AMMONIUM NITRATE

Section 563 of the 2008 Consolidated Appropriations Act, Secure Handling of Ammonium Nitrate (Section 563) granted the Department of Homeland Security (DHS) the authority to regulate the sale and transfer of ammonium nitrate “to prevent the misappropriation or use of ammonium nitrate in an act of terrorism.”  In October 2008, DHS published an Advanced Notice of Proposed Rulemaking (ANPRM) detailing the activities expected to be covered under the ammonium nitrate regulations and seeking comment from interested parties. In August 2011, DHS published an ammonium nitrate Notice of Proposed Rulemaking (NPRM).

In addition to the authority granted under Section 563, DHS has authority to regulate facilities that possess certain hazardous chemicals, including ammonium nitrate, under an earlier statute, Section 550 of the Department of Homeland Security Appropriations Act of 2007.  Under that authority, DHS promulgated an interim final rule known as the Chemical Facility Anti-Terrorism Standards (CFATS).  While both Section 563 and CFATS aim to reduce terrorist risks associated with ammonium nitrate, the scope and methods of regulation under the two programs are expected to be very different.  CFATS addresses hundreds of chemicals, including ammonium nitrate, and is directed at the security of high-risk facilities.  However, CFATS does not impose any limitation on the sale or transfer of ammonium nitrate.  Section 563 on the other hand, does not address the physical security of ammonium nitrate facilities, but rather imposes certain conditions on sale or other transfers of ammonium nitrate—without regard for the quantities involved.  In developing the regulations required by Section 563, DHS intends to draw on information gained under the CFATS program about ammonium nitrate so that CFATS and the new program under Section 563 complement each other.

While ammonium nitrate exists in various forms and concentrations, DHS is primarily concerned with the chemical when used an explosive (e.g., in the mining industry) or when used as fertilizer mixed with fuel oil to create an explosive mixture known as Ammonium Nitrate/Fuel Oil (ANFO).  Given the availability of small-scale packaging (e.g., 50-pound bags) of ammonium nitrate fertilizer for use in agriculture-related operations, the chemical is highly susceptible to theft and misuse in making an improvised explosive device (IED).  In the hands of terrorists, both forms have the potential to be detonated and create significant adverse consequences.

Pursuant to Section 563, DHS expects to regulate the following categories of activities:

AMMONIUM NITRATE DEFINITION

For the purposes of the NPRM, DHS defines Ammonium Nitrate as:

  • Solid ammonium nitrate that is chiefly the ammonium salt of nitric acid, that contains not less than 33 percent nitrogen by weight; or
  • Any mixture containing 30 percent or more solid ammonium nitrate, by weight, that is chiefly the ammonium salt of nitric acid.  The solid ammonium nitrate in the mixture must contain not less than 33 percent nitrogen by weight.

Registration Activities

  • Registration Applications – DHS would require ammonium nitrate facilities and prospective ammonium nitrate purchasers to apply for registration numbers from DHS and provide specific identifying information in order to sell, transfer, and/or purchase ammonium nitrate.
  • Terrorist Screening Database (TSDB) – DHS would conduct checks of identifying information of all prospective registrants against the TSDB.
  • Registration Numbers – DHS would issue or deny registration numbers within 72 hours of receipt of an ammonium nitrate facility or ammonium nitrate purchaser’s complete registration application.

Point-of-Sale Activities

  • Seller Verification of Purchaser’s Registration and Identity – At points-of-sale, ammonium nitrate facilities would have to verify that potential ammonium nitrate purchasers are registered with DHS (including verifying each ammonium nitrate purchaser’s identity and registration number).
  • Recordkeeping – All ammonium nitrate facilities would be required to keep records of sales or transfers, including the name, address, phone number, ammonium nitrate purchaser’s registration number, date, and quantity of ammonium nitrate sold, for at least two (2) years after each transaction, with penalties for failing to maintain records appropriately.

Additional Regulatory Activities/Requirements

  • Reporting Theft or Loss of Ammonium Nitrate – Ammonium nitrate facilities and purchasers would be required to report the theft or loss of ammonium nitrate to federal law enforcement authorities within one (1) calendar day of discovery of the theft or loss.
  • Inspections and Audits – DHS would conduct or oversee regulatory compliance inspections and audits of ammonium nitrate records to ensure that regulated facilities are properly maintaining records and to monitor compliance with the requirements of Section 563.
  • Guidance Materials and Posters – DHS would develop guidance materials that (1) set forth procedures for appealing a denial of an application for a registration number; and (2) help ammonium nitrate facilities identify suspicious ammonium nitrate purchases, attempted purchases, and transfers and determine the appropriate course of action.  DHS would also develop posters providing information on sellers’ record-keeping requirements and penalties for violating those requirements.

Administrative Activities

  • Appeals – DHS would establish an expedited appeals process for applicants denied a registration number which would resolve such an appeal within 72 hours of receiving the denied individual’s request for appeal.
  • Penalties – DHS has the authority to assess civil penalties up to $50,000 per violation of the regulations and will establish a process for managing both the assessment and potential appeal of those penalties.