1. FSSC OPEN HOUSE April 22, 2008 – Regina, Sask. RESTRICTED COMPONENTS REGULATIONS

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

3. 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

4. BACKGROUND (Cont’d) Before 11 September 2001 ERD’s 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

5. NEW SECURITY PROPOSALS Six Main Areas: Explosives Possession Permit Activities related to OAS Convention Transportation Storage Precursors (Restricted Components) New Penalties

6. BACKGROUND (Cont’d) 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)

7. 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

8. 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

9. PROGRAM (Cont’d) Short List Criteria 1.The chemical should be an essential component in an explosive system…with a potential for significant use as measured in deaths, injuries and property damage 2.The chemical should be reasonably adaptable and available…for making large bombs 3.The chemical should be a critical precursor, i.e., one not easily replaced

10. PROGRAM (Cont’d) 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)

11. 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 Canada’s proposed controls are among the less restrictive

12. 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

13. 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

14. STATUS (Cont’d) Proposed Restricted Components Regulations & RIAS posted in Canada Gazette Part I: August 12 th, 2006 for a 90 day comment period Comments have been analyzed

15. STATUS (Cont’d) 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.

16. 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

17. SUMMARY (Cont’d) 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.

18. SUMMARY (Cont’d) 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

19. ENROLMENT Enrolment Application Form Annual Report Form (for AN only) Note: The application-submission forms are available electronically

20. 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

21. 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

22. 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

23. QUESTIONS?

24. CONTACT INFORMATION EXPLOSIVES REGULATORY DIVISION Tel: 613-948-5183 Fax: 613-948-5195 Email: vdewyse@nrcan.gc.ca Website: www.nrcan.gc.ca/mms/explosif/