US embassy cable - 04THEHAGUE1550

UNCLAS SECTION 01 OF 05 THE HAGUE 001550 
 
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 JOECK 
WINPAC FOR LIEPMAN 
 
E.O. 12958: N/A 
TAGS: PARM, PREL, EIND, CWC 
SUBJECT: CHEMICAL WEAPONS CONVENTION (CWC) - WRAP-UP FOR 
JUNE 14-18 INDUSTRY CONSULTATIONS 
 
------- 
SUMMARY 
------- 
 
1.  (U)  The following are the results of the June 14-17 
facilitations on industry issues.  Schedule 1 captive use 
remains under consideration due to differences in opinion 
over whether or not a decision clarifying the declarability 
of Schedule 1 'captive use' production is necessary.  On one 
hand, since there is no evidence that such production exists, 
a decision seems ceremonial.  On the other hand, even if 
there exists no such production, the knowledge and technology 
to produce such chemicals in captive use situations is widely 
available, particularly in the case of pharmaceutical 
manufacturing (e.g., pethidine).  Discussions on low 
concentrations for Amiton, PFIB and BZ whittled down the 
proposed decision text to two open items:  specific 
concentration percentages and whether States Parties should 
apply one percentage to all three chemicals or disparate 
percentages for each. 
 
2.  (U)  With regard to Schedule 2 Facility Agreements, 
proposed EC-37 report language encouraging the Technical 
Secretariat to adopt more flexible criteria in determining 
 
SIPDIS 
not to conclude such agreements appears to have consensus. 
The discussions also produced agreed EC-37 report language 
for marking of Schedule 1 chemicals in the Handbook on 
Chemicals to indicate chemicals which have been declared in 
amounts greater than 100 grams by States Parties to the TS 
since entry into force.  Discussions on other chemical 
production facilities (OCPF) site selection made progress in 
terms of a path forward for discussions, but made little 
progress on minimizing substantive differences regarding 
accommodation of State Parties' proposals or enhance 
transparency and/or accountability in the allocation of TS 
nomination points.  End Summary. 
 
----------- 
Captive Use 
----------- 
 
3.  (U)  The facilitator (Rudduck, UK) held Schedule 1 
Captive Use consultations on June 15.  The discussions remain 
deadlocked between two schools of thought on the need for a 
clarification of Schedule 1 captive use.  One school holds 
that Art. II definitions must remain consistent and that 
clarifying 'captive use' as declarable for Schedule 1 makes 
legal/common sense, given the availability of knowledge and 
technology regarding past captive use Schedule 1 production. 
Germany is a staunch advocate of this position and the UK, 
France and U.S. also tend to fall into this category.  The 
second school says that since there is no known production, 
despite the fact that several old patents exist, there is no 
reason to 'regulate for the sake of regulation.'  Canada, 
Russian Federation, India, and China fall into this category. 
 
 
4.  (U)  During discussions, the facilitator reviewed the 
fact that there is evidence 'pethidine' is being produced 
(comes from the licensing activity required under the "1961 
Single Convention on Narcotic Drugs and the 1972 Additional 
Protocol to that Convention").  Pethidine is one of the 
examples offered by Germany as having a historical process, 
publicly available via several EU and U.S. patents, that uses 
nitrogen mustard as an intermediate in a captive use 
situation.  Specifically, the facilitator indicated that as 
of 2000, Brazil, Germany, India, Japan, Netherlands, Spain, 
UK, U.S. and Australia all license and produce pethidine, as 
reported to the UN, although UK experts admit that it is not 
known which process is used in each country (whether the 
conversion is made straight from the nitrogen mustard (NM) 
salt or by 'captively producing' the NM base). 
 
5.  (U)  UK experts informed Del that their companies do not 
use the NM route, and suspected the U.S. producers use the 
same process.  Del understands that pre-1995, many western 
companies, including U.S. producers, changed pathways to 
manufacture such pharmaceuticals to avoid being captured by 
the Schedule 1 obligations surfacing in the CW Convention 
Preparatory Commission.  On the technical side, Germany 
indicated the only difference between the two routes is the 
ph levels in the process.  UK experts provided the following 
info to Del regarding US licensed and declared producers of 
pethidine: 
Johnson Matthey, Inc., West Deptford, NJ 
Mallinckrodt Chemical, St. Louis, MO 
Organichem Corp, Rensselaer, NY 
 
6.  (U)  ACTION REQUEST:  Del requests any available 
information on the processes used and concerns with 
production of Schedule 1 chemicals, particularly if this 
information runs counter to what Del understands to be the 
case that no Schedule 1 production is ongoing in the U.S. as 
described above and that any company that did produce using 
previous pathways subsequently changed those routes in 
anticipation of CWC implementation.  The concern is that 
clarifying that 'captive' production of Schedule 1 chemicals 
in this manner may push SP (if they have not considered S1 
captive use to be declared) over the aggregate one tonne 
limit in these instances. 
 
------------------------------------ 
Schedule 2A/2A* - Low Concentrations 
------------------------------------ 
 
7.  (U)  For discussions on June 15, the facilitator 
requested the discussions be approached as a dual-track 
exercise.  Given that significant disagreement remains over 
the exact percentages to be applied to the three chemicals 
(Amiton, PFIB and BZ), the facilitator requested delegates to 
focus on editing changes to the provided draft decision text. 
 Working from the text distributed in May 2004, the 
facilitator hoped this would help eliminate the underbrush of 
the discussions, leaving the only issue the precise 
concentration limits to be applied. 
 
8.  (U)  Regarding preambular text changes, the facilitator 
agreed to eliminate paragraph 3 due to redundancy with 
paragraph 5, in accordance with requests from both the 
Russian and UK delegations.  Del requested inserting a 
preambular paragraph referencing C-7/Dec. 8 in exchange for 
eliminating redundancy in operative paragraphs 14 and 18. 
Specifically, paragraph 4 of C-7/Dec.8 already codifies that 
indirect measurements or calculations are acceptable basis 
for declaration.  The facilitator agreed to make this change. 
 Of note, this reference also clarifies the applicability of 
the boundaries of production text in that both quantity and 
concentrations must be exceeded, simultaneously, during 
production.  The language in paragraphs 13 and 17 are 
therefore, also clarified by the preambular reference to 
C-7/Dec.8 in that the proposed decision text could be read to 
suggest that quantities and concentrations could considered 
independent for purposes of declaration.  Preambular 
paragraphs 7 and 8 were also merged, at the request of the UK. 
 
9.  (U)  Apart from eliminating paragraphs 14 and 18, few 
changes were made to the operative paragraphs.  The Italian 
delegation requested that a note be included in the document 
citing that no agreement has yet been reached on the usage of 
one percentage for all three chemicals or whether there would 
be disparate percentages applied.  The Italians favor a 
single percentage approach and are concerned the structure of 
the document pre-judges that disparate percentages are 
appropriate.  While no delegation agreed this issue has been 
resolved, this debate spilled into a general debate on 
recommended percentages, despite the facilitator's best 
efforts to maintain focus on editing changes only. 
 
10.  (U)  Regarding specific positions on concentrations, the 
Italians favor a .5% concentration for all three chemicals. 
Norway indicated they could support a concentration as low as 
.5%.  The UK indicated they could go as low as .5% and is 
willing to change their regulations accordingly.  Germany 
indicated that they have not been provided with sufficient 
information in terms of proliferation risk to justify 
changing their regulations below 30%.  The Germans also 
offered that, following demonstration of any applicable 
proliferation risk, any consideration of low concentrations 
should be based on a decision of whom to capture in regards 
to the risk posed.  Specifically, as presented by the UK 
during the last round of consultations, the Germans noted 
that TFE has a production concentration of PFIB as roughly 
.01% and HFP has a production concentration of roughly 3-4%. 
 
11.  (U)  Germany argued that .01% is clearly not on the 
table for consideration because of the "extremely low 
concentration" and that .5% appears overkill to capture HFP 
PFIB production, where production occurs at a higher 
concentration.  Germany also noted that other process 
formulations for TFE and HFP production yield significantly 
higher concentrations of PFIB during normal operations.  For 
these reasons, Germany argues that the discussion should be 
what percentage, if a proliferation risk for PFIB is 
identified, should be set which is well above the .5% level 
currently being discussed. 
 
12.  (U)  On the subject of concentrations, Del reiterated 
the United States regulatory concentration level remains at 
30% and that we would need to see compelling arguments for 
the nonproliferation benefits of a threshold below that 
contained in U.S. regulations before agreeing to a lower 
mixture rule.  Del noted that, in this regard, the UK PFIB 
proliferation risk paper is still under consideration. 
 
13.  (U)  Closing the discussion on the paper, the UK 
facilitator agreed, upon request of the UK, Italy and India, 
to strike paragraph 20 from the proposed decision document. 
The facilitator indicated he intends to issue a revised text 
reflecting the editorial changes offered by SP, leaving only 
the issue of specific concentrations in brackets and leaving 
open the question of whether or not to have one percentage or 
separate percentages for the three chemicals. 
 
14.  (U)  As regards to the BZ questions contained in the 
guidance cable, Del delivered the questions to the Italian 
delegation.  The Italians indicated they would work on a 
response to the questions with the Italian experts who wrote 
the Italian BZ paper. 
 
------------------------------ 
Schedule 2 Facility Agreements 
------------------------------ 
 
15.  (U)  Discussions on June 16 centered upon the 
facilitators' (Heinzer, Switzerland and Abe, Japan) proposed 
EC-37 report language, circulated May 26, encouraging the TS 
to establish criteria to reduce the number of Schedule 2 
Facility Agreements.  The paper is broken out into three 
paragraphs, the first identifies the treaty origin of the 
facility agreement requirement from Verification Annex, Part 
VII, paragraphs 17 and 24, noting the common element between 
the two that facility agreements are to be concluded unless 
agreed between the inspected SP and the TS that one is not 
needed.  The second paragraph articulates the recommendation 
that the TS consider carefully the need for each Schedule 2 
facility agreement based on the information available through 
its verification activities (declaration and inspection) and 
also taking into account the opinion of the inspected SP 
involved.  The third paragraph notes the Council's 
recognition that enactment of such criteria by the TS may 
lead to a noticeable reduction in the number of facility 
agreements. 
 
16.  (U)  During the last EC, similar language posed by the 
facilitators failed to gain consensus due to two delegations: 
 Iran and India.  At the onset of these consultations, the 
Iranians, backed by India and Pakistan, indicated they could 
support the language as written, provided that the third 
paragraph was dropped.  As it posed no substantive 
requirements or instructions to the TS, States Parties, 
including Austria, UK, Switzerland, France, China, Russia, 
and Japan agreed to drop the third paragraph.  Del and 
Denmark both noted we could show flexibility on dropping the 
third paragraph, but noted that our flexibility was 
contingent upon acceptance of paragraphs 1 and 2 remaining 
intact.  This was agreed.  However, before the meeting could 
be closed, the Indian delegation - predictably - offered some 
"additional editorial" changes to paragraphs 1 and 2. 
 
17.  (U)  In the first paragraph, the Indian delegation 
requested that the references to "unless the inspected State 
Party and the Technical Secretariat agree it (facility 
agreement) is not needed" be struck from the document as they 
appear to be quoted only from paragraph 17 and do not include 
all elements of paragraph 24.  They suggested this introduced 
a hierarchy of paragraphs in the Convention.  Del noted that 
the language is the only common element appearing in both 
paragraphs, is not a direct quote and is germane to the issue 
being presented for adoption by the Council - namely how the 
TS develops criteria it will use to reach agreement that a 
 
SIPDIS 
facility agreement is unnecessary.  France echoed a similar 
concern with regards to the treaty reference and the 
facilitator offered to include language indicating that both 
paragraphs "include" the requirement that "unless the 
inspected. . ." This seemed acceptable to the delegations. 
 
18.  (U)  In regards to the second paragraph, the Indian 
delegation requested that the reference to the Review 
Conference document and optimization efforts be deleted and 
the remainder of the paragraph dealing with the operational 
recommendations be moved to follow the treaty citations 
contained in the first paragraph.  While delegations did not 
voice objections to the Indian proposal, consensus was not 
reached and the facilitators agreed to issue, by the end of 
the week, a revised text that indicated changes.  During 
follow-on discussions with the UK, Germany, France, Japan and 
Switzerland, it appeared that analysis of the proposal does 
not weaken the language and appears simply editorial in 
nature.  Del will forward text for consideration, but agrees 
that, although irritating, the change does not appear to 
damage the thrust of the report language, which is to provide 
cover to the TS to establish criteria to reduce the number of 
facility agreements.  Follow-on discussions with the TS 
(Runn) confirmed that the TS intends to proceed with the 
understanding as articulated during the discussions and in 
earlier TS papers, that criteria established will 
dramatically reduce the number of facility agreements pursued. 
 
------------------- 
OCPF Site Selection 
------------------- 
 
19.  (U)  OCPF Site Selection discussions began during the 
WEOG on June 16.  The U.S. inquired about WEOG's current 
stance towards the Swiss-U.S. proposal.  Only one delegation 
- Canada - voiced a strong preference for the proposal, in 
principle.  Two other delegations, Germany and the UK, 
indicated they still do not have final comments on the 
proposal, but indicated they continue to support discussions 
on the subject.  Other WEOG delegations did not take the 
floor.  After the meeting, New Zealand privately reported 
that Wellington supports the proposal, as written. 
 
20.  (U)  During the consultations, the facilitator (Wilke, 
Netherlands) indicated he would be stepping down as 
facilitator.  Del understands the Dutch are pressing for his 
replacement to be Johan Verboom of the Dutch delegation, 
which Del supports.  On substantive matters, very little 
progress was made.  Delegations remain cautious about 
proposals to incorporate SP allocations in the selection 
methodology, despite the treaty requirement, and also remain 
concerned about the manner of transparency and accountability 
in the allocation of TS points under the proposal.  However, 
China, Russia, India, South Africa, and Iran all indicated 
that the current methodology is not acceptable and expressed 
a desire to continue discussions on the proposed selection 
methodology.  India reiterated its detailed suggestions on 
their continued concerns with the text:  politicization of 
the process by incorporation of SP allocations, equitable 
geographic disposition and complexity of the proposal. 
 
21.  (U)  Del (Sanders) offered a path forward that appears 
well received.  The proposal is, essentially, to address each 
of the weighting factors individually, analyzing the pros and 
cons of various options presented thus far.  In this manner, 
States Parties can objectively evaluate the rationale of the 
Swiss-U.S. proposal.  Such an approach may facilitate leading 
SPs to the Swiss-U.S. methodology by analyzing "how we got 
here" rather than a "here's the math" approach.  Such 
transparency may eliminate some of the suspicions about the 
proposal likely at the root of SP hesitation to adopt the 
proposal - - that the Swiss and U.S. are acting as wolves in 
sheep's clothing to target the NAM.  One of the strengths of 
the proposal in alleviating this concern is the geographic 
disposition built on proportional number of plant sites 
within SPs and that the two countries presenting the 
methodology will, likely, see an increase in domestic 
inspections as a result of its adoption.  As foreseen in the 
Convention, the balance comes from both the allocation of TS 
and SP points in this regard. 
 
------------------------------------------ 
Declaration Handbook/Handbook on Chemicals 
------------------------------------------ 
 
22.  (U)  During this round of discussions on the Handbook on 
Chemicals, the facilitator (Ruck, Germany) focused on 
finalizing EC-37 proposed report language designating a 100 g 
threshold for "marking" Schedule 1 chemicals in the Handbook 
on Chemicals.  Having already reached consensus on marking 
Schedule 2 and 3 chemicals that have been declared to the TS 
by States Parties, the issue of Schedule 1 required further 
clarification.  Currently, in the Handbook on Chemicals, 
there are several hundred Schedule 1 chemicals listed.  The 
overwhelming majority of these chemicals have only been 
produced in laboratory settings for background data for the 
OPCW's analytical database.  As such, they are neither 
produced, not consumed other than their one-time creation for 
data generation. 
 
23.  (U)  To assist States Parties in sifting through the 
Handbook on Chemicals, it was agreed that "marking" those 
chemicals that have been declared, by States Parties, as 
having been produced, either as weapons or for non-prohibited 
purposes, would serve as a useful indicator to non-technical 
users of the Handbook.  The marking system would consist of 
an asterisk under a column heading which would read "Declared 
Production above 100g Since Entry-Into-Force (EIF)".  Del, 
UK, Japan, Russia, Switzerland all supported the 
facilitator's proposal and agreed that 100 g was the 
reasonable applicable quantity threshold, given the 
declaration triggers identified in paragraphs 11-12, Part VI 
of the Verification Annex. 
 
24.  (U)  Regarding updates to the draft Handbook currently 
under development, the facilitator indicated that the new 
version would include improvements in the electronic version 
and a searchable chemical database, which will include 
chemical structure-searching capabilities.  It was also 
decided that the Handbook is a TS document and does not 
require formal approval of the EC for distribution.  That 
said, it was agreed that any further improvements or 
discussions should continue in this forum, like the 
discussions on marking of chemicals, to ensure States Parties 
input is offered to the TS. 
 
25.  (U)  Javits sends. 
SOBEL