[Federal Register: April 26, 2004 (Volume 69, Number 80)]
[Notices]
[Page 22561-22562]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr26ap04-107]
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DEPARTMENT OF JUSTICE
Drug Enforcement Administration
Gazaly Trading; Denial of Application
On March 14, 2003, the Deputy Assistant Administrator, Office of
Diversion Control, Drug Enforcement Administration (DEA), issued an
Order to Show Cause to Gazaly Trading (Gazaly) proposing to deny its
application executed on November 9, 2000, for DEA Certificate of
Registration as a distributor of list I chemicals. The Order to Show
Cause alleged that granting the application of Gazaly would be
inconsistent with the public interest as that term is used in 21 U.S.C.
823(h) and 824(a). The Order to Show Cause also notified Gazaly that
should no request for a hearing be filed within 30 days, its hearing
right would be deemed waived.
According to the DEA investigative file, the Order to Show Cause
was sent by certified mail to Gazaly at its proposed registered
location and was received on March 24, 2003. DEA has not received a
request for hearing or any other reply from Gazaly or anyone purporting
to represent the company in this matter.
Therefore, the Acting Deputy Administrator of DEA, finding that (1)
thirty days having passed since the delivery of the Order to Show Cause
to the applicant's last known address, and (2) no request for hearing
having been received, concludes that Gazaly has waived its hearing
right. See Aqui Enterprises, 67 FR 12576 (2002). After considering
relevant material from the investigative file in this matter, the
Acting Deputy Administrator now enters her final order without a
hearing pursuant to 21 CFR 1309.53 (c) and (d) and 1316.67 (2003). The
Acting Deputy Administrator finds as follows:
List I chemicals are those that may be used in the manufacture of a
controlled substance in violation of the Controlled Substances Act. 21
U.S.C. 802(34); 21 CFR 1310.02(a). Pseudoephedrine and ephedrine are
list I chemicals commonly used to illegally manufacture
methamphetamine, a Schedule II controlled substance.
Phenylpropanolamine, also a list I chemical, is presently a
legitimately manufactured and distributed product used to provide
relief of the symptoms resulting from irritation of the sinus, nasal
and upper respiratory tract tissues, and is also used for weight
control. Phenylpropanolamine is also a precursor chemical used in the
illicit manufacture of methamphetamine and amphetamine. Methamphetamine
is an extremely potent central nervous system stimulant, and its abuse
is an ongoing public health concern in the United States.
The Acting Deputy Administrator's review of the investigative file
reveals that DEA received an application dated November 9, 2000, from
Gazaly Trading located in Orlando, Florida. The application was
submitted on behalf of Gazaly by its owner, Redwan Gazaly (Mr. Gazaly).
Gazaly seeks DEA registration as a distributor of the list I chemicals
ephedrine, pseudoephedrine, and phenylpropanolamine. There is no
evidence in the investigative file that Gazaly has sought to modify its
pending registration application in any respect.
Following receipt of the above application, on December 28, 2000,
DEA Diversion Investigators conducted an on-site pre-registration
inspection at Gazaly's proposed registered location. During the
inspection, Diversion Investigators advised Mr. Gazaly of regulatory
requirements and problems surrounding the diversion of list I
chemicals. The Diversion Investigators also reviewed security,
recordkeeping and distribution procedures with Mr. Gazaly and provided
him with appropriate materials regarding DEA requirements for handlers
of listed chemicals.
During the pre-registration investigation, Mr. Gazaly informed DEA
Diversion Investigators that he had no previous experience handling
list I chemical products. Nevertheless, he anticipated that Gazaly's
sale of those products would constitute approximately 10% of his
business activity. Mr. Gazaly also further disclosed that his customers
are convenience stores, gas stations, and general stores, and the
purpose of obtaining a registration to distribute list I chemical was
to ensure distribution of other products to his customers.
Mr. Gazaly also provided DEA a list of customers to whom listed
chemical products would be sold. Upon review of the list it was learned
that approximately fifteen potential customers of Gazaly were
associated with criminal targets in previous DEA investigations.
Several of Gazaly's potential customers were also targets of ongoing
criminal cases, apparently related to unlawful handling of listed
chemical products. In addition, Mr. Gazaly advised DEA Diversion
Investigators that he would only distribute list I chemicals to
customers located in the State of Florida; however, further review of
the customer list revealed a business establishment located outside of
Florida that was also the target of a DEA criminal investigation.
Pursuant to 21 U.S.C. 823(h), the Acting Deputy Administrator may
deny an application for Certificate of Registration if she determines
that granting the registration would be inconsistent with the public
interest as determined under that section. Section 823(h) requires the
following factors be considered in determining the public interest:
(1) Maintenance of effective controls against diversion of listed
chemicals into other than legitimate channels;
(2) Compliance with applicable Federal, State, and local law;
(3) Any prior conviction record under Federal or State laws
relating to controlled substances or to chemicals controlled under
Federal or State law;
(4) Any past experience in the manufacture and distribution of
chemicals; and
(5) Such other factors as are relevant to and consistent with the
public health and safety.
As with the public interest analysis for practitioners and
pharmacies pursuant to subsection (f) of section 823, these factors are
to be considered in the disjunctive; the Acting Deputy Administrator
may rely on any one or combination of factors, and may give each factor
the weight she deems appropriate in determining whether a registration
should be revoked or an application for registration denied. See, e.g.,
Energy Outlet, 64 FR 14269 (1999). See also Henry J. Schwartz, Jr.,
M.D., 54 FR 16422 (1989).
The Acting Deputy Administrator finds factors four and five
relevant to Gazaly's pending registration application.
With respect to factor four, the applicant's past experience in the
distribution of chemicals, the Acting Deputy Administrator finds this
factor relevant to Mr. Gazaly's lack of experience in the handling of
list I chemical products. In prior DEA decisions, the lack of
experience in the handling list I chemicals was a factor in a
determination to deny a pending application for DEA registration. See,
Matthew D. Graham, 67 FR 10229 (2002); Xtreme Enterprises, Inc., 67 FR
76195 (2002). Therefore, this factor similarly weighs against the
granting of Gazaly's pending application.
With respect to factor five, other factors relevant to and
consistent with
[[Page 22562]]
the public safety, the Acting Deputy Administrator finds this factor
relevant to Gazaly's proposal to distribute listed chemical products
primarily to convenience stores and gas stations. While there are no
specific prohibitions under the Controlled Substance Act regarding the
sale of listed chemical products to these entities, DEA has
nevertheless found that business establishments such as gas stations
and convenience stores constitute sources for the diversion of listed
chemical products. See, e.g., Sinbad Distributing, 67 FR 10232, 10233
(2002); K.V.M. Enterprises, 67 FR 70968 (2002) (denial of application
based in part upon information developed by DEA that the applicant
proposed to sell listed chemicals to gas stations, and the fact that
these establishments in turn have sold listed chemical products to
individuals engaged in the illicit manufacture of methamphetamine);
Xtreme Enterprises, Inc., supra.
Factor five is also relevant to Gazaly's proposal to distribute to
potential customers under criminal investigation, or to customers
associated with firms that were the subject of criminal investigations.
The conduct of a potential customer has been deemed a relevant
consideration under factor five. Shani Distributors, 68 FR 62324, 62326
(2003).
As noted above, there is no evidence in the investigative file that
Gazaly ever sought to modify its pending application with regard to
listed chemical products its seeks to distribute. Among the listed
chemical products that the firm seeks to distribute is
phenylpropanolamine. In light of this development, the Acting Deputy
Administrator also finds factor five relevant to Gazaly's request to
distribute phenylpropanolamine, and the apparent lack of safety
associated with the use that product. DEA has previously determined
that an applicant's request to distribute phenylpropanolamine
constitutes a ground under factor five for denial of an application for
registration. Shani Distributors, supra. Based on the foregoing, the
Acting Deputy Administrator concludes that granting the pending
application of Gazaly would be inconsistent with the public interest.
Accordingly, the Acting Deputy Administrator of the Drug
Enforcement Administration, pursuant to the authority vested in her by
21 U.S.C. 823 and 28 CFR 0.100(b) and 0.104, hereby orders that the
pending application for DEA Certificate of Registration, previously
submitted by Gazaly Trading be, and it hereby is, denied. This order is
effective May 26, 2004.
Dated: March 29, 2004.
Michele M. Leonhart,
Acting Deputy Administrator.
[FR Doc. 04-9334 Filed 4-23-04; 8:45 am]
BILLING CODE 4410-09-M