[Federal Register Volume 61, Number 244 (Wednesday, December 18, 1996)]
[Proposed Rules]
[Pages 66637-66639]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-32077]
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DEPARTMENT OF JUSTICE
Drug Enforcement Administration
21 CFR Parts 1301 and 1304
[DEA-143P]
RIN 1117-AA36
Establishment of Freight Forwarding Facilities for DEA
Distributor Registrants
AGENCY: Drug Enforcement Administration (DEA), Justice.
ACTION: Proposed rule.
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SUMMARY: In response to industry concerns, the Drug Enforcement
Administration (DEA) proposes to amend its regulations to define the
term freight forwarding facility. DEA further proposes to amend its
regulations to exempt certain freight forwarder facilities from
registration requirements. These amendments will establish regulatory
guidelines under which distributors registered with DEA may utilize
freight forwarding facilities when shipping controlled substances to
another DEA registrant.
DATES: February 18, 1996.
ADDRESSES: Comments and objections should be submitted in quintuplicate
to the Deputy Assistant Administrator, Office of Diversion Control,
Drug Enforcement Administration, Washington, DC 20537, Attention: DEA
Federal Register Representative/CCR.
FOR FURTHER INFORMATION CONTACT:
Mr. G. Thomas Gitchel, Chief, Liaison and Policy Section, Office of
Diversion Control, Drug Enforcement Administration, Washington, DC
20537, Telephone (202) 307-7297.
SUPPLEMENTARY INFORMATION:
I. Background
For many years, distributors registered with the DEA have utilized
the services of common carriers to transport controlled substances to
other registrants. These common carriers, who are not DEA registrants
and therefore are not subject to the security and record keeping
regulations promulgated pursuant to the Controlled Substances Act
(CSA), often transfer the controlled substances from one conveyance to
another at certain points during the shipment. In-transit losses due to
theft of controlled substances have frequently occurred at these
transfer points.
In discussions with DEA, distributors have expressed their interest
in utilizing ``freight forwarding facilities,'' enabling them to employ
proprietary or contracted shipping and better prevent in-transit
losses. These controlled substance distributors represent that
permitting distributors to utilize freight forwarding facilities will
not only minimize in-transit losses, it will also facilitate more
timely delivery of controlled substances and help lower health care
costs.
To accomplish these goals, DEA proposes to permit distributors to
extend their registrations to freight forwarding facilities operated by
the distributor. In so doing, DEA is providing distributors an
alternative means of delivery and allowing them to exercise direct
control and responsibility for the controlled substances. By so
extending the registration, the distributor will be required to comply
with certain security and record keeping requirements proposed below.
Pursuant to these regulations, DEA proposes to allow distributors
to use certain designated freight forwarding facilities as an extension
of their registration. However, DEA has determined that due to security
concerns, returns of controlled substances cannot be routed through the
freight forwarding facilities because the registrant operating the
facility will have no control over when drugs will be returned to the
facility. Distributors who use freight forwarding facilities will not
be required to obtain a separate registration for such facilities, but
will be required to comply with record keeping and security
requirements detailed below.
Distributors will be required to notify DEA in advance of their
intent to utilize a freight forwarding facility. The distributor
understands that if DEA approves the distributor's request, DEA will
have the authority to conduct administrative inspections of the freight
forwarding facility pursuant to 21 U.S.C. 822 and 880.
II. Notification of Use of a Freight Forwarding Facility
Although no separate DEA registration will be required for
utilization of freight forwarding facilities for DEA distributor
registrants, it will be necessary to notify DEA of their existence. DEA
distributor registrants who intend to operate a freight forwarding
facility must first notify both the DEA office in the area in which the
distributor is located and the office in which the freight forwarding
facility will be located. This facility must be for exclusive use of
the named DEA distributor registrant and cannot be shared for use by
another DEA registrant. Notification must be accomplished by registered
letter, return receipt requested. If DEA does not communicate written
disapproval within 21 days after confirmed receipt, the facility will
be considered approved. Reasons for disapproval of a freight forwarding
facility might include a registrant's failure to comply with DEA
regulations or a history of losses.
Notification should consist of the distributor's DEA registration
number, registered address and the address of the freight forwarding
facility. A description of the operation of the freight forwarding
facility should be included, listing such information as the hours of
operation and the name, home address and date of birth of the
designated responsible person. Information should be provided
indicating what measures have been taken to limit accessibility to
controlled substances at the facility. Notification should also include
a description of the physical security in place at the facility. The
physical security description should include a summary of the
controlled substance temporary storage area including dimensions,
specifications and alarm devices and identify the central station
provider or delineation of the registrant's control station as
specified in 21 CFR 1301.72(b)(4)(v).
A description of the recordkeeping procedures should also be
included in the notification by providing an outline of recordkeeping
procedures or copies of sample records.
III. Security of Freight Forwarding Facilities
The DEA distributor registrant utilizing a freight forwarding
facility is
[[Page 66638]]
responsible for providing adequate security to guard against losses of
controlled substances. DEA is proposing to amend 21 CFR Part 1301 by
adding a new Section, 1301.77, outlining the security requirements. The
new section requires either continuous observation of controlled
substances stored in a segregated area by a designated responsible
person(s) during the temporary storage, or by the installation of
appropriate physical security measures. In some situations, a
combination of the aforementioned two options may be permitted. The
general security requirements currently found in 21 CFR 1301.71 are
applicable and should be emphasized, since the freight forwarding
facilities are located outside the normal realm of the distributor's
registered location. It is necessary to pay special attention to
security considerations, such as the extent of unsupervised public
access and adequacy of supervision over employees within the facility.
Definite procedures are required to be in place to control maintenance
personnel and nonemployee service personnel.
Proposed physical security controls for all controlled substances
routed through the freight forwarding facility, including Schedule II
controlled substances, are those currently in place for Schedule III-V
substances as set forth in 21 CFR 1301.72(b), unless the substances
will remain under the constant observation of responsible person(s).
Access to controlled substances will be kept to an absolute minimum
number of specifically authorized individuals. Only sealed containers,
which do not identify controlled substances contents on the outside
packaging, will be permitted to be temporarily stored or shipped
through the freight forwarding facility. DEA distributor registrants
will be permitted to utilize their proprietary fleet, or a specific
contract carrier. Temporary storage at the freight forwarding facility
will be permitted for a period of less than twenty-four (24) hours.
IV. Recordkeeping
There must be a clearly defined audit trail as part of the complete
records maintained for all controlled substances transferred through
the freight forwarding facility. DEA is proposing to amend the
regulations by adding 21 CFR Section 1304.03(i), to specify the
recordkeeping requirements. The records must contain dates, times of
transfer, authorized signatures and number of cartons, crates, drums,
or other packages in which commercial containers of controlled
substances are shipped, to document the flow of controlled substances
from the long distance conveyance through the freight forwarding
facility to the local conveyance or from long distance conveyance
directly to the local conveyance. These records must be traceable to a
particular registrant invoice. The type of records to be kept can be
designed by the individual registrant and must be kept for two years
and stored at the freight forwarding facility. All other controlled
substance recordkeeping requirements currently found in 21 CFR part
1304 are applicable. The freight forwarding facility will be exempt
from all inventory requirements and ARCOS reporting.
The Deputy Assistant Administrator, Office of Diversion Control, in
accordance with the Regulatory Flexibility Act (5 U.S.C. 605(b)), has
reviewed this proposed regulation and by approving it certifies that
this regulation will not have a significant economic impact on a
substantial number of small entities. This proposal provides an
alternative system that may allow some distributors a more efficient
means of delivering controlled substances. Indeed, the regulated
industry has represented that this procedure will benefit the industry
by allowing it to lower costs associated with shipping controlled
substances. Further, this regulation has been drafted and reviewed in
accordance with Executive Order 12866, Sec. 1(b), Principles of
Regulations. The Deputy Assistant Administrator, Office of Diversion
Control, has determined that this rule is not a ``significant
regulatory action'' under Executive Order 12866, section 3(f),
Regulatory Planning and Review, and accordingly this rule has not been
reviewed by the Office of Management and Budget. This regulation
provides an exemption from certain requirements of the CSA for
registrants operating freight forwarding facilities, thus allowing them
a more efficient and cost effective means of doing business.
This action has been analyzed in accordance with the principles and
criteria in Executive Order 12612 and it has been determined that the
proposed rule does not have sufficient federalism implications to
warrant the preparation of a Federalism Assessment.
List of Subjects
21 CFR Part 1301
Administrative practice and procedure, Drug traffic control,
Security measures.
21 CFR Part 1304
Drug traffic control, Reporting and recordkeeping requirements.
For reasons set out above, DEA is proposing to amend 21 CFR parts
1301 and 1304 as follows:
PART 1301--[AMENDED]
1. The authority citation for part 1301 continues to read as
follows:
Authority: 21 U.S.C. 821, 822, 823, 824, 871(b), 875, 877,
unless otherwise noted.
2. Section 1301.02 is proposed to be amended by redesignating
paragraph (m) as paragraph (n) and adding a new paragraph (m) to read
as follows:
Sec. 1301.02 Definitions.
* * * * *
(m) The term freight forwarding facility means a separate facility
operated by a DEA distributor registrant through which sealed, packaged
controlled substances, in unmarked shipping containers, are stored for
less than 24 hours while being routed to the ultimate DEA registrant
consignee. A freight forwarding facility is a controlled premises as
defined in Sec. 1316.02 (c). The term does not include a facility
through which controlled substance returners are processed.
* * * * *
3. Section 1301.23 is proposed to be amended by adding a new
paragraph (b)(4) to read as follows:
Sec. 1301.23 Separate registrations for separate locations.
* * * * *
(b) * * *
(4) A freight forwarding facility operated by the registrant
distributor through which the registered distributor transfers
controlled substances from long distance conveyances to local
conveyances, provided that the registrant has submitted written notice
by registered mail, return receipt requested, of intent to operate the
facility to the Administration's offices in the area in which the
distributor is registered and in the area in which the facility will be
located and that notice has been approved. Such notice shall detail the
location of the facility, the hours of operation, the individual(s)
responsible for the controlled substances, and the security and
recordkeeping procedures that will be employed. The notice will be
considered approved 21 days after receipt by the Administration
provided the registrant has not been otherwise notified in writing by
the Administration.
4. Section 1301.77 is proposed to be added under the undesignated
center
[[Page 66639]]
heading ``Security Requirements'' as follows:
Sec. 1301.77 Security controls for freight forwarding facilities.
(a) All Schedule II-V controlled substances that will be
temporarily stored/docked at the freight forwarding facility must be:
(1) Maintained under constant observation of the designated
responsible individual(s) in a segregated area; or
(2) Where controlled substances will not be under the constant
observation of the designated responsible individual(s), temporary
storage in a caged area which meets the requirements of
Sec. 1301.72(b), and is secured by an alarm system operated by the
registrant as specified in Sec. 1301.72 (b)(4)(v), is required.
(b) Access to controlled substances must be kept to a minimum
number of specifically authorized individuals.
(c) Only sealed, unmarked shipping containers will be permitted for
transfer or temporary storage at the freight forwarding facility.
PART 1304--[AMENDED]
1. The authority citation for part 1304 continues to read as
follows:
Authority: 21 U.S.C. 821, 827, 871(b), 958(d), 965, unless
otherwise noted.
2. Section 1304.03 is proposed to be amended by adding a new
paragraph (i) to read as follows:
Sec. 1304.03 Person required to keep records and file reports.
* * * * *
(i) A distributor registrant that utilizes a freight forwarding
facility shall maintain records reflecting the transfer of controlled
substances from the long distance conveyance, through the facility, to
the local conveyance or from the long distance conveyance directly to
the local conveyance. The records must contain the date, time of
transfer, number of cartons, crates, drums or other packages in which
commercial containers of controlled substances are shipped and
authorized signatures for each transfer. The records of these shipments
must be maintained at the facility for a period of two years.
Dated: December 6, 1996.
Gene R. Haislip,
Deputy Assistant Administrator, Office of Diversion Control.
[FR Doc. 96-32077 Filed 12-17-96; 8:45 am]
BILLING CODE 4410-09-M