[Federal Register: November 20, 2007 (Volume 72, Number 223)]
[Proposed Rules]
[Page 65248-65256]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr20no07-15]
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DEPARTMENT OF JUSTICE
Drug Enforcement Administration
21 CFR Part 1310
[Docket No. DEA-296P]
RIN 1117-AB10
Removal of Thresholds for the List I Chemicals Pseudoephedrine
and Phenylpropanolamine
AGENCY: Drug Enforcement Administration, Department of Justice.
ACTION: Notice of proposed rulemaking.
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SUMMARY: The Drug Enforcement Administration (DEA) is proposing to
remove the thresholds for importation, exportation, and domestic
distributions of the List I chemicals pseudoephedrine and
phenylpropanolamine. This rulemaking is being conducted as part of
[[Page 65249]]
DEA's implementation of the Combat Methamphetamine Epidemic Act of 2005
and is needed to implement the Act's requirements for import and
production quotas and to address the potential diversion of these
chemicals. DEA is also clarifying that all transactions of drug
products containing ephedrine, pseudoephedrine, and
phenylpropanolamine, except retail transactions, are considered to be
regulated transactions.
DATES: Written comments must be postmarked, and electronic comments
must be sent, on or before January 22, 2008.
ADDRESSES: To ensure proper handling of comments, please reference
``Docket No. DEA-296'' on all written and electronic correspondence.
Written comments being sent via regular mail should be sent to the
Deputy Assistant Administrator, Office of Diversion Control, Drug
Enforcement Administration, Washington, DC 20537, Attention: DEA
Federal Register Representative/ODL. Written comments sent via express
mail should be sent to DEA Headquarters, Attention: DEA Federal
Register Representative/ODL, 8701 Morrissette Drive, Springfield, VA
22152. Comments may be directly sent to DEA electronically by sending
an electronic message to dea.diversion.policy@usdoj.gov. Comments may
also be sent electronically through http://www.regulations.gov using
the electronic comment form provided on that site. An electronic copy
of this document is also available at the http://www.regulations.gov
web site. DEA will accept attachments to electronic comments in
Microsoft Word, WordPerfect, Adobe PDF, or Excel file formats only. DEA
will not accept any file formats other than those specifically listed
here.
Posting of Public Comments: Please note that all comments received
are considered part of the public record and made available for public
inspection online at http://www.regulations.gov and in the Drug
Enforcement Administration's public docket. Such information includes
personal identifying information (such as your name, address, etc.)
voluntarily submitted by the commenter.
If you want to submit personal identifying information (such as
your name, address, etc.) as part of your comment, but do not want it
to be posted online or made available in the public docket, you must
include the phrase ``PERSONAL IDENTIFYING INFORMATION'' in the first
paragraph of your comment. You must also place all the personal
identifying information you do not want posted online or made available
in the public docket in the first paragraph of your comment and
identify what information you want redacted.
If you want to submit confidential business information as part of
your comment but do not want it to be posted online or made available
in the public docket, you must include the phrase ``CONFIDENTIAL
BUSINESS INFORMATION'' in the first paragraph of your comment. You must
also prominently identify confidential business information to be
redacted within the comment. If a comment has so much confidential
business information that it cannot be effectively redacted, all or
part of that comment may not be posted online or made available in the
public docket.
Personal identifying information and confidential business
information identified and located as set forth above will be redacted
and the comment, in redacted form, will be posted online and placed in
the Drug Enforcement Administration's public docket file. If you wish
to inspect the agency's public docket file in person by appointment,
please see the For Further Information paragraph.
FOR FURTHER INFORMATION CONTACT: Mark W. Caverly, Chief, Liaison and
Policy Section, Office of Diversion Control, Drug Enforcement
Administration, Washington, DC 20537 at (202) 307-7297.
SUPPLEMENTARY INFORMATION:
DEA's Legal Authority
DEA implements the Comprehensive Drug Abuse Prevention and Control
Act of 1970, often referred to as the Controlled Substances Act (CSA)
and Controlled Substances Import and Export Act (21 U.S.C. 801-971), as
amended. DEA publishes the implementing regulations for these statutes
in Title 21 of the Code of Federal Regulations (CFR), parts 1300 to
1399. These regulations are designed to ensure that there is a
sufficient supply of controlled substances for legitimate medical,
scientific, research, and industrial purposes and deter the diversion
of controlled substances to illegal purposes. The CSA mandates that DEA
establish a closed system of control for manufacturing, distributing,
and dispensing controlled substances. Any person who manufactures,
distributes, dispenses, imports, exports, or conducts research or
chemical analysis with controlled substances must register with DEA
(unless exempt) and comply with the applicable requirements for the
activity. The CSA, as amended, also requires DEA to regulate the
manufacture, distribution, retail sale, import, and export of chemicals
that may be used to manufacture controlled substances illegally. Listed
chemicals that are classified as List I chemicals are important to the
manufacture of controlled substances. Those classified as List II
chemicals may be used to manufacture controlled substances.
On March 9, 2006, the President signed the Combat Methamphetamine
Epidemic Act of 2005 (CMEA), which is Title VII of the USA PATRIOT
Improvement and Reauthorization Act of 2005 (Pub. L. 109-177). Among
other actions, CMEA imposed new requirements regarding the retail sale
of scheduled listed chemical products (products containing ephedrine,
pseudoephedrine, or phenylpropanolamine, that may be marketed or
distributed lawfully in the United States under the Federal Food, Drug
and Cosmetic Act as nonprescription products) (21 U.S.C. 802(45)(A)).
In a separate rulemaking, ``Retail Sales of Scheduled Listed Chemical
Products; Self-Certification of Regulated Sellers of Scheduled Listed
Chemical Products'' [Docket No. DEA-291, RIN 1117-AB05] (71 FR 56008,
September 26, 2006; corrected at 71 FR 60609, October 13, 2006), DEA
promulgated regulations implementing these provisions. The CMEA also
subjects material containing ephedrine, pseudoephedrine, and
phenylpropanolamine to manufacturing and import restrictions.
Specifically, CMEA amended section 1002 of the Controlled Substances
Act (21 U.S.C. 952(a)(1)) by adding the List I chemicals ephedrine,
pseudoephedrine, and phenylpropanolamine to those narcotic raw
materials whose importation into the United States is prohibited except
for such amounts as the Attorney General finds to be necessary to
provide for medical, scientific, or other legitimate purposes. In a
separate rulemaking, ``Import and Production Quotas for Certain List I
Chemicals'' [Docket No. DEA-293, RIN 1117-AB08] (72 FR 37439, July 10,
2007), DEA promulgated regulations to implement these provisions.
Further, the CMEA requires that importers of all listed chemicals
provide DEA with information regarding the transferee, (i.e., the
downstream customer) of the chemical, as well as information regarding
the quantity of the chemical to be transferred. Importers are further
required to provide DEA with a return declaration regarding each import
after the transaction is completed (CMEA Sec. 716, 21 U.S.C. 971(d)
and (g), as
[[Page 65250]]
amended). In a separate rulemaking, ``Implementation of the Combat
Methamphetamine Epidemic Act of 2005; Notice of Transfers Following
Importation or Exportation'' [Docket No. DEA-292, RIN 1117-AB06] (72 FR
17401, April 9, 2007; Temporary Stay of Certain Provisions 72 FR 28601,
May 22, 2007), DEA promulgated regulations implementing these
provisions. Further, the CMEA requires that the notice of importation
(DEA Form 486) for ephedrine, pseudoephedrine, and phenylpropanolamine
``shall include all information known to the importer on the chain of
distribution of such chemical from the manufacturer to the importer.''
(CMEA Sec. 721, 21 U.S.C. 971(h) as amended). In a separate
rulemaking, ``Information of Foreign Chain of Distribution for Certain
List I Chemicals'' [Docket No. DEA-295, RIN 1117-AB07], DEA is
promulgating regulations to implement this provision.
Ephedrine, Pseudoephedrine, and Phenylpropanolamine
The List I chemicals ephedrine, pseudoephedrine, and
phenylpropanolamine all serve as precursor chemicals for the illicit
manufacture of controlled substances. Ephedrine and pseudoephedrine are
the primary precursors used in the synthesis of the controlled
substances methamphetamine, a schedule II controlled substance, and
methcathinone, a schedule I controlled substance. Phenylpropanolamine
is the primary precursor used in the illicit synthesis of amphetamine,
a schedule II controlled substance.
Licit Use
Ephedrine, pseudoephedrine, and phenylpropanolamine all have
therapeutic uses in both over-the-counter and prescription drug
products. Ephedrine is lawfully marketed under the Federal Food, Drug,
and Cosmetic Act as an ingredient in nonprescription (``over-the-
counter'' (OTC)) drugs as a bronchodilator for the treatment of asthma.
Ephedrine is also available OTC in combination with the active
ingredient guaifenesin.
As a prescription drug, ephedrine is used in parenteral
(injectable) form in hospitals as part of an anesthesiology kit.
Ephedrine has the beneficial effect of increasing blood pressure very
rapidly in the event of hypotensive crisis (i.e., sudden loss of blood
pressure sometimes experienced during surgery). Parenteral ephedrine is
also sometimes used to relieve acute bronchospasm. Oral dosage forms of
ephedrine are also available as prescription drugs for the treatment of
asthma. These prescription drug products primarily consist of ephedrine
in combination with other active ingredients such as potassium iodide
(an expectorant) and/or theophylline (a bronchospamolytic).
Pseudoephedrine is lawfully marketed under the Federal Food, Drug,
and Cosmetic Act provisions for OTC use as a decongestant.
Phenylpropanolamine has historically been marketed in the United States
for OTC use as a decongestant and diet aid and there have been many
legend (prescription) drug products that contain pseudoephedrine or
phenylpropanolamine. In the vast majority of these preparations,
pseudoephedrine or phenylpropanolamine were in combination with other
active ingredients, such as antihistamines, expectorants, and/or
antitussives.
In November 2000, the U.S. Food and Drug Administration (FDA)
issued a public health advisory concerning phenylpropanolamine and
requested that all drug companies discontinue marketing products
containing phenylpropanolamine due to risk of hemorrhagic stroke. In
response, many companies have voluntarily reformulated their products
to exclude phenylpropanolamine. Subsequently, on December 22, 2005, the
FDA published a Notice of Proposed Rulemaking (70 FR 75988) proposing
to categorize all over-the-counter nasal decongestants and weight
control drug products containing phenylpropanolamine preparations as
Category II, nonmonograph, i.e., not generally recognized as being safe
for human consumption. Most products containing phenylpropanolamine
intended for humans have been withdrawn from the market, but
phenylpropanolamine is still sold by prescription for veterinary uses.
While ephedrine and pseudoephedrine are pharmacologically different
(and have quite different therapeutic uses), they are directly
substitutable in the production of methamphetamine. This is because of
the similarity of the chemical structures of the two drugs.
Discussion of This Rule
In this rule, DEA is addressing two issues related to CMEA
implementation. First, DEA is proposing to eliminate the thresholds for
distribution, importation, and exportation of pseudoephedrine and
phenylpropanolamine; the threshold for distribution, importation, and
exportation of ephedrine was eliminated previously. Limits on retail
transactions are set in the CMEA and were addressed in DEA's Interim
Rule regarding the retail provisions of the CMEA (71 FR 56008,
September 26, 2006; corrected at 71 FR 60609, October 13, 2006).
Second, DEA is proposing to clarify that all distribution, importation,
and exportation transactions involving drug products containing
ephedrine, pseudoephedrine, or phenylpropanolamine are regulated
transactions.
Thresholds
Under the existing regulations (21 CFR 1310.04), the threshold for
non-retail distribution, import, and export of pseudoephedrine is 1
kilogram and for phenylpropanolamine, 2.5 kilograms. A single
transaction or multiple transactions in a month with a single customer
that equal or exceed the threshold are considered regulated
transactions and trigger the reporting and recordkeeping requirements
of 21 CFR part 1310. DEA has not established a threshold for ephedrine;
all non-retail distribution, import, and export transactions involving
ephedrine are already subject to recordkeeping and reporting
requirements.
CMEA mandates that DEA establish the total annual need for
ephedrine, pseudoephedrine, and phenylpropanolamine to be manufactured
or imported each calendar year to provide for the estimated medical,
scientific, research, and industrial needs of the United States, for
lawful export requirements, and for the establishment and maintenance
of reserve stocks. These requirements apply equally to products
containing these three List I chemicals as they do to the List I
chemicals themselves. To limit the supply of the chemicals to the
amount needed to meet the national need, CMEA requires DEA to establish
import and production quotas for all three chemicals. DEA published its
proposed 2007 assessment of annual needs for ephedrine,
pseudoephedrine, and phenylpropanolamine on October 19, 2006 (71 FR
61801). DEA published regulations implementing procedures for import
and production quotas on July 10, 2007 (72 FR 37439).
To obtain the information needed to assess the national need and
set quotas to limit imports and production to meet that need, DEA
identified two inadequacies regarding its existing regulations. First,
persons who manufacture or import prescription drugs containing the
chemicals are not registered. In another rulemaking, ``Registration
Requirements for List I Chemicals'' [Docket No. DEA-294, RIN 1117-
AB09], DEA is revising its registration requirements to cover
[[Page 65251]]
manufacturers and importers of prescription drugs containing these
chemicals and will issue quotas to them although the distribution and
export of prescription drugs containing the chemicals will continue to
be exempt from DEA regulatory control.
The second inadequacy involves the thresholds that apply to
pseudoephedrine and phenylpropanolamine. To determine the annual need
and set quotas, DEA must obtain information on all imports and
production involving the chemicals, not just those that exceed the
existing thresholds. The existing thresholds, although relatively low,
would allow a considerable market in the chemicals to continue
unregulated. For example, under the current 1 kilogram (2.2 pound)
threshold for pseudoephedrine, a person could import or distribute more
than 2 pounds a month, or approximately 25 pounds a year, of
pseudoephedrine without exceeding the threshold and triggering DEA's
controls. Assuming a low 50 percent conversion rate of pseudoephedrine
to methamphetamine, a person could annually manufacture approximately
12.5 pounds of methamphetamine with that total sum of sub-threshold
quantities. DEA analysis for 2006 estimates that the national range in
the street price for one pound of methamphetamine (powder) is between
$2,500 and $48,000. To further implement the Combat Methamphetamine
Epidemic Act of 2005, this rule seeks to curb the availability of
pseudoephedrine at the wholesale level for illicit purposes.
Additionally, under the current 2.5 kilogram (5.5 pound) threshold
for phenylpropanolamine, a person could import or distribute more than
5 pounds a month, or approximately 66 pounds a year of
phenylpropanolamine without exceeding the threshold and triggering
DEA's controls. Assuming a low 50 percent conversion rate of
phenylpropanolamine to amphetamine, a person could annually manufacture
approximately 33 pounds of amphetamine with that total sum of sub-
threshold quantities. The resulting amphetamine would have street value
comparable to methamphetamine. To further implement the Combat
Methamphetamine Epidemic Act of 2005, this rule seeks to curb the
availability of phenylpropanolamine at the wholesale level for illicit
purposes.
Currently, DEA is notified of all imports and exports of these
chemicals which exceed the established thresholds or for which no
threshold is established. DEA does not, however, receive import and
export notifications for imports and exports of listed chemicals less
than established thresholds. If DEA does not eliminate the threshold
for imports and exports of pseudoephedrine and phenylpropanolamine, DEA
will not have complete and accurate information regarding the
quantities of these chemicals imported into, and exported from, the
United States. Further, manufacturers and distributors are not required
to maintain records of distributions of listed chemicals at or below
established thresholds. Without the maintenance of these records, DEA
will not have complete and accurate information regarding the
quantities of these chemicals being distributed domestically.
To establish the controls that Congress mandated and limit imports
and production to that needed for legitimate uses, DEA is proposing to
eliminate the thresholds for all transactions involving the List I
chemicals pseudoephedrine and phenylpropanolamine. As discussed
previously, no threshold currently exists for transactions involving
the List I chemical ephedrine; thus, all transactions are regulated.
Any registrant manufacturing, distributing, importing, or exporting
pseudoephedrine or phenylpropanolamine, in any quantity, either as bulk
chemicals or in over-the-counter drug products, would be subject to the
reporting and recordkeeping requirements. Any manufacturer or importer
of prescription drug products containing one of the chemicals would
also be subject to reporting and recordkeeping requirements.
Importation of the chemicals is allowed only if it is within an import
quota that the importer has applied for and been granted by DEA. The
one exception to the import limits provided in CMEA is that an
individual may import not more than 7.5 grams in any 30-day period of a
scheduled listed chemical product (i.e., a product containing
ephedrine, pseudoephedrine, or phenylpropanolamine which may be
marketed or distributed lawfully in the United States under the Federal
Food, Drug, and Cosmetic Act as a nonprescription drug) by means of the
U.S. Postal Service or a private or commercial carrier (21 U.S.C.
844(a)).
The distribution and export of prescription drug products
containing the chemicals are not covered because DEA will be able to
obtain the information it needs for the assessment of annual national
needs from importers and manufacturers of these products. DEA has not
determined that prescription drug products are being diverted.
Regulated Transactions
The definition of ``regulated transaction'' as amended by CMEA (21
U.S.C. 802(39)(A)(iv)) excludes:
(iv) Any transaction in a listed chemical that is contained in a
drug that may be marketed or distributed lawfully in the United
States under the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 301
et seq.), subject to clause (v), unless--
(I) The Attorney General has determined under section 204 of the
Act (21 U.S.C. 814) that the drug or group of drugs is being
diverted to obtain the listed chemical for use in the illicit
production of a controlled substance; and
(II) The quantity of the listed chemical contained in the drug
included in the transaction or multiple transactions equals or
exceeds the threshold established for that chemical by the Attorney
General.
Section 814 (b) states that:
In removing a drug or group of drugs from exemption * * * the
Attorney General shall consider, with respect to a drug or group of
drugs that is proposed to be removed from exemption--
(1) The scope, duration, and significance of the diversion;
(2) Whether the drug or group of drugs is formulated in such a
way that it cannot be easily used in the illicit production of a
controlled substance; and
(3) Whether the listed chemical can be readily recovered from
the drug or group of drugs.
DEA in this rule is clarifying that nonprescription (``over-the-
counter'') drug products containing ephedrine, pseudoephedrine, and
phenylpropanolamine do not qualify for the exemption from the
definition of ``regulated transaction'' based on the three factors
listed in 21 U.S.C. 814(b).
Evaluation of Statutory Factors for Removal of Exemption From the
Definition of ``Regulated Transaction''
Factor 1: Scope, Duration, and Significance of Diversion
Throughout the late 1970s, methamphetamine was illicitly produced
primarily through the use of the precursor phenylacetone ( phenyl-2-
propanone (P2P)) by outlaw motorcycle gangs in the United States. In
response to the use of P2P, DEA controlled P2P as a schedule II
controlled substance in 1980, under the immediate precursor provisions
of the CSA, specifically 21 U.S.C. 811(e). Clandestine laboratory
operators responded by developing a variety of synthetic methods for
producing P2P and also migrated to the use of ephedrine as precursor
material.
Trafficking groups widely used a procedure for converting ephedrine
to methamphetamine that employed hydriodic acid and red phosphorus (HI/
Red P). Use of the HI/Red P technique
[[Page 65252]]
(also known as a ``hydriodic acid reduction'' or ``ephedrine
reduction'') exploded across the western and southwestern United States
through the 1980s, and by 1990 accounted for 90 percent of all
clandestine laboratory seizures reported to DEA.
With the rapid increase in the use of the HI/Red P technique
through the 1980s came increased law enforcement pressure. Purchases of
bulk ephedrine were loosely monitored, and legitimate domestic
suppliers of ephedrine began restricting or denying sales of bulk
ephedrine to questionable buyers. In response, clandestine
manufacturers turned to foreign suppliers, and thefts and diversion of
bulk shipments of ephedrine also began to increase across the United
States.
In 1989, DEA control of chemicals was initiated with passage of the
Chemical Diversion and Trafficking Act of 1988 (CDTA) (Subtitle A of
Title VI of Pub. L. 100-690). This law placed recordkeeping and
reporting requirements on a wide variety of precursors and essential
chemicals used in every aspect of clandestine drug manufacture,
including bulk powder ephedrine, pseudoephedrine, and
phenylpropanolamine. In response to the regulations, traffickers moved
to the illicit use of single-entity ephedrine OTC tablets as an
unregulated source of precursor material for the production of
methamphetamine.
The extraction of the precursor chemical ephedrine from OTC tablets
was an easy task. The tablets were simply ground using a kitchen
blender and ephedrine extracted with an appropriate solvent. Upon
filtration and evaporation of the solution, the traffickers were able
to isolate the ephedrine bulk powder. Traffickers began widely
exploiting what became known as the ``tablet loophole.''
Soon after, DEA began encountering ``ephedrine extraction
laboratories'' whose primary purpose was to recover ephedrine from OTC
tablets and capsules, either for resale on the black market or for use
in associated clandestine methamphetamine laboratories. Many
laboratories combined ephedrine extraction and methamphetamine
production.
Over the next three years, a number of well-publicized seizures of
rogue businesses (and prosecutions of their owners) began to impact the
tablet manufacturing industry, and the loophole allowing the sale of
single-entity ephedrine products was closed in late 1993 with the
passage of the Domestic Chemical Diversion Control Act of 1993 (DCDCA)
(Pub. L. 103-200).
In efforts to circumvent the provisions of the DCDCA, OTC tablet
manufacturers began marketing new ephedrine combination products (i.e.,
ephedrine/guaifenesin tablets), which were exempt from DCDCA controls.
The most dramatic shift forced by the CDTA and DCDCA, however, was a
rapid transition from ephedrine to pseudoephedrine as the primary
precursor for illicit methamphetamine manufacture. Although bulk
pseudoephedrine was formally controlled under the CDTA in 1989, OTC
products containing pseudoephedrine remained exempt under both the CDTA
and DCDCA. In contrast to ephedrine, pseudoephedrine was present in a
wide variety of pharmaceutical products, including hundreds of OTC cold
and allergy preparations, and formal monitoring and control was
considered (at that time) to be problematic. OTC pseudoephedrine-
containing products, therefore, represented an easy precursor source
for clandestine laboratory operators. By the mid-1990s, illicit
methamphetamine laboratories using pseudoephedrine surpassed those
still using ephedrine.
In 1996, the existing controls on precursor and essential chemicals
imposed by the CDTA and DCDCA were further tightened with the passage
of the Comprehensive Methamphetamine Control Act of 1996 (MCA) (Pub. L.
104-237). What followed was a series of legislative actions on both the
Federal and State levels to tighten controls on pharmaceutical products
that serve as precursor material for clandestine methamphetamine
laboratories. At the federal level, this effort included passage of the
Methamphetamine Anti-Proliferation Act of 2000 (MAPA) (Title XXXVI of
Pub. L. 106-310). Today, however, ephedrine and pseudoephedrine OTC
products continue to serve as the primary precursor source for the
illicit production of methamphetamine, which has spread across the
entire United States in epidemic proportions.
Current Seizures
Methamphetamine remains the primary drug produced in illicit
laboratories within the United States. Data from the El Paso
Intelligence Center's (EPIC) Clandestine Laboratory Database indicates
that more than 10,010 methamphetamine laboratories were seized in
calendar year 2004 and 5,883 laboratories in calendar year 2005 (as
reported to EPIC through 05/08/07). According to EPIC, from January
2000 through December 2006, there were 7,087 laboratories reportedly
using ephedrine and 46,290 reportedly using pseudoephedrine as
precursor material for methamphetamine production. Additionally EPIC
reports the seizure of 52 amphetamine laboratories (using
phenylpropanolamine) during the same period. The vast majority of these
laboratories used pharmaceutical products containing pseudoephedrine,
ephedrine, and phenylpropanolamine as the source of precursor material.
Illicit Uses
Factor 2: whether the drug or group of drugs is formulated in such
a way that it cannot be easily used in the illicit production of a
controlled substance.
Factor 3: whether the listed chemical can be readily recovered from
the drug or group of drugs.
The production of methamphetamine from ephedrine or pseudoephedrine
can be accomplished via a series of reactions using widely available
``recipes'' and can be accomplished with little or no chemistry
expertise. A variety of different methods exist to convert the
precursor material to methamphetamine. If very small batches are made,
there is not even a requirement to heat the reactants. For example,
quantities of ephedrine or pseudoephedrine, iodine, and red phosphorous
can be reacted with the addition of water and small quantities of
methamphetamine can be produced. For larger batches the reactants are
combined and heated for several hours. A variety of different reagents
can be used to make the conversion to methamphetamine if the precursors
ephedrine and pseudoephedrine are obtained. These reactants can also be
used to convert phenylpropanolamine to amphetamine. Manufacturing
procedures are readily available on the Internet and even unskilled
persons can obtain a 50-70 percent yield of methamphetamine or
amphetamine.
Note: Pseudoephedrine and ephedrine can also serve as precursor
material for the manufacture of the schedule I controlled substance
methcathinone. From January 2000 through December 2006, there were
165 methcathinone laboratory seizures reported to EPIC.
There is a common misconception in industry and among some in the
public that OTC drug products, particularly pseudoephedrine or
ephedrine products in combination with other medically active
ingredients (combo products), are somehow less likely to be diverted or
are less desirable among clandestine laboratory cooks for the
manufacture of methamphetamine. This is not the case.
Most of the clandestine laboratories found in the United States are
using tablets, either single-entity or
[[Page 65253]]
combination. In many of the methamphetamine exhibits analyzed by DEA
analytical laboratories, the presence of antihistamines is detected,
indicating that combination products were used in the reactions.
While the vast majority of clandestine laboratories seized have
used tableted pseudoephedrine and ephedrine products, gel caps and
liquid dosage form products can easily serve as the source of precursor
material for the production of methamphetamine. DEA scientific studies
show that liquid, gel cap, and combination products are easily used as
the source of precursor material and the pseudoephedrine/ephedrine from
these products can be easily extracted with appropriate reagents/
solvents. These reagents/solvents are all readily available at hardware
and auto parts stores in the United States.
The controlled substances produced from these chemicals,
methamphetamine and amphetamine, have a high abuse potential. The
public health consequences of the manufacture, trafficking, and abuse
of these two substances are well known and documented.
Findings
Therefore, based on the above discussion, the Administrator of the
Drug Enforcement Administration, pursuant to the authority delegated by
the Attorney General, finds, pursuant to the criteria specified in 21
U.S.C. 814(b), that drug products containing the List I chemicals
ephedrine, pseudoephedrine, and phenylpropanolamine are being diverted
for the illicit production of controlled substances, namely
methamphetamine and amphetamine. As DEA has discussed, these products
have a demonstrated history over the past 20 years of diversion for
illicit purposes. These List I chemicals are diverted regardless of
formulation--liquid, nonliquid, gel capsule--and regardless of dosage
strength. Accordingly, the Administrator of the Drug Enforcement
Administration, pursuant to the authority delegated by the Attorney
General, removes drug products containing the List I chemicals
ephedrine, pseudoephedrine, and phenylpropanolamine from exemption from
the definition of ``regulated transaction'' under 21 U.S.C.
802(39)(a)(iv). As such, unless otherwise exempted, such materials
would be subject to the chemical regulatory control provisions of the
CSA. DEA is proposing to add a new section 1310.14 removing these drugs
from the exemption.
The CSA has specifically exempted retail transactions involving
scheduled listed chemical products from the definition of regulated
transaction (21 U.S.C. 802(39)(a)(v)) and established a separate set of
regulations that control those retail transactions (71 FR 56008,
September 26, 2006; corrected at 71 FR 60609, October 13, 2006).
Technical Correction
While drafting this rulemaking, DEA became aware of an inaccurate
citation in 21 CFR 1310.10, the section paralleling the criteria to be
considered in evaluating the statutory factors for removal of exemption
from the definition of ``regulated transaction'' at 21 U.S.C. 814 and
discussed above. Specifically, the definition of ``regulated
transaction'' cited in 21 CFR 1310.10 is inaccurate. Therefore, to
alleviate any confusion, DEA is proposing to correct this citation.
Regulatory Certifications
Regulatory Flexibility Act
The Deputy Administrator hereby certifies that this rulemaking has
been drafted in accordance with the provisions of the Regulatory
Flexibility Act (RFA) (5 U.S.C. 601-612). Without this rule, DEA will
not be able to effectively implement the quota and import provisions of
CMEA.
As DEA has demonstrated throughout this document, traffickers and
others in search of the chemicals necessary for clandestine manufacture
of methamphetamine and amphetamine, are actively looking to exploit any
loophole in chemical controls.
As discussed above, the current thresholds create a loophole that
could be exploited by traffickers who can turn below-existing-threshold
quantities of List I chemicals into valuable, sought-after quantities
of methamphetamine and/or amphetamine. The diversion of below-threshold
quantities of these precursor chemicals could result in the illicit
production of significant quantities of methamphetamine and/or
amphetamine. CMEA was enacted to prevent this illicit production.
Congress specifically imposed a 3.6 gram daily sales limit, and a 9
gram 30-day purchase limit for all transactions involving scheduled
listed chemical products, as well as a 7.5 gram 30-day sales limit for
sales of scheduled listed chemical products made by mobile retail
vendors and mail order distributors. Congress, through the CMEA, also
limited the quantity of scheduled listed chemical products an
individual may import into the United States to not more than 7.5 grams
during a 30-day period by means of shipping through any private or
commercial carrier or the Postal Service. Congress further limited
importation of ephedrine, pseudoephedrine, and phenylpropanolamine,
prohibiting all imports except ``such quantities * * * as the Attorney
General finds to be necessary to provide for medical, scientific, or
other legitimate purposes,'' (21 U.S.C. 952(a)(1)). It is inconsistent
with Congressional intent to limit retail sales and purchases, and
importation, of scheduled listed chemical products while allowing
producers and traffickers to import or purchase from distributors
quantities 100 times greater than retail sales limits without
subjecting those transactions to any controls.
As noted previously, below-threshold transactions are not
documented to DEA; thus, DEA has no knowledge of the movement,
including importation and exportation, of below-threshold quantities of
pseudoephedrine and phenylpropanolamine. Specifically, non-retail
distribution, import, and export transactions involving less than 1
kilogram of pseudoephedrine (approximately 2.2 pounds), or less than
2.5 kilograms of phenylpropanolamine (approximately 5.5 pounds), per
month per customer would be exempt from DEA recordkeeping and reporting
requirements. DEA cannot monitor, and does not receive reports on,
these import, export, and distribution transactions. As discussed
previously, the diversion of below-threshold quantities of these
precursor chemicals could result in the illicit production of
significant quantities of methamphetamine and/or amphetamine.
Not removing the thresholds would also create a loophole in the
system of import and production quotas established by the CMEA and
implemented in an Interim Final Rule with Request for Comment (72 FR
37439, July 10, 2007). Without the reporting of all such transactions
involving ephedrine, pseudoephedrine, and phenylpropanolamine to DEA,
it would be more difficult for DEA to establish an assessment of annual
national needs and to administer individual quotas for these List I
chemicals. DEA would have incomplete information regarding these
chemicals on which to base its assessments and quotas.
Finally, this rule seeks to clarify that ephedrine,
pseudoephedrine, and phenylpropanolamine have been, and continue to be,
diverted for the illicit manufacture of controlled substances. By
making this statement, this document hereby would formally
[[Page 65254]]
include ephedrine, pseudoephedrine, and phenylpropanolamine, and drug
products containing ephedrine, pseudoephedrine, and
phenylpropanolamine, within the scope of the definition of ``regulated
transaction'' found at 21 U.S.C. 802(39). This rule is necessary to
avoid possible confusion in interpreting and applying the CMEA
definition of ``regulated transaction.''
DEA notes that the effect of eliminating the thresholds will impose
a minimal burden on regulated entities. Although it is likely that many
of the registrants who handle the two chemicals are small businesses
under the Small Business Administration definition of small entities,
the changes impose virtually no burden on these entities for three
reasons. First, most, if not all, legitimate transactions at the
import, export, manufacturing, and distribution level are in excess of
the previous thresholds. DEA does not expect any new registrations to
result from the change. Second, although it is possible that some
registrants may have some transactions that will be newly regulated,
the recordkeeping for these can be met with standard business records.
The only information required in records for regulated transactions is
the name and address of the seller and purchaser (plus their DEA
registration numbers, if applicable); the date of the transaction; the
name, quantity, and form of packaging of the listed chemical; the
method of transfer; and the method of identification used by the
customer and any unique identification number associated with the
identification. This information is normally included on purchase
orders or invoices and the shipping papers and is needed to complete
and track the transaction. As long as the purchaser can extract the
records for examination, if necessary, no additional effort is needed.
Because almost all business records for manufacturers, importers, and
distributors are now generated and transmitted electronically, DEA does
not expect that any registrant will need additional recordkeeping.
Third, if any person is importing or exporting in very small
quantities, there may be some additional import/export declarations
required, but these forms require less than half an hour to complete
and file. The only other requirement would be to report suspicious
small transactions. These reports also require less than a half hour to
complete and file.
As noted above, DEA does not believe that legitimate importers or
exporters are handling such small quantities. The purpose of this rule
is to close a loophole that could be exploited by those seeking the
chemicals for illicit purposes and to ensure that DEA can accurately
assess the legitimate need. DEA, therefore, certifies that the rule
will not have a significant economic impact on a substantial number of
small entities.
Executive Order 12866
The Deputy Administrator further certifies that this rulemaking has
been drafted in accordance with the principles in Executive Order 12866
section 1(b). It has been determined that this is ``a significant
regulatory action.'' Therefore, this action has been reviewed by the
Office of Management and Budget. This rule supports implementation of
provisions of the CMEA. The CMEA is expansive in its breadth,
essentially reclassifying ephedrine, pseudoephedrine, and
phenylpropanolamine as scheduled listed chemicals, imposes new retail
restrictions on these products, and mandates new domestic and import
quotas. Without this rule, traffickers could exploit below-threshold
transactions, which are not reported to DEA and for which records are
not required to be maintained, to divert valuable quantities of
pseudoephedrine and phenylpropanolamine for the clandestine manufacture
of methamphetamine and/or amphetamine. Further, without this rule, DEA
would not have complete information on which to base its assessment of
the annual national needs for the List I chemicals ephedrine,
pseudoephedrine, and phenylpropanolamine as DEA does not receive
information regarding below-threshold transactions. This lack of
information would create a loophole in the quota system, and would
prevent DEA from fulfilling its legislative mandate that imports of
pseudoephedrine and phenylpropanolamine be prohibited except for
medical, scientific, or other legitimate purposes. Without this rule,
DEA will not be able to effectively and fully implement the quota and
import provisions of the CMEA.
As discussed above, DEA does not anticipate that this change will
impose more than the minimal costs that would be associated with
reporting small transactions that the registrant thought suspicious and
possibly filing forms for import and export notifications. The benefits
of the rule are those associated with controlling access to chemicals
used to manufacture methamphetamine, and other controlled substances,
illicitly. As has been discussed extensively throughout this document,
traffickers and others are actively looking to exploit any loophole in
chemical controls to continue their operations. As noted previously,
the current thresholds could permit a person to divert approximately 25
pounds of pseudoephedrine and 66 pounds of phenylpropanolamine
annually, without exceeding existing thresholds. This rule closes a
loophole that could result in the undocumented diversion of these
chemicals for illicit production of significant quantities of
methamphetamine and/or amphetamine. As noted previously in this rule,
below-threshold transactions are not documented to DEA; the diversion
of below-threshold quantities of these precursor chemicals could result
in the illicit production of significant quantities of methamphetamine
and/or amphetamine.
Executive Order 12988
This regulation meets the applicable standards set forth in
sections 3(a) and 3(b)(2) of Executive Order 12988 Civil Justice
Reform.
Executive Order 13132
This rulemaking does not impose enforcement responsibilities on any
state; nor does it diminish the power of any state to enforce its own
laws. Accordingly, this rulemaking does not have federalism
implications warranting the application of Executive Order 13132.
Unfunded Mandates Reform Act of 1995
This rule will not result in the expenditure by state, local, and
tribal governments, in the aggregate, or by the private sector, of
$120,000,000 or more (adjusted for inflation) in any one year, and will
not significantly or uniquely affect small governments. Therefore, no
actions were deemed necessary under the provisions of the Unfunded
Mandates Reform Act of 1995.
Congressional Review Act
This rule is not a major rule as defined by section 804 of the
Small Business Regulatory Enforcement Fairness Act of 1996
(Congressional Review Act). This rule will not result in an annual
effect on the economy of $100,000,000 or more; a major increase in
costs or prices; or significant adverse effects on competition,
employment, investment, productivity, innovation, or on the ability of
United States-based companies to compete with foreign-based companies
in domestic and export markets.
[[Page 65255]]
Paperwork Reduction Act
This rule would require that records be maintained regarding
distributions of the List I chemicals pseudoephedrine and
phenylpropanolamine. These records are maintained as a normal course of
business.
The rule also proposes to reduce the thresholds for the List I
chemicals pseudoephedrine and phenylpropanolamine from 1 kilogram and
2.5 kilograms, respectively, to zero, thereby requiring that DEA
receive advance notification of all importations and exportations of
these List I chemicals. DEA notes that it already receives some Import/
Export Declarations if the cumulative amount of the transactions
exceeds the thresholds on a monthly basis. Therefore, DEA does not
believe that this change will significantly increase the burden
associated with this information collection. Specifically, DEA
estimates that 53 additional export notifications and 53 additional
export return declarations will be received annually. Further, DEA
estimates that 50 additional import declarations and 55 additional
import return declarations will be received annually. DEA assumes 10
percent of all imports will not be transferred in the first 30 days and
will necessitate submission of a subsequent return declaration. The
receipt of these additional forms increases the hour burden by 34 hours
annually. Therefore, DEA is revising its existing information
collection [OMB approval number 1117-0023 ``Import/Export Declaration
for List I and List II Chemicals'', DEA Form 486] to reflect the
increased burden associated with receipt of these import/export
declarations.
The Department of Justice, Drug Enforcement Administration, has
submitted the following information collection request to the Office of
Management and Budget for review and clearance in accordance with
review procedures of the Paperwork Reduction Act of 1995. The proposed
information collections are published to obtain comments from the
public and affected agencies. All comments and suggestions, or
questions regarding additional information, to include obtaining a copy
of the information collection instrument with instructions, should be
directed to Mark W. Caverly, Chief, Liaison and Policy Section, Office
of Diversion Control, Drug Enforcement Administration, Washington, DC
20537.
Written comments and suggestions from the public and affected
agencies concerning the collection of information are encouraged. Your
comments on the information collection-related aspects of this rule
should address one or more of the following four points:
(1) Evaluate whether the proposed collection of information is
necessary for the proper performance of the functions of the agency,
including whether the information will have practical utility;
(2) Evaluate the accuracy of the agency's estimate of the burden of
the proposed collection of information, including the validity of the
methodology and assumptions used;
(3) Enhance the quality, utility, and clarity of the information to
be collected; and
(4) Minimize the burden of the collection of information on those
who are to respond, including through the use of appropriate automated,
electronic, mechanical, or other technological collection techniques or
other forms of information technology, e.g., permitting electronic
submission of responses.
Overview of Information Collection 1117-0023
(1) Type of Information Collection: Revision of a Currently
Approved Collection.
(2) Title of the Form/Collection: Import/Export Declaration for
List I and List II Chemicals.
(3) Agency form number, if any, and the applicable component of the
Department sponsoring the collection:
Form number: DEA Form 486.
Component: Office of Diversion Control, Drug Enforcement
Administration, U.S. Department of Justice.
(4) Affected public who will be asked or required to respond, as
well as a brief Abstract:
Primary: Business or other for-profit.
Other: None.
Abstract: Persons importing, exporting, and conducting
international transactions with List I and List II chemicals must
notify DEA of those transactions in advance of their occurrence,
including information regarding the person(s) to whom the chemical will
be transferred and the quantity to be transferred. Persons must also
provide return declarations, confirming the date of the importation,
exportation, or international transaction and transfer, and the amounts
of the chemical transferred. This information is used to prevent
shipments not intended for legitimate purposes.
(5) An estimate of the total number of respondents and the amount
of time estimated for an average respondent to respond: A respondent
may submit multiple responses. The below table presents information
regarding the number of respondents, responses, and associated burden
hours.
----------------------------------------------------------------------------------------------------------------
Number of Number of Average time per
respondents responses response Total (hours)
----------------------------------------------------------------------------------------------------------------
Form 486 (export)..................... 239 8,050 0.2 hour (12 minutes)... 1,610
Form 486 (Export Return Declaration).. 239 8,050 0.08 hour (5 minutes)... 670.9
Form 486 (import)..................... 230 2,450 0.25 hour (15 minutes).. 612.5
Form 486 (import return declaration) * 230 2,695 0.08 hour (5 minutes)... 224.6
Form 486 (international transaction).. 9 111 0.2 hour (12 minutes)... 22.2
Form 486 (international transaction 9 111 0.08 hour (5 minutes)... 9.25
return declaration).
Quarterly reports for imports of 110 440 0.5 hour (30 minutes)... 220
acetone, 2-butanone, and toluene.
-------------------------------------------------------------------------
Total............................. 239 .............. ........................ 3,369.45
----------------------------------------------------------------------------------------------------------------
* DEA assumes 10 percent of all imports will not be transferred in the first 30 days and will necessitate
submission of a subsequent return declaration.
(6) An estimate of the total public burden (in hours) associated
with the collection: 3,370 annual burden hours.
If additional information is required contact: Lynn Bryant,
Department Clearance Officer, United States Department of Justice,
Justice Management Division, Policy and Planning Staff, Patrick Henry
Building, Suite 1600, 601 D Street, NW., Washington, DC 20530.
[[Page 65256]]
List of Subjects in 21 CFR Part 1310
Drug traffic control, Exports, Imports, Reporting and recordkeeping
requirements.
For the reasons set forth above, 21 CFR part 1310 is proposed to be
amended as follows:
PART 1310--RECORDS AND REPORTS OF LISTED CHEMICALS AND CERTAIN
MACHINES [AMENDED]
1. The authority citation for part 1310 continues to read as
follows:
Authority: 21 U.S.C. 802, 827(h), 830, 871(b), 890.
2. Section 1310.04 is amended by revising paragraphs (f)(1)(i)
table and (ii), (g)(1)(i) through (vii), and adding paragraphs
(g)(1)(viii) and (ix) to read as follows:
Sec. 1310.04 Maintenance of records.
* * * * *
(f) * * *
(1) * * *
(i) * * *
------------------------------------------------------------------------
Threshold by base
Code Chemical weight
------------------------------------------------------------------------
8522............... N-Acetylanthranilic acid, 40 kilograms.
its esters, and its salts.
8530............... Anthranilic acid, its 30 kilograms.
esters, and its salts.
8256............... Benzaldehyde............... 4 kilograms.
8735............... Benzyl cyanide............. 1 kilogram.
8675............... Ergonovine and its salts... 10 grams.
8676............... Ergotamine and its salts... 20 grams.
8678............... Ethylamine and its salts... 1 kilogram.
6695............... Hydriodic acid............. 1.7 kilograms (or 1
liter by volume).
8704............... Isosafrole................. 4 kilograms.
8520............... Methylamine and its salts.. 1 kilogram.
8502............... 3, 4-Methylenedioxyphenyl-2- 4 kilograms.
propanone.
8115............... N-Methylephedrine, its 1 kilogram.
salts, optical isomers,
and salts of optical
isomers.
8119............... N-Methylpseudoephedrine, 1 kilogram.
its salts, optical
isomers, and salts of
optical isomers.
6724............... Nitroethane................ 2.5 kilograms.
8317............... Norpseudoephedrine, its 2.5 kilograms.
salts, optical isomers,
and salts of optical
isomers.
8791............... Phenylacetic acid, its 1 kilogram.
esters, and its salts.
2704............... Piperidine and its salts... 500 grams.
8750............... Piperonal (also called 4 kilograms.
heliotropine).
8328............... Propionic anhydride........ 1 gram.
8323............... Safrole.................... 4 kilograms.
------------------------------------------------------------------------
(ii) For List I chemicals that are contained in scheduled listed
chemical products as defined in Sec. 1300.02(b)(34)(i), the thresholds
established in paragraph (g) of this section apply only to non-retail
distribution, import, and export. Sales of these products at retail are
subject to the requirements of Part 1314 of this chapter.
* * * * *
(g) * * *
(1) * * *
(i) Ephedrine, its salts, optical isomers, and salts of optical
isomers
(ii) Gamma-Butyrolactone (Other names include: GBL; Dihydro-2(3H)-
furanone; 1,2-Butanolide; 1,4-Butanolide; 4-Hydroxybutanoic acid
lactone; gamma-hydroxybutyric acid lactone)
(iii) Hypophosphorous acid and its salts (including ammonium
hypophosphite, calcium hypophosphite, iron hypophosphite, potassium
hypophosphite, manganese hypophosphite, magnesium hypophosphite, and
sodium hypophosphite)
(iv) Iodine
(v) N-phenethyl-4-piperidone (NPP)
(vi) Pseudoephedrine, its salts, optical isomers, and salts of
optical isomers
(vii) Phenylpropanolamine, its salts, optical isomers, and salts of
optical isomers
(viii) Red phosphorus
(ix) White phosphorus (Other names: Yellow Phosphorus)
* * * * *
3. Section 1310.10 is amended by revising paragraph (a)
introductory text to read as follows:
Sec. 1310.10 Removal of the exemption of drugs distributed under the
Food, Drug and Cosmetic Act.
(a) The Administrator may remove from exemption under section
1300.02(b)(28)(i)(D) any drug or group of drugs that the Administrator
finds is being diverted to obtain a listed chemical for use in the
illicit production of a controlled substance. In removing a drug or
group of drugs from the exemption the Administrator shall consider:
* * * * *
4. Section 1310.14 is added to read as follows:
Sec. 1310.14 Removal of exemption from definition of regulated
transaction.
The Administrator finds that the following drugs or groups of drugs
are being diverted to obtain a listed chemical for use in the illicit
production of a controlled substance and removes the drugs or groups of
drugs from exemption under Sec. 1300.02(b)(28)(i)(D) of this chapter
pursuant to the criteria listed in Sec. 1310.10 of this part:
(a) Nonprescription drugs containing ephedrine, its salts, optical
isomers, and salts of optical isomers.
(b) Nonprescription drugs containing pseudoephedrine, its salts,
optical isomers, and salts of optical isomers.
(c) Nonprescription drugs containing phenylpropanolamine, its
salts, optical isomers, and salts of optical isomers.
Dated: November 7, 2007.
Michele M. Leonhart,
Deputy Administrator.
[FR Doc. E7-22560 Filed 11-19-07; 8:45 am]
BILLING CODE 4410-09-P