Sunday, August 7, 2011

ANSP Commentary – Importation Not Covered

On August 3rd DHS published their Ammonium Nitrate Security Program (ANSP) notice of proposed rulemaking (NPRM). This blog post is part of a continuing series that looks at provisions of that NPRM. This post is more commentary that explicative in nature. Previous posts in this series included:

In the previous post I discussed the various transfers that would be covered under the proposed rule. In passing I noted two holes in the regulatory scheme; the lack of controls on exports and imports. The first is of little concern as far as domestic terrorism attacks are concerned. The second is the same type loophole that allowed the importation of the materials used to make the recent VBID that was used in Norway.

Import/Export Loophole

The NPRM preamble specifically addresses this issue. It states (76 FR 46926):

“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.”

While it would be easy to blame this shortcoming on the regulation drafters at DHS, it is more properly traced back to the Congressional drafters of the underlying law. That law defines two important terms; ‘ammonium nitrate facility’ and ‘ammonium nitrate purchaser’; in 6 USC §488.

“The term ``ammonium nitrate facility'' means any entity that produces, sells or otherwise transfers ownership of, or provides application services for ammonium nitrate.” {§488(2)}

“The term ``ammonium nitrate purchaser'' means any person who purchases ammonium nitrate from an ammonium nitrate facility.” {§488(3)}

The problem is that an importer will fall somewhere between the two definitions. An importer, particularly a farmer-importer would neither produce nor sell AN, and the definition of ‘provides applications services’ specifically excludes the owner of the property upon which the AN is applied. Since the foreign supplier is not an ‘ammonium nitrate facility’ under the regulation the importing farmer would not be a covered purchaser.

What the Hole Means

One would like to think that the normal import rules would allow the identification of potential terrorists that were importing explosive precursors like ammonium nitrate, but there is no specific legal authorization for registration of ammonium nitrate importers as envisioned in this regulation. Thus an importer would also be exempt from any of the record keeping requirements or the Seller, Representative or POC registration requirements.

One would think that the normal importer that does not fall under one of the other categories of ‘Ammonium Nitrate Facility’ (‘sells’ or ‘provides application services’) would be a farmer that imports material from a cross borders supplier, particularly near the Canadian or Mexican borders. Of course the Norwegian bomber was a registered (if not actual) farmer so he avoided additional scrutiny by Norwegian authorities.

Even if the American farmer importing AN from a Canadian or Mexican supplier were not a terrorist, there are no provisions for ensuring that employees with control/access of that are not either terrorists or in the employ of someone willing to sell AN to terrorists.

Now, looking at those two possibilities in print, it does sound kind of far-fetched, doesn’t it? Or does it? No one questions the basic need for this regulation and possible farm diversion of AN is clearly one of the main avenues of concern addressed in this proposed rule. Why would diversion of imported AN be any less likely than domestically produced AN?

Filling the Hole

There are a couple of potential methods for Congress to correct the problem; both of which would require passing new legislation to amend Part J of the Homeland Security Act of 2002. The first method would be to revise the facility definition by adding the word ‘imports’ between ‘produces’ and ‘sells’ in 6 USC §488(2). This method would place the entire reporting and record keeping burden on the importing farmer. The second method would be to revise the definition of a purchaser by adding the word ‘imports’ after ‘any person who’ in §488(3). In this case the US Customs people would be given the regulatory burden of checking the registration and identity of the importer.

Either of these options could be accomplished by the introduction and passage of a new piece of legislation. An easier method would be add another of the infamous sections that get added on to the Homeland Security Appropriations bill, much like §563 add Part J in the first place. Either of these could (but won’t likely) be done by the time DHS closes out the comment period for this rule by December 1st.

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