[Federal Register: December 26, 2007 (Volume 72, Number 246)]
[Rules and Regulations]
[Page 72921-72929]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr26de07-6]
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DEPARTMENT OF JUSTICE
Drug Enforcement Administration
21 CFR Part 1312
[Docket No. DEA-276F]
RIN 1117-AB00
Reexportation of Controlled Substances
AGENCY: Drug Enforcement Administration (DEA), Department of Justice.
ACTION: Final rule.
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SUMMARY: The Controlled Substances Export Reform Act of 2005 amended
the Controlled Substances Import and Export Act to provide authority
for the Drug Enforcement Administration (DEA) to authorize the export
of controlled substances from the United States to another country for
subsequent export from that country to a second country, if certain
conditions and safeguards are satisfied. DEA is amending its
regulations to implement the new legislation.
DATES: Effective Date: This rule is effective January 25, 2008.
FOR FURTHER INFORMATION CONTACT: Mark W. Caverly, Chief, Liaison and
Policy Section, Office of Diversion Control, Drug Enforcement
Administration, Washington, DC 20537, Telephone (202) 307-7297.
SUPPLEMENTARY INFORMATION:
Background
The Controlled Substances Export Reform Act of 2005 (Pub. L. 109-
57) was enacted on August 2, 2005. The Act amends the Controlled
Substances Import and Export Act (CSIEA) to provide authority for the
Attorney General (and DEA, by delegation) \1\ to authorize the export
of controlled substances in schedules I and II, and narcotic controlled
substances in schedules III and IV, from the United States to another
country for subsequent export from that country to a second country, if
certain conditions and safeguards are satisfied.
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\1\ 28 CFR 0.100(b).
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Previously under the CSIEA (prior to the 2005 legislation), there
were no circumstances in which it was permissible to export a
controlled substance in schedules I and II, or a narcotic controlled
substance in schedules III and IV, for the purpose of reexport to
another country. Such controlled substances could lawfully be exported
only to the immediate country where they would be consumed.
The Controlled Substances Export Reform Act requires the following:
Notwithstanding [21 U.S.C. 953] subsections (a)(4) and (c)(3),
the Attorney General may authorize any controlled substance that is
in schedule I or II, or is a narcotic drug in schedule III or IV, to
be exported from the United States to a country for subsequent
export from that country to another country, if each of the
following conditions is met:
(1) Both the country to which the controlled substance is
exported from the United States (referred to in this subsection as
the `first country') and the country to which the controlled
substance is exported from the first country (referred to in this
subsection as the `second country') are parties to the Single
Convention on Narcotic Drugs, 1961, and the Convention on
Psychotropic Substances, 1971.
(2) The first country and the second country have each
instituted and maintain, in conformity with such Conventions, a
system of controls of imports of controlled substances which the
Attorney General deems adequate.
(3) With respect to the first country, the controlled substance
is consigned to a holder of such permits or licenses as may be
required under the laws of such country, and a permit or license to
import the controlled substance has been issued by the country.
(4) With respect to the second country, substantial evidence is
furnished to the Attorney General by the person who will export the
controlled substance from the United States that--
(A) The controlled substance is to be consigned to a holder of
such permits or licenses as may be required under the laws of such
country, and a permit or license to import the controlled substance
is to be issued by the country; and
(B) The controlled substance is to be applied exclusively to
medical, scientific, or other legitimate uses within the country.
(5) The controlled substance will not be exported from the
second country.
(6) Within 30 days after the controlled substance is exported
from the first country to the second country, the person who
exported the controlled substance from the United States delivers to
the Attorney General documentation certifying that such export from
the first country has occurred.
[[Page 72922]]
(7) A permit to export the controlled substance from the United
States has been issued by the Attorney General.
21 U.S.C. 953(f).
DEA Proposed Implementation of the Controlled Substances Export Reform
Act of 2005
To address the provisions of the Controlled Substances Export
Reform Act of 2005, DEA published a Notice of Proposed Rulemaking
(NPRM) (71 FR 61436, October 18, 2006). This rulemaking proposed
amending DEA regulations to implement this new legislation. Most of the
proposed amendments to the regulations either reiterated the new
statutory provisions added by the 2005 Act or specified the procedural
details for complying with the new statutory provisions. In three
respects, however, the proposed rule contained substantive requirements
not contained in the statute. The first additional proposed requirement
was that the exporter notify DEA when the shipment for reexport has
left the United States. The second additional proposed requirement was
that the reexport from the first country to the second country take
place within 90 days after the shipment leaves the United States. The
third additional proposed requirement was that bulk materials undergo
further manufacturing in the first country prior to being shipped to
the second country. This was the same requirement contained in existing
DEA regulations for reexports of nonnarcotic controlled substances in
schedules III and IV and schedule V controlled substances (21 CFR
1312.27(b)(5)).
Comments Received
DEA received nine comments on the Notice of Proposed Rulemaking.
Commenters included one pharmaceutical research and manufacturing
association, seven manufacturers (including one represented by a law
firm), and one member of the public. Most of the commenters generally
supported the rulemaking, but had a variety of comments regarding
certain aspects of the proposed rule. DEA has made certain
modifications to the proposed rule in view of the comments. The
comments, and DEA's responses, are discussed below.
Authority of DEA to issue substantive requirements not contained in
the statute: One commenter asserted that DEA is without authority under
the Controlled Substances Export Reform Act of 2005 ``to create new
criteria'' and thus that this final rule should be limited to those
substantive requirements mandated by Congress under the 2005 Act. In
support of this contention, this commenter asserted that ``Congress was
extraordinary [sic] specific in the Act on the conditions and criteria
under which schedule I and II controlled substances may be exported for
reexport.''
DEA Response: Under the CSIEA, Congress granted the Attorney
General express authority to ``promulgate and enforce any rules,
regulations, and procedures which he may deem necessary and appropriate
for the efficient execution of his functions under [the CSIEA].'' (21
U.S.C. 871(b) (incorporated into the CSIEA by 21 U.S.C. 965)). This
authority has been delegated to the DEA Administrator (28 CFR
0.100(b)). Thus, DEA has such rulemaking authority with respect to all
provisions of the CSIEA, including amendments thereto, such as those
made by the Controlled Substances Export Reform Act of 2005. Indeed, if
DEA were without such general rulemaking authority, the agency would
have no ability to issue any regulations implementing the Controlled
Substances Export Reform Act of 2005, as the 2005 legislation itself
contains no express delegation of regulatory authority. Accordingly,
this final rule is being issued pursuant to DEA's general authority
granted by Congress to promulgate regulations necessary and appropriate
for the efficient enforcement of the CSIEA.
That Congress included in the 2005 legislation very specific
criteria under which certain controlled substances may be reexported in
no way precludes or limits DEA's general rulemaking authority under the
CSIEA. This is illustrated by, among other things, reviewing the
longstanding import and export provisions of the CSIEA (21 U.S.C. 952
and 953), which also contain great specificity. Notwithstanding this
specificity in the statutes, DEA has promulgated a variety of
regulations (21 CFR part 1312) that impose restrictions beyond those
mandated by Congress.
Time for reexportation: In its NPRM, DEA proposed requiring that
the reexport from the first country to the second country take place
within 90 days after the shipment leaves the United States. Eight
commenters disagreed with this proposed requirement, citing a variety
of concerns.
Commenters who disagreed with the 90-day timeframe asserted that,
in some cases, it can take longer than 90 days to complete the
additional manufacturing and testing in the first country and to obtain
the permit from the second country. Further, these commenters asserted
that other controls required by the Controlled Substances Export Reform
Act are sufficient to ensure proper reexportation of controlled
substances.
One commenter asked that DEA, when evaluating time considerations,
bear in mind the system of estimates imposed under the treaties and
implement the reexport allowance in a manner that will ``prevent an
accumulation of raw materials and distortion of estimates.''
DEA Response: DEA has considered the commenters' concerns and their
explanations for those concerns. In addressing these comments, it is
useful to begin with a reiteration of some important general
principles. First, it should be noted that the United States has always
been a world leader in promoting international and domestic control of
narcotics and other controlled substances. As our nation is the world's
largest producer of pharmaceutical controlled substances, the controls
implemented by the United States play a crucial role in preventing
diversion worldwide. Moreover, taking steps to prevent the United
States from being a source of worldwide diversion directly benefits our
country since a portion of the controlled substances diverted into
illicit channels abroad can end up being sent back to the United States
through illicit channels.
Another key principle is that, as one of the commenters suggested,
reducing the accumulation of stocks of controlled substances tends to
decrease the opportunity for, and likelihood of, diversion. It has long
been recognized that the longer large supplies of controlled substances
remain idly stockpiled, the greater the possibility of diversion.
Consistent with these considerations, it should be noted that Congress,
in enacting the 2005 legislation allowing for reexports, contemplated
that ``[a]ll subsequent transfers of controlled substances would still
be subject to strict oversight by the DEA and will require a permit
from the Attorney General to prevent any potential abuse.'' 151 Cong.
Rec. H6671 (July 27, 2005).
Given these principles, DEA strongly believes that, from an
international drug control perspective, it is essential that the export
from the first country to the second country occur in a finite period
of time. The reexport allowance was not intended, and should not be
construed, to allow the United States to become a source of stockpiling
of controlled substances abroad for indefinite time periods. Moreover,
without some limitation on the time controlled substances may remain in
the first
[[Page 72923]]
country, a scenario could arise in which DEA has issued a permit
authorizing a reexport, yet be without sufficient documentation to
determine whether the shipment (i) has remained for many months in the
first country without being reexported, (ii) has been improperly
reexported to a different second country than that indicated on the
reexport application, or (iii) was properly reexported to the second
country but the reexporter failed to notify DEA within 30 days as
required by the statute. As DEA noted in the NPRM, it can be inferred
that one purpose of Congress' inclusion of the requirement that the
United States exporter notify DEA within 30 days of the exportation
from the first country to the second country is to provide a means for
DEA to maintain an awareness of the status of shipments leaving the
United States for reexport and thereby enhance the agency's ability to
monitor and prevent diversion of such shipments. Requiring that there
be a finite time within which the exportation from the first country to
the second country must occur eliminates the possibility that DEA would
be unable to ascertain the status of an approved reexport for an
indefinite period of time.
Nonetheless, based on the comments received, DEA has decided to
amend the regulation to double the time limit originally proposed.
Under this Final Rule, the exportation from the first country to the
second country may take place up to 180 days after the controlled
substance was exported from the United States.
Use of National Drug Codes: Proposed Sec. 1312.22(a) would require
that applicants for export permits include the National Drug Code (NDC)
number. One commenter suggested that the NDC number should only be
required if the drug or product exported is listed with the U.S. Food
and Drug Administration (FDA), because, this commenter asserted, some
research compounds, reference standards, and samples are not required
by the FDA to have an NDC number. Another commenter expressed its
opinion that, based on FDA regulations, NDC numbers are not assigned to
products for export, and countries outside the United States do not
require NDC numbers, so the requirement to provide an NDC number on the
DEA reexport permit application should be removed.
DEA Response: Requirements relating to NDC numbers are set forth in
regulations issued by FDA. The NDC number consists of three parts: The
labeler code, the product code, and the package code. Currently, FDA
assigns the labeler code, and the product and package codes are
assigned by the regulated industry within certain FDA parameters. On
August 29, 2006, FDA published a Notice of Proposed Rulemaking
[``Requirements for Foreign and Domestic Establishment Registration and
Listing for Human Drugs, Including Drugs that are Regulated Under a
Biologics License Application, and Animal Drugs'' (Docket No. 2005N-
0403, RIN 0910-AA49) (71 FR 51276)] proposing, among other things,
requirements regarding NDC numbers.
In view of the comments, DEA is modifying the proposed rule to
indicate that persons applying for a reexport permit must supply to DEA
the NDC number of a drug in accordance with FDA regulations. DEA
anticipates that the overwhelming majority of controlled substances
that will be reexported under this Final Rule will have NDC numbers.
However, the Final Rule has been modified so that, if no NDC number is
required under FDA regulations for a drug being exported from the
United States, the applicant for reexport will not be required to
supply an NDC number.
System of controls of imports: Consistent with the 2005
legislation, proposed Sec. 1312.22(c)(1) and (c)(2) would require the
countries to which the controlled substance is exported to be parties
to certain international conventions and to maintain, in conformity
with such conventions, a system of controls that DEA deems adequate. In
the text accompanying the proposed rule, DEA stated that DEA must be
able to make the foregoing determinations based on the information
contained in the permit application (DEA Form 161R). With respect to
these aspects of the proposed rule, one commenter stated: ``[I]t will
be extremely difficult for U.S. exporters to determine in advance of
applying for an export permit (to reexport) which countries the DEA has
determined maintain a system of controls that the agency `deems
adequate.' '' Another commenter requested ``that the permit application
not require the applicant to certify that the country maintains a
system of control of imports consistent with the requirements of the
treaties.'' However, a third commenter stated that ``the export permit
applicant should be able to state that to the best of their knowledge
and belief, the country of ultimate consumption maintains a system of
control of imports consistent with the requirements of the treaties.''
DEA Response: The requirements to which these comments pertain were
specifically included in the Controlled Substances Export Reform Act,
as codified in 21 U.S.C. 953(f)(1) and (2). These statutory
requirements are repeated essentially verbatim in the text of the
Proposed and Final rule (Sec. 1312.22(c)(1) and (c)(2)). However, in
view of the comments, DEA wishes to clarify the following points.
First, it was not DEA's intent to require the reexport permit applicant
to certify that the first and second countries maintain systems of
control which DEA deems adequate. Rather, as the statute indicates, DEA
must make the determination--as a prerequisite to issuing the permit--
that both the first and second countries are parties to the Single
Convention and Psychotropic Convention and maintain, in conformity with
such conventions, a system of controls of imports of controlled
substances which DEA deems adequate. The applicant will be required to
certify, on the DEA Form 161R, to the best of his/her belief, that
``the first and second countries have each instituted and maintain a
system for the control of these substances.'' This is the same
certification that traditional exporters have always been required to
make under the DEA Form 161.
Responsible official: Proposed Sec. 1312.22(c)(7) would require
the documentation to DEA to be signed by ``the responsible company
official.'' One commenter pointed out that large companies might have
several persons who meet these requirements and recommended that the
provision be changed to ``a responsible official.''
DEA Response: DEA agrees that there are circumstances in which
companies might have more than one official authorized or permitted to
sign documents providing the required information of DEA. Therefore,
DEA is amending 21 CFR 1312.22(c)(7) and 1312.22(d)(6) to permit a
responsible company official to sign the documents in question.
Further manufacture of bulk materials: Proposed Sec. 1312.22(d)(1)
would prohibit bulk substances from being reexported in the same form
as they were exported from the United States, i.e., the material must
undergo further manufacturing processes. Two commenters requested
definitions or clarifications of the terms ``further manufacturing''
and ``bulk materials.'' One commenter suggested that further
manufacturing should include processing, packaging, or relabeling and
that bulk materials should include bulk product, such as tablets,
capsules, solutions, suspensions, etc. That commenter also requested
clarification in the Final Rule that bulk dosage forms
[[Page 72924]]
may be reexported for labeling and packaging in the second country.
DEA Response: The Controlled Substances Act (CSA) defines
``manufacture'' as: ``the production, preparation, propagation,
compounding, or processing of a drug or other substance, either
directly or indirectly or by extraction from substances of natural
origin, or independently by means of chemical synthesis or by a
combination of extraction and chemical synthesis, and includes any
packaging or repackaging of such substance or labeling or relabeling of
its container'' (21 U.S.C. 802(15)). DEA believes that this definition
established by Congress is broad enough to encompass all controlled
substance manufacturing activities. The requirement in the Final Rule
that further manufacturing of bulk material take place in the first
country will be satisfied by any bona fide manufacturing activity that
fits within the broad CSA definition of ``manufacture.'' As mentioned
in the NPRM, this further manufacturing requirement is the same
requirement that exists in the current regulations for the
reexportation of nonnarcotic controlled substances in schedules III and
IV, and of controlled substances in schedule V. Those regulations have
been in place for many years, and are well-understood by the regulated
industry. DEA believes that the intent of this regulation, and the
definition of remanufacture, is clear; there is nothing in the export
regulations to supersede or otherwise interpret the definition of
``manufacture'' and DEA does not believe that further clarification is
warranted here.
Similarly, DEA believes that the concept of bulk substances is
well-understood within the regulated industry and does not require
further clarification. Congress used the term ``bulk manufacture'' in
the CSIEA without defining that term, see 21 U.S.C. 958(i), and DEA has
never attempted to define this term by regulation. DEA does not believe
that the issuance of this rule necessitates such a definition. One
example of how the term ``bulk manufacture'' has long been used by
registrants without difficulty is that all persons who seek to become
registered to manufacture schedule I and II controlled substances are
required to specify on their applications for registration (DEA Form
225) whether they are seeking to engage in ``bulk'' manufacturing or
some other type of manufacturing, such as dosage form manufacturing.
Reports of reexport to the second country: Proposed Sec.
1312.22(d)(4) and (d)(5) would require the United States exporter to
identify the second countries and quantities at the time of shipment.
One commenter asserted that shifts in demand may occur after the
product has been exported to the first country, so a list of second
countries and potential quantities should be a permissible option.
Another commenter believed that DEA should recognize that because of
manufacturing processes in the first country, the amounts of reexports
to the second country may vary from the original estimates. Thus, this
commenter asserted that the Final Rule should allow the United States
exporter to amend the 30-day export reports to keep DEA informed of
changes.
DEA Response: While DEA recognizes that international demand for
controlled substances may shift over time, the statute plainly
contemplates that both the first and second country must be identified
to DEA before the shipment leaves the United States in order for the
agency to make the assessments required by the statute. Among other
things, for DEA to meet its statutory and international treaty
obligations, DEA cannot issue a permit for the exportation, or
reexportation, of any controlled substance to any country when DEA has
information to show that the estimates or assessments submitted with
respect to that country for the current period, under the Single
Convention on Narcotic Drugs, 1961, or the Convention on Psychotropic
Substances, 1971, have been, or, considering the quantity proposed to
be imported, will be exceeded. Thus, the permit issued by DEA
authorizing the reexport must specify both the first and second
countries and may not be modified to change the second country after
the shipment leaves the United States.
Regarding variances in reexports to second countries due to
manufacturing in the first country, it should be noted that the statute
requires the applicant for reexport to provide DEA with substantial
evidence, prior to the shipment leaving the United States, that a
permit to import the controlled substance is to be issued by the second
country and that the proposed amount of controlled substance to be
reexported to the second country is needed for a medical, scientific,
or other legitimate use in that country. Also, as indicated above and
in the NPRM, the quantity of controlled substances must be such that
the importing country will not exceed its estimates or assessments
provided to the International Narcotics Control Board (INCB) of the
United Nations. Thus, before any shipment leaves the United States for
reexport, considerable planning and preparation should go into
determining the quantity of controlled substances that is ultimately
destined for the second country. Accordingly, there should be minimal
variance between the quantity set forth in the export permit and that
which is actually shipped to the second country. (DEA recognizes that
there may be some slight wastage of controlled substances in
manufacturing processes in the first country.)
Section 1312.22(c)(7) requires the United States exporter, within
30 days of exportation from the first country to the second country, to
report to DEA on company letterhead the actual quantity shipped. Those
who submit such reports will be reporting on quantifiable transactions
that have already occurred and have a responsibility to provide
accurate information in doing so. Therefore, amendments to this report
should not be necessary.
Time to report reexportation: One commenter requested that DEA
extend beyond 30 days the time required for the United States exporter
to provide notification of reexports from the first country to the
second country, because of the need to obtain information from other
parties.
DEA Response: This requirement was set by Congress (21 U.S.C.
953(f)(6)) and DEA is without authority to modify it by regulation.
Return of the product to the United States: Proposed Sec.
1312.22(d)(8) would provide for the reexporter to seek authorization
from DEA to return a shipment to the United States if such shipment has
been refused by the second country. One commenter urged DEA to allow
the reexporter to seek the same return authorization where the shipment
has been refused by the first country. This same commenter further
asked that, if the shipment is refused by the second country, the
reexporter be permitted to return the shipment to the first country.
Two other commenters requested clarification as to whether the United
States itself can serve as the second country.
DEA Response: As DEA discussed in the proposed rule, there are
circumstances in which a shipment has been exported from the United
States, but is refused by the consignee in the second country, or is
otherwise unacceptable or undeliverable. In these circumstances, the
exporter may seek permission from DEA, in appropriate circumstances, to
return the shipment to the registered exporter in the United States.
The language DEA proposed regarding this provision parallels the same
language as is currently in place for reexportation of nonnarcotic
controlled substances in schedules III
[[Page 72925]]
and IV, and controlled substances in schedule V. Under this provision,
DEA will assess each situation on a case-by-case basis in determining
whether it is appropriate to authorize the return of the shipment to
the United States. DEA is adopting the first suggestion of the
commenter to modify the rule to state expressly that if either the
first or second country refuses the shipment, the reexporter may seek
authorization from DEA to return the shipment to the United States. It
should be noted, however, that DEA's experiences with reexportation of
nonnarcotic controlled substances in schedules III and IV, and
controlled substances in schedule V, indicate that such returns are
expected to be very infrequent.
However, DEA cannot adopt the commenter's second suggestion--that
DEA allow shipments which have been rejected by the second country to
be returned to the first country. To do so would be the equivalent of
allowing an export to the first country without having obtained proper
approval before the shipment left the United States. Traditional
exports of narcotic drugs in schedule I, II, III, or IV, and
nonnarcotic controlled substances in schedule I or II are governed by
21 U.S.C. 953(a) and (c). Among the requirements of these provisions
are: That DEA determine, before the shipment leaves the United States,
that substantial evidence has been furnished that the controlled
substance is to be applied exclusively to medical, scientific, or other
legitimate uses within the country of import; that there is an actual
need for the controlled substance for medical, scientific, or other
legitimate uses within the country; and that DEA has issued a permit to
export the controlled substance for consumption in the country of
import. In order for DEA to make these determinations, the applicant
for the export permit must supply certain information and make certain
certifications on DEA Form 161. None of the foregoing requirements
would be satisfied if DEA allowed a shipment that it authorized for
reexport to be returned from the second country to the first country.
In addition, allowing such returns from the second country to the first
country could potentially disrupt the system of estimates and
assessments and statistical returns maintained by the INCB, which is
crucial to international drug control.
Regarding whether the United States may serve as the second
country, to allow controlled substances to be re-imported into the
United States by interpreting the term ``second country'' to include
the United States would be contrary to the intent of Congress in
enacting the legislation. As stated in House Report 109-115, part 1, at
2 (2005): ``The purpose of this legislation is to amend Section 1003 of
the Controlled Substances Import and Export Act [21 U.S.C. 953] by
allowing a controlled substance that has been exported from the United
States to be subsequently exported to a third country under certain
conditions and pending a permit from the Attorney General.'' (Emphasis
added.) Similarly, part 2 of the same House Report stated (at 2) that
the legislation ``will allow pharmaceutical companies to export
controlled substances to distribution centers for export to one
additional country.'' (Emphasis added.) Along the same lines, in
remarks made on the House floor upon moving to pass the Senate version
of the bill (S. 1395), Congressman Deal stated:
Under [then current law, as set forth in] the Controlled
Substances Import and Export Act, a company is not allowed to export
controlled substances to one country and then send it to a third
country. Companies that export controlled substances must make a
large number of long-distance, small shipments to individual
countries, incurring large shipping costs. Due to this restriction,
American manufacturers are less competitive than their foreign
competitors, which results in high-paying U.S. jobs being sent
overseas.
151 Cong. Rec. H6671 (July 27, 2005) (emphasis added).
Thus, the scenario that Congress sought to address through the
legislation entails the exportation of controlled substance drug
products manufactured (initially) in the United States for ultimate
consumption abroad (i.e., in a ``third country'').
In addition, even if Congress had expressed no intent as to whether
the ``second country'' referred to in 21 U.S.C. 953(f) could be the
United States (which was not the case), re-importation into the United
States would be impermissible unless the re-importer were able to
demonstrate that it met the requirements of 21 U.S.C. 952(a)(2).
Section 952(a)(2) governs importation of ``any controlled substance in
schedule I or II or any narcotic drug in schedule III, IV, or V,''
which encompasses all the controlled substances subject to 21 U.S.C.
953(f), the Controlled Substances Export Reform Act. The requirements
of Sec. 952(a)(2) are highly restrictive and unlikely to be
demonstrated where the applicant seeks to export a controlled substance
from the United States for re-importation into the United States.
Estimated times per response for filing DEA Form 161 and 161R: As
discussed in the preamble to the NPRM, DEA Form 161 is currently used
to report the exportation of controlled substances in schedules I and
II and narcotic controlled substances in schedules III and IV. DEA
proposed the establishment of new Form 161R for the reporting of
reexportations. The discussion of the Paperwork Reduction Act in the
preamble to the proposed rule included a table of the estimated number
of respondents and the amount of time estimated for an average
respondent to respond regarding the completion of these forms. One
commenter believed that the time estimates for completion of the
required forms were too low because they apparently did not consider
the time required to obtain the information needed to complete the
forms. The commenter did not provide its own estimates regarding the
time needed to complete the forms.
DEA Response: DEA estimates that it takes 30 minutes for a
respondent to complete DEA Form 161 for exportation of controlled
substances. DEA estimates that it takes a respondent 45 minutes to
complete DEA Form 161R for reexportation of controlled substances. DEA
recognizes that a variety of factors contribute to the time required to
complete these forms including, but not limited to, the number and
variety of controlled substances being exported or reexported, the
number of countries to which controlled substances are exported or
reexported, and the respondent's familiarity with the form. DEA notes
that these estimates are average estimates; it may take some persons
more time to complete these forms and it may take some less time.
Therefore, as the time burdens are estimates of the time an average
respondent takes to respond, and based on the varying factors
associated with each exportation or reexportation of controlled
substances, DEA believes that these estimates are accurate, on average,
and is not adjusting the time burdens associated with this collection.
Other Considerations
Treaty Considerations
As discussed in the NPRM, the first two subsections of the
Controlled Substances Export Reform Act of 2005 pertain to the Single
Convention on Narcotic Drugs, 1961 (Single Convention), and the
Convention on Psychotropic Substances, 1971 (Psychotropic Convention).
Under these provisions, a reexport may take place only if both the
first and second country are parties to both treaties and only if the
Attorney General (DEA by delegation) determines that both the first
country and the second country maintain an adequate system of controls
in conformity with the treaties.
[[Page 72926]]
Thus, Congress expressly intended that reexports take place in
accordance with the treaties. The control measures imposed under the
Controlled Substances Export Reform Act of 2005, along with the
regulations being finalized here, are intended to work in tandem with
the international control regimes under the treaties. The ultimate goal
of the 2005 Act and this Final Rule is to permit exportation of
controlled substances in schedules I and II and narcotic controlled
substances in schedules III and IV from the United States to a first
country for subsequent exportation to one or more second countries
while preventing international diversion resulting from reexports.
Whenever considering safeguards against diversion of international
shipments, one must bear in mind the backdrop of the treaties. Toward
this end, the following treaty principles are noted.
Under the Single Convention, each country that is a party to the
treaty is required to furnish the International Narcotics Control Board
(INCB) with annual estimates of, among other things, the quantities of
narcotic drugs on hand, the anticipated amounts that will be consumed
by the party for legitimate purposes, and the anticipated production
quantities. The Single Convention also requires parties to furnish the
INCB with statistical returns for the prior year, indicating the
amounts of drugs produced, utilized, consumed, imported, exported,
seized, disposed of, and in stock. The Psychotropic Convention requires
the parties to provide the INCB with statistical reports and
assessments containing similar information with respect to psychotropic
substances. Through the collection of this information, the INCB
provides exporting countries with information on the legitimate
requirements of the importing countries and can take steps to reduce
the likelihood of international diversion. For example, the INCB may
notify parties if the quantity of drugs exported to a particular
country exceeded the estimates for that country. Parties that receive
such notification from the INCB are prohibited from authorizing further
exports of the drug concerned to that country.
Issuance of Permits
Under the 2005 Act, before a controlled substance can be exported
for subsequent reexport, the exporter must obtain from DEA a permit
that authorizes the export for this purpose. Consistent with the 2005
Act, DEA may issue such a permit only if each of the conditions
specified in the Act is met. Each of these conditions is restated in
this Final Rule. Although most of these conditions are self-
explanatory, some additional explanation is warranted.
DEA will be issuing a new application form, DEA Form 161R, for a
permit to export controlled substances for subsequent reexport in
accordance with the 2005 Act. The statute requires the reexporter (as a
condition of obtaining an export permit from DEA) to specify both the
first and the second countries, and to provide substantial evidence
that, with respect to the second country, the controlled substance is
to be consigned to a holder of such permits or licenses as may be
required under the laws of such country, and a permit or license to
import the controlled substance is to be issued by the country. In its
NPRM, DEA discussed what would constitute ``substantial evidence'' for
purposes of subsection (4) of the 2005 Act. Specifically, if on the
completed DEA Form 161R, the applicant has identified an appropriately
licensed or permitted consignee in the second country and certified
that the second country is a party to the Conventions and maintains a
system of controls of imports consistent with the requirements of the
treaties, and so affirmed in the affidavit section of the application,
DEA will consider this substantial evidence that a permit or license to
import the controlled substance will be issued by the second country.
Failure to comply with the CSIEA and its implementing regulations,
including those set forth in this rulemaking, may result in the
imposition of penalties and/or administrative remedies as provided in
the CSIEA. As with all statutory and regulatory provisions that DEA
administers, the agency will evaluate any transgressions involving this
Final Rule on a case-by-case basis, taking into account the totality of
the circumstances, in determining the appropriate course of action.
Reexportation to More Than One Second Country
DEA believes it is consistent with the text, structure, and purpose
of the 2005 Act to allow a shipment of controlled substances to be
exported from the United States to a ``first country'' for reexport to
more than one ``second country'' (but not further export from any
second country to a third country), provided the exporter notifies DEA
of this intent in the application for export permit, and provided
further that the statute is fully complied with in all other respects.
DEA received one comment discussing this issue. The commenter supported
DEA's position, agreeing that such an interpretation was contemplated
in the Controlled Substances Export Reform Act. Therefore, this
provision is being finalized without change. This Final Rule expressly
provides for reexport to more than one second country, and the new Form
161R is structured accordingly.
Refused Shipments
As discussed previously, there are circumstances in which a
shipment has been exported from the United States, but is refused by
the consignee in the second country, or is otherwise unacceptable or
undeliverable. In these circumstances, the exporter may seek permission
from DEA, in appropriate circumstances, to return the shipment to the
registered exporter in the United States. DEA proposed applying the
same procedures to address this circumstance as already exist for the
reexportation of nonnarcotic controlled substances in schedule III and
IV, and controlled substances in schedule V (21 CFR 1312.27(b)(5)(iv)).
DEA did not receive any comments seeking revision of this proposed
language. Therefore, it is adopted as proposed.
Regulatory Certifications
Regulatory Flexibility Act
The Deputy Assistant Administrator hereby certifies that this
rulemaking has been drafted in accordance with the Regulatory
Flexibility Act (5 U.S.C. 601-612), has reviewed this regulation, and
by approving it certifies that this regulation will not have a
significant economic impact on a substantial number of small entities.
This rulemaking permits schedule I and II controlled substances, and
narcotic controlled substances in schedules III and IV, to be exported
from the United States to the first country for subsequent reexport to
second countries for consumption. Previously such reexportation was not
permitted within DEA law and regulations.
Executive Order 12866
The Deputy Assistant Administrator further certifies that this
rulemaking has been drafted in accordance with the principles in
Executive Order 12866 Sec. 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.
Executive Order 12988
This regulation meets the applicable standards set forth in
Sec. Sec. 3(a) and 3(b)(2) of Executive Order 12988 Civil Justice
Reform.
[[Page 72927]]
Executive Order 13132
This rulemaking does not preempt or modify any provision of state
law; nor does it 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.
Paperwork Reduction Act of 1995
The Department of Justice, Drug Enforcement Administration, is
revising the information collection entitled ``Application for Permit
to Export Controlled Substances'', by adding a new DEA Form 161R to be
used by persons applying for a permit to reexport controlled substances
in schedules I and II, and narcotic controlled substances in schedules
III and IV. DEA has submitted the new DEA Form 161R and the 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.
Overview of this information collection
(1) Type of Information Collection: Revision of an existing
collection.
(2) Title of the Form/Collection: Application for Permit to Export
Controlled Substances.
(3) Agency form number, if any, and the applicable component of the
Department of Justice sponsoring the collection:
Form Number: DEA Form 161, Application for Permit to Export
Controlled Substances; DEA Form 161R, Application for Permit to Export
Controlled Substances for Subsequent Reexport.
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: Title 21 CFR 1312.21 and 1312.22 require persons who
export controlled substances in schedules I and II and who reexport
controlled substances in schedules I and II and narcotic controlled
substances in schedules III and IV to obtain a permit from DEA.
Information is used to issue export permits, exercise control over
exportation of controlled substances, and compile data for submission
to the United Nations to comply with treaty requirements.
(5) An estimate of the total number of respondents and the amount
of time estimated for an average respondent to respond: It is estimated
that 90 respondents will respond, with submissions as follows:
----------------------------------------------------------------------------------------------------------------
Number of
responses Average time per response Total (hours)
----------------------------------------------------------------------------------------------------------------
DEA Form 161 (exportation only)............... 2,200 30 minutes (0.5 hours).......... 1,100
DEA Form 161R (reexportation)................. 400 45 minutes (0.75 hours)......... 300
Certification of exportation from United 400 15 minutes (0.25 hours)......... 100
States to first country.
Certification of reexportation from first 1,200 15 minutes (0.25 hours)......... 300
country to second country*.
Total..................................... 4,200 ................................ 1,800
----------------------------------------------------------------------------------------------------------------
* Assumes three separate reexports to second countries
(6) An estimate of the total public burden (in hours) associated
with the collection: The total public burden (in hours) for this
collection is estimated to be 1,800 hours.
Congressional Review Act
This rule is not a major rule as defined by Sec. 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.
List of Subjects in 21 CFR Part 1312:
Administrative practice and procedure, Drug traffic control,
Exports, Imports, Reporting and recordkeeping requirements.
0
For the reasons set out above, 21 CFR part 1312 is amended as follows:
PART 1312--[AMENDED]
0
1. The authority citation for part 1312 continues to read as follows:
Authority: 21 U.S.C. 952, 953, 954, 957, 958.
0
2. Section 1312.22 is amended by revising paragraph (a) and adding
paragraphs (c) through (e) to read as follows:
Sec. 1312.22 Application for export permit.
(a) An application for a permit to export controlled substances
shall be made on DEA Form 161, and an application for a permit to
reexport controlled substances shall be made on DEA Form 161R. Forms
may be obtained from, and shall be filed with, the Drug Enforcement
Administration, Import/Export Unit, Washington, DC 20537. Each
application shall show the exporter's name, address, and registration
number; a detailed description of each controlled substance desired to
be exported including the drug name, dosage form, National Drug Code
(NDC) number (in accordance with Food and Drug Administration
regulations), the Administration Controlled Substance Code Number as
set forth in Part 1308 of this chapter, the number and size of packages
or containers, the name and quantity of the controlled substance
contained in any finished dosage units, and the quantity of any
controlled substance (expressed in anhydrous acid, base, or alkaloid)
given in kilograms or parts thereof. The application shall include the
name, address, and business of the consignee, foreign port of entry,
the port of exportation, the approximate date of exportation, the name
of the exporting carrier or vessel (if known, or if unknown it should
be stated whether shipment will be made by express,
[[Page 72928]]
freight, or otherwise, exports of controlled substances by mail being
prohibited), the date and number, if any, of the supporting foreign
import license or permit accompanying the application, and the
authority by whom such foreign license or permit was issued. The
application shall also contain an affidavit that the packages are
labeled in conformance with obligations of the United States under
international treaties, conventions, or protocols in effect on May 1,
1971. The affidavit shall further state that to the best of affiant's
knowledge and belief, the controlled substances therein are to be
applied exclusively to medical or scientific uses within the country to
which exported, will not be reexported therefrom and that there is an
actual need for the controlled substance for medical or scientific uses
within such country, unless the application is submitted for reexport
in accordance with paragraphs (c) and (d) of this section. In the case
of exportation of crude cocaine, the affidavit may state that to the
best of affiant's knowledge and belief, the controlled substances will
be processed within the country to which exported, either for medical
or scientific use within that country or for reexportation in
accordance with the laws of that country to another for medical or
scientific use within that country. The application shall be signed and
dated by the exporter and shall contain the address from which the
substances will be shipped for exportation.
* * * * *
(c) Notwithstanding paragraphs (a) and (b) of this section, the
Administration may authorize any controlled substance listed in
Schedule I or II, or any narcotic drug listed in Schedule III or IV, to
be exported from the United States to a country for subsequent export
from that country to another country, if each of the following
conditions is met, in accordance with Sec. 1003(f) of the Act (21
U.S.C. 953(f)):
(1) Both the country to which the controlled substance is exported
from the United States (referred to in this section as the ``first
country'') and the country to which the controlled substance is
exported from the first country (referred to in this section as the
``second country'') are parties to the Single Convention on Narcotic
Drugs, 1961, and the Convention on Psychotropic Substances, 1971;
(2) The first country and the second country have each instituted
and maintain, in conformity with such Conventions, a system of controls
of imports of controlled substances which the Administration deems
adequate;
(3) With respect to the first country, the controlled substance is
consigned to a holder of such permits or licenses as may be required
under the laws of such country, and a permit or license to import the
controlled substance has been issued by the country;
(4) With respect to the second country, substantial evidence is
furnished to the Administration by the applicant for the export permit
that--
(i) The controlled substance is to be consigned to a holder of such
permits or licenses as may be required under the laws of such country,
and a permit or license to import the controlled substance is to be
issued by the country; and
(ii) The controlled substance is to be applied exclusively to
medical, scientific, or other legitimate uses within the country;
(5) The controlled substance will not be exported from the second
country;
(6) The person who exported the controlled substance from the
United States has complied with paragraph (d) of this section and a
permit to export the controlled substance from the United States has
been issued by the Administration; and
(7) Within 30 days after the controlled substance is exported from
the first country to the second country, the person who exported the
controlled substance from the United States must deliver to the
Administration documentation certifying that such export from the first
country has occurred. If the permit issued by the Administration
authorized the reexport of a controlled substance from the first
country to more than one second country, notification of each
individual reexport shall be provided. This documentation shall be
submitted on company letterhead, signed by a responsible company
official, and shall include all of the following information:
(i) Name of second country;
(ii) Actual quantity shipped;
(iii) Actual date shipped; and
(iv) DEA export permit number for the original export.
(d) Where a person is seeking to export a controlled substance for
reexport in accordance with paragraph (c) of this section, the
following requirements shall apply in addition to (and not in lieu of)
the requirements of paragraphs (a) and (b) of this section:
(1) Bulk substances will not be reexported in the same form as
exported from the United States, i.e., the material must undergo
further manufacturing process. This further manufactured material may
only be reexported to a second country.
(2) Finished dosage units, if reexported, must be in a commercial
package, properly sealed and labeled for legitimate medical use in the
second country.
(3) Any proposed reexportation must be made known to the
Administration at the time the initial DEA Form 161R is submitted. In
addition, the following information must also be provided where
indicated on the form:
(i) Whether the drug or preparation will be reexported in bulk or
finished dosage units;
(ii) The product name, dosage strength, commercial package size,
and quantity;
(iii) The name of consignee, complete address, and expected
shipment date, as well as the name and address of the ultimate
consignee in the second country.
(4) The application (DEA Form 161R) must also contain an affidavit
that the consignee in the second country is authorized under the laws
and regulations of the second country to receive the controlled
substances. The affidavit must also contain the following statement, in
addition to the statements required under paragraph (a) of this
section:
(i) That the packages are labeled in conformance with the
obligations of the United States under the Single Convention on
Narcotic Drugs, 1961, the Convention on Psychotropic Substances, 1971,
and any amendments to such treaties;
(ii) That the controlled substances are to be applied exclusively
to medical or scientific uses within the second country;
(iii) That the controlled substances will not be further reexported
from the second country, and
(iv) That there is an actual need for the controlled substances for
medical or scientific uses within the second country.
(5) If the applicant proposes that the shipment of controlled
substances will be separated into parts after it arrives in the first
country and then reexported to more than one second country, the
applicant shall so indicate on the DEA Form 161R, providing all the
information required in this section for each second country.
(6) Within 30 days after the controlled substance is exported from
the United States, the person who exported the controlled substance
shall deliver to the Administration documentation on the DEA Form 161R
initially completed for the transaction certifying that such export
occurred. This documentation
[[Page 72929]]
shall be signed by a responsible company official and shall include all
of the following information:
(i) Actual quantity shipped;
(ii) Actual date shipped; and
(iii) DEA export permit number.
(7) The controlled substance will be reexported from the first
country to the second country (or second countries) no later than 180
days after the controlled substance was exported from the United
States.
(8) Shipments that have been exported from the United States and
are refused by the consignee in either the first or second country, or
are otherwise unacceptable or undeliverable, may be returned to the
registered exporter in the United States upon authorization of the
Administration. In these circumstances, the exporter in the United
States shall file a written request for the return of the controlled
substances to the United States with a brief summary of the facts that
warrant the return, along with a completed DEA Form 357, Application
for Import Permit, with the Drug Enforcement Administration, Import/
Export Unit, Washington, DC 20537. The Administration will evaluate the
request after considering all the facts as well as the exporter's
registration status with the Administration. If the exporter provides
sufficient documentation, the Administration will issue an import
permit for the return of these drugs, and the exporter can then obtain
an export permit from the country of original importation. The
substance may be returned to the United States only after affirmative
authorization is issued in writing by the Administration.
(e) In considering whether to grant an application for a permit
under paragraphs (c) and (d) of this section, the Administration shall
consider whether the applicant has previously obtained such a permit
and, if so, whether the applicant complied fully with the requirements
of this section with respect to that previous permit.
0
3. Section 1312.23 is amended by revising paragraphs (a) and (f) to
read as follows:
Sec. 1312.23 Issuance of export permit.
(a) The Administrator may authorize exportation of any controlled
substance listed in Schedule I or II or any narcotic controlled
substance listed in Schedule III or IV if he finds that such
exportation is permitted by subsections 1003(a), (b), (c), (d), or (f)
of the Act (21 U.S.C. 953(a), (b), (c), (d), or (f).
* * * * *
(f) No export permit shall be issued for the exportation, or
reexportation, of any controlled substance to any country when the
Administration has information to show that the estimates or
assessments submitted with respect to that country for the current
period, under the Single Convention on Narcotic Drugs, 1961, or the
Convention on Psychotropic Substances, 1971, have been, or, considering
the quantity proposed to be imported, will be exceeded. If it shall
appear through subsequent advice received from the International
Narcotics Control Board of the United Nations that the estimates or
assessments of the country of destination have been adjusted to permit
further importation of the controlled substance, an export permit may
then be issued if otherwise permissible.
Dated: December 5, 2007.
Joseph T. Rannazzisi,
Deputy Assistant Administrator, Office of Diversion Control.
[FR Doc. E7-24919 Filed 12-21-07; 8:45 am]
BILLING CODE 4410-09-P