59 sites can be attributed to missing 
submissions or no declaration or nil declaration submitted, 6 
sites can be attributed to missing forms 3.2 and/or 3.3 
and/or 3.4 (e.g., declared as plant sites, but no plant 
declaration), and 4 sites failed to declare a range code. 
For OCPF facilities, 1 site can be attributed to missing 
submissions or no declaration or nil declaration submitted, 
11 sites failed to declare a PSF pl 
ant number or an aggregate quantity for production, and 7 
other sites were missing "other" information (e.g., address, 
range codes, etc.). 
 
18.  (U) Based on the information above, at least 37 (less 
the missing submissions) declared plant sites avoided 
inspection in 2003 due to the TS clarification request 
process of withholding inspections pending a response when 
plant site inspectability is in question.  (NOTE:  'Missing 
submissions' are left out of this total because, although 
extremely disconcerting, they are not necessarily germane to 
the clarification requests and inspectability of plant sites, 
which are triggered by a declaration submission.  Rather, 
'missing submissions' are consequence of non-submission by a 
State Party.) 
 
--------------------- 
Handbook on Chemicals 
--------------------- 
 
19.  (U) The facilitator (Ruck, Germany) invited Greg Linden, 
Chief of the TS/Information Services Branch, to brief 
participants on the status of activities regarding electronic 
submission, manipulation, and retrieval of data.  During his 
briefing, Linden reviewed the TS desire to facilitate 
electronic submissions by SPs, the benefits electronic 
submissions will have on its ability to implement, monitor, 
and report to SPs on verification activities, and the 
timetable in which the TS hopes to accomplish this task. 
 
20.  (U) Specifically, Linden reported that the full 
Verification Information System (VIS) is expected to come 
on-line in March 2005, the TS has completed the initial phase 
(delineation of system and security requirements and 
determination of TS end-user requirements), and is in the 
second phase (documenting system modules and verification of 
system design and implementation).  Linden emphasized that 
the TS system is intended to be compatible with electronic 
data formats used by State Parties electronic industry 
declarations, but the TS system is not being designed as an 
end-user tool for States Parties.  The TS system that bases 
its read/write capability on the common transmission file 
structure (CTFS) is intended to be flexible enough to handle 
files generated by multiple systems. 
 
21.  (U) Delegations welcomed the briefing, although most did 
not bring technical experts.  The majority of the questions 
were oriented towards State Party data submissions and 
compatibility between the TS and SPs' industry databases. 
Italy, Slovak Republic, and India each emphasized that a 
'tool' should be provided by the TS to enable States Parties 
to submit data electronically.  Switzerland briefly reviewed 
its software 'tool' for distribution to States Parties which 
uses the CTFS structure and is based on Microsoft Access, 
which it hopes will facilitate States Parties' ability to 
submit and archive data electronically.  Japan and Germany 
indicated they generally support the move to electronic data 
declarations but noted reservations regarding the security of 
such a system.  Linden acknowledged that the security 
concerns are paramount in the development of the VIS and he 
reviewed the role played by the Security Audit Team (SAT) to 
assure SPs that the VIS will protect confidential data.  Both 
the Del and the UK voiced support for the move to an 
electronic database system and reviewed their own efforts to 
develop domestic electronic submission and archival systems. 
Both reported their decision to move towards web-enabled 
systems to minimize the burden of semi-annual data 
declarations on industry. 
 
------------------------------- 
Transfers to Non-States Parties 
------------------------------- 
 
22.  (U) Discussion on transfers of Schedule 3 chemicals to 
non-States Parties went nowhere.  States Parties continue to 
hesitate on discussing end-use certificates, current transfer 
control procedures or specific, "minimum standards" or "best 
practices" which could be approved.  Only the U.K., 
Australia, and the United States ventured out to provide a 
brief overview of current practice under end-user 
certificates.  Following the consultations, the facilitator 
(Rae, NZ) asked the new Vice-Chair of the Industry Cluster 
(Amb. Vogelaar, Neth), UK and US representatives to discuss 
how to move forward on this issue.  The facilitator is 
leaving summer 2004 and does not sense a commitment by States 
Parties to justify seeking a replacement to continue 
discussions. 
 
23.  (U) After discussing various options, it was suggested 
that the issue may be best left to the work on implementation 
of Art. VII, due to the fact that certain countries are not 
meeting their obligations and that discussing other measures 
in the absence of basic compliance is preliminary, at best. 
Therefore, Art. VII work on implementation, which includes 
transfer-related issues, may be the most appropriate forum on 
which to focus on implementation first and then consider 
"other measures" as necessary down the road.  Vogelaar 
indicated this option may be the most efficient and expedient 
manner in which to "euthanize" the issue.  Del anticipates 
that the facilitator's report to the March EC will simply 
note that the issue will continue to be discussed within the 
ongoing implementation activities under Article VII.  In 
follow-up conversations with the facilitator, it appears that 
he wants to give one more shot at finding a replacement 
facilitator, as opposed to simply shifting the issue to 
another facilitation. 
 
------------------- 
OCPF Site Selection 
------------------- 
 
24.  (U) Theo Juurlink/TS presented an overview of the 
current TS selection methodology (the "A14") and provided an 
initial assessment of the impact of a change to the proposed 
Swiss-U.S. methodology during the March consultations.  The 
U.S.-Swiss paper was provided to States Parties to facilitate 
their understanding of the concepts of the proposed selection 
mechanism.  Both were well-received by States Parties with 
ensuing discussion focused on how to implement the system, 
with many delegations expressing concern that TS' and SPs' 
allocation of points might politicize the OCPF inspection 
regime. 
 
25.  (U) States Parties considered whether the TS might 
retain the A14 method to distribute its points, whether TS 
points should be on an equal footing with those submitted by 
SPs, and if TS estimates of the additional administrative 
burden required to receive, analyze and publish lists of 
inspectable sites for SP consideration were realistic.  The 
TS, Del and Swiss representatives fielded these questions, 
 
SIPDIS 
and in the end, States Parties appeared to focus on how best 
to balance the provisions of the Convention for accommodating 
SP nominations in a manner that does not rely upon States 
Parties to 'politically' identify specific SPs.  States 
Parties considered how to make their nominations by choosing 
sites or activities of concern rather than nominating 
regional groups or specific countries.  SPs seemed to think 
that further examination of the allocation nomination points 
via 'rule(s)' could prevent overt politicization. 
 
26.  (U)  Javits sends. 
SOBEL