FSSC OPEN HOUSE

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RESTRICTED COMPONENTS REGULATIONS

• FSSC OPEN HOUSE
• April 22, 2008 Regina, Sask.

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RESTRICTED COMPONENTS REGULATIONS

• Background-Objective-Program-International
  controls
• Status
• Summary of Regulations
• Inspection Enforcement
• Implementation
• Final word
• Contact Info

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BACKGROUND

• The Explosives Regulatory Division (ERD) of the
  Department of Natural Resources administers the
  Explosives Act and Regulations in Canada
• The Act and Regulations control the importation,
  manufacture, storage and sale of commercial
  explosives, fireworks and other pyrotechnics.
• Principal activities include
• - Authorization and classification of explosives
• - Issuing licences for importation, manufacture,
  storage and sale of explosives
• - Inspections of factories and magazines

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BACKGROUND (Contd)

• Before 11 September 2001 ERDs mandate was Safety
  and Security in the explosives field
• Terrorist attacks in the US led to a
  re-evaluation of explosives legislation and
  programs from a security viewpoint
• Several areas for improvement were identified,
  some requiring new legislation
• New legislative proposals are contained in the
  Public Safety Act which became law in May 2004

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NEW SECURITY PROPOSALS

• Six Main Areas
• Explosives Possession Permit
• Activities related to OAS Convention
• Transportation
• Storage
• Precursors (Restricted Components)
• New Penalties

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BACKGROUND (Contd)

• Canadian Regulation based on US study
• US National Research Council studied illegal
  explosives following Oklahoma City bombing
• Identified a long list of materials which could
  be used to manufacture bombs
• Developed a short list of likely precursors
  (Restricted Components)

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OBJECTIVE

• Precursors are materials used to produce
  explosives, but which are not themselves
  classified or regulated as explosives
• They are often used to manufacture home-made
  explosives for criminal or terrorist purposes
• The objective of this program is to regulate
  these materials
• to increase physical security
• to place controls on consumer sales
• with the aim of preventing criminal or terrorist
  acquisition, while not unnecessarily impeding
  bona fide sales

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PROGRAM

• Proposes controls on sales of common explosives
  precursors such as AN
• Follows guidelines proposed by US National
  Research Council study following Oklahoma City
  bombing
• The study identified many chemicals used to
  produce illegal explosives, and proposed a short
  list of key precursors for control

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PROGRAM (Contd)Short List Criteria

• The chemical should be an essential component in
  an explosive systemwith a potential for
  significant use as measured in deaths, injuries
  and property damage
• The chemical should be reasonably adaptable and
  availablefor making large bombs
• The chemical should be a critical precursor,
  i.e., one not easily replaced

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PROGRAM (Contd)The 9 Chemicals for control

• Explosive Chemicals
• Ammonium Nitrate (solid 28 nitrogen content,
  80 AN)
• Nitromethane
• Oxidizers
• Sodium nitrate
• Potassium nitrate
• Sodium chlorate
• Potassium chlorate
• Potassium perchlorate
• Reactant Chemicals
• Hydrogen peroxide (30) (Acetone)
• Nitric acid (68) (Urea)

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INTERNATIONAL CONTROLS

• AN is widely recognized as an important
  fertilizer, but also as a favourite material for
  bomb-making
• The IRA bombing campaign in the seventies, the
  Oklahoma City bombing and the Bali nightclub
  bombing all used AN/fuel mixtures
• All countries we have contacted already have
  controls on the sale of AN, or are contemplating
  introducing them
• Canadas proposed controls are among the less
  restrictive

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INTERNATIONAL COMPARISON

• Australia Material containing more than 45 AN
  is classed as Security Sensitive AN and
  requires a licence to purchase and possess
• USA Possession of material containing more than
  X AN will require registration and a background
  check
• China AN is only available for explosives
  manufacture
• EU Recommending improved regulation and control
  of transactions involving AN, fertilizer and
  technical
• Singapore Licence required to possess material
  containing more than 80 AN

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STATUS

• Public Safety Act received Royal Assent on 5 May
  2004
• Regulation making could then start
• Extensive consultations 2002 to present
• Industry, other government departments,
  Provinces, US and other stakeholders involved
• Good cooperation from all industry groups
  involved with precursor materials (e.g. Canadian
  Fertilizer Institute)
• Working with Industry in the preparing of these
  Regulations has been extremely useful
• Security Code of Practice CFI 2005-2006-2008

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STATUS (Contd)

• Proposed Restricted Components Regulations RIAS
  posted in Canada Gazette Part I August 12th,
  2006 for a 90 day comment period
• Comments have been analyzed

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STATUS (Contd)

• Redrafting addressed appropriate
  comments/concerns such as
• Eliminated duplication with other regulations
• Added some exemptions/thresholds
• Added export feasibility
• Added more ID verification options
• Added UN numbers
• Reduced retention time for documents, etc
• Restricted Components Regulations RIAS posted
  in CGII on March 19, 2008.

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SUMMARY OF REGULATIONS

• Performance-based written
• All sellers need to enroll with ERD
• Valid for 5 years
• Amend for changes
• All sellers need to abide with the five criteria
  for control
• Secure chemical Investigate/Report tampering
  theft
• Control access to Chemical Records
• Track inventory Investigate/Report tampering
  theft
• Know your customer
• Keep records of sale

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SUMMARY (Contd)

• Provisions of secure storage
• Maintenance of a list of employees who have
  access to Restricted Components
• Reconciliation of incoming and outgoing
  quantities
• Weekly inspection of stock for theft
• Examination of purchaser identification prior to
  sale
• Denial of sale for suspicious purposes
• Maintenance securing of detailed sales records
• Maintenance of all records-documents for min 2
  years
• Reporting of suspicious activities theft,
  tampering or from sales.

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SUMMARY (Contd)

• Extra control for Ammonium Nitrate
• Further provisions of secure storage
• Informing local police on locations
• Informing transporters purchasers of security
  and reporting requirements
• Inspection of shipments for tampering or loss
• Tracking arrival of shipments
• Performing annual inventory audits
• Providing annually inventory reports
• Further provision for order verification

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ENROLMENT

• Enrolment Application Form
• Annual Report Form (for AN only)
• Note The application-submission forms are
  available electronically

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INSPECTION INFORCEMENT

• Inspections
• By CFIA Inspectors at AN blending facilities
• By ERD Inspectors at ports explosive licensed
  facilities
• Enforcement
• By ERD
• as follow-up on CFIA inspections
• as follow-up through whistle-blowers
• as required

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IMPLEMENTATION

• March 19, 2008 Publication of the Restricted
  Components Regulations in Canada Gazette 2
• Industry have been allowed a grace period for
  compliance
• June 1, 2008 Full compliance of all sellers of
  AN
• March 1, 2009 Full compliance of all sellers of
  the other 8 chemicals
• Workshops and outreach products can be set up and
  prepared jointly with CFI and ERD Please come
  forward with your inquiries

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FINAL WORD

• Sales of precursors must be controlled, as
  terrorists have acquired bomb-making materials by
  this route
• The control measures are the minimum required to
  achieve an adequate increase in security
• Security measures can be increased in the future
  if the situation requires it, and products can be
  added to or removed from the list as needed

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• QUESTIONS?

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CONTACT INFORMATION

• EXPLOSIVES REGULATORY DIVISION
• Tel [phone]
• Fax [phone]
• Email vdewyse_at_nrcan.gc.ca
• Website www.nrcan.gc.ca/mms/explosif/