[Federal Register Volume 62, Number 27 (Monday, February 10, 1997)]
[Rules and Regulations]
[Pages 5914-5917]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-3086]


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DEPARTMENT OF JUSTICE

Drug Enforcement Administration

21 CFR Parts 1309, 1310, and 1313

[DEA Number 154I]
RIN 1117-AA42


Comprehensive Methamphetamine Control Act of 1996; Possession of 
List I Chemicals, Definitions, Record Retention, and Temporary 
Exemption From Chemical Registration for Distributors of Combination 
Ephedrine Products

AGENCY: Drug Enforcement Administration (DEA), Justice.

ACTION: Interim rule with request for comments.

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SUMMARY: DEA is amending its regulations to incorporate certain 
amendments of the Controlled Substances Act (CSA) made by the 
Comprehensive Methamphetamine Control Act of 1996 (MCA) and to provide 
temporary exemption from registration for persons who distribute 
combination ephedrine drug products. The MCA amends the CSA with 
respect to: possession of listed chemicals following suspension or 
revocation of registration; the record retention requirements for List 
I chemical transactions; certain definitions; and establishes the 
requirement that, effective October 3, 1996, persons that distribute 
combination ephedrine products shall be subject to the chemical 
registration requirement. To avoid interruption in the legitimate 
distribution of combination ephedrine products, DEA is amending its 
regulations to provide certain temporary exemptions from the 
registration requirement pending promulgation of final regulations.

DATES: Effective February 10, 1997. Written comments or objections must 
be submitted on or before April 11, 1997.

ADDRESSES: Comments and objections should be submitted in quintuplicate 
to the Deputy Assistant Administrator, Office of Diversion Control, 
Drug Enforcement Administration, Washington, D.C. 20537, Attention: DEA 
Federal Register Representative/CCR.

FOR FURTHER INFORMATION CONTACT: G. Thomas Gitchel, Chief, Liaison and 
Policy Section, Office of Diversion Control, Drug Enforcement 
Administration, Washington, D.C. 20537, Telephone (202) 307-7297.

SUPPLEMENTARY INFORMATION: The Comprehensive Methamphetamine Control 
Act of 1996 was enacted on October 3, 1996. Among its provisions, the 
MCA contained revisions of the Controlled Substances Act (CSA) with 
respect to possession of listed chemicals following revocation or 
suspension of registration, the record retention requirements for 
transactions involving List I chemicals and tableting or encapsulating 
machines, and definitions, of ``regulated transaction'', ``retail 
distributor'', and ``combination ephedrine product''. To accommodate 
the amendments made by the MCA, DEA is making the following changes to 
Title 21, Code of Federal Regulations (CFR):

21 CFR 1309.43  Suspension or Revocation of Registration

    The MCA amends Section 404 of the CSA (21 U.S.C. 844) to make it 
unlawful for any person to knowingly or intentionally possess any list 
I chemical obtained under the authority of a registration or an 
exemption from registration granted by the Administrator by regulation, 
if that registration or exemption has been revoked or suspended. The 
revised language also makes it illegal to possess list I chemicals 
obtained under the authority of a registration or an exemption granted 
by regulation by the Administrator, if the registration has expired or 
if the registrant has ceased to do business as originally intended 
under that registration.
    To reflect the amendments in the law, DEA is revising 21 CFR 
1309.43, to include seizure and forfeiture instructions. Persons whose 
registrations or exemptions have been revoked or suspended shall be 
required, upon service of the notice of revocation or suspension, to 
surrender all List I

[[Page 5915]]

chemicals in their possession obtained under the authority of a 
registration or an exemption from registration granted by the 
Administrator by regulation, to the nearest office of the 
Administration or authorized agent of the Administration, or place such 
List I chemicals under seal as described in 21 U.S.C. 824(f). When the 
suspension or revocation is limited to certain chemicals, the 
registrant shall surrender those chemicals affected by the revocation 
or suspension as indicated above.

21 CFR 1309.02, 1310.01 & 1313.02  Definitions

    The definition of ``retail distributor'' found in Sec. 1309.02(f) 
has been amended by the MCA. As defined by the MCA, the term refers to 
persons, such as grocery stores, general merchandise stores, drug 
stores, etc., that engage in sales of pseudoephedrine, 
phenylpropanolamine, and combination ephedrine drug products almost 
exclusively to individuals for personal use in face-to-face 
transactions. The new definition will apply to all retail distributors 
of regulated drug products, including single entity ephedrine products.
    The MCA also amends the definition of ``regulated transaction'' to 
make all ephedrine products and certain drug products containing 
pseudoephedrine and phenylpropanolamine subject to regulation. However, 
because the provisions relating to pseudoephedrine and 
phenylpropanolamine products will not become effective until October 3, 
1997, the definition of ``regulated transaction'', as found in 21 CFR 
1310.01(f) and 1313.02(d), is being amended only with respect to 
ephedrine products at this time. The MCA also defines ``combination 
ephedrine product''; that definition, together with the appropriate 
guidelines clarifying the specific criteria established by the 
definition, has been added to Secs. 1309.02 and 1310.01.
    As a result of the amendment to the definition of ``regulated 
transaction'', persons who distribute, import, or export combination 
ephedrine products are now subject to the chemical registration, 
recordkeeping, and reporting requirements. As noted later in this 
document, DEA is establishing certain temporary exemptions from the 
registration requirement pending promulgation of regulations, subject 
to notice and comment, relating to the control of combination ephedrine 
products.

21 CFR 1310.02  Substances Covered and 21 CFR 1310.04  Maintenance of 
Records

    The MCA amends Section 802(34) of the CSA to correct the spelling 
of ``Isosafrole'' and ``hydriodic acid'' and Section 830(a) to modify 
the record retention period from the current 4 years to 2 years for all 
transactions involving a listed chemical or a tableting or 
encapsulating machine. The corresponding amendments are being made in 
the regulations. With respect to the change in the record retention 
period, the new language of the law does not distinguish between 
records created before and after the change in the retention 
requirement. Thus, effective October 3, 1996, a regulated person's 
records must only contain records of those regulated transactions that 
occurred within the past two years; records of transactions that are 
more than two years old are no longer required.

Temporary Exemptions From Registration Pending Promulgation, With 
Notice and Comment, of Regulations

    As noted earlier, combination ephedrine products became subject to 
the CSA's chemical registration, recordkeeping, and reporting 
provisions effective October 3, 1996. Under this new requirement, any 
person who distributes, imports, or exports combination ephedrine 
products must first obtain a DEA registration. Because implementation 
of this provision will require amendment to DEA's regulations, DEA is 
establishing temporary exemptions from the registration requirement for 
persons handling combination ephedrine products, to allow for 
continuation of legitimate commerce in the products. In addition, the 
existing exemptions from chemical registration for persons registered 
with DEA to handle controlled substances, which is contained in 21 CFR 
1309.25 and for distributors of prescription drug products, which is 
contained in 21 CFR 1309.28, are continued for combination ephedrine 
products.
    The first new exemption applies to retail distributors of 
combination ephedrine products. A single transaction limit of 24 grams 
has been established by the MCA for combination ephedrine products in 
retail distributions. Consistent with previous proposals regarding the 
regulation of retail distributions of drug products that contain List I 
chemicals, DEA is temporarily exempting retail distributors from the 
registration requirement. This interim rule is subject to public 
comment. Under this exemption, retail distributors will not be required 
to obtain a registration if they engage exclusively in distributions of 
combination ephedrine products below the 24 gram limit in a single 
transaction for legitimate medical use either directly to walk-in 
customers or in face-to-face transactions by direct sales. This 
exemption is set out in the new section 21 CFR 1309.29. Retail 
distributors that operate under this exemption are reminded that they 
will be subject to civil penalties for violations of the 24 gram single 
transaction limit, as set out in Section 401(f)(2) of the MCA.
    The second exemption applies to those persons (other than retail 
distributors, as described above, or persons subject to the existing 
exemptions regarding CSA registrants and prescription drug products) 
who are required to obtain a registration. Any such person who submits 
an application for registration for activities involving combination 
ephedrine products on or before May 12, 1997 will be exempt from the 
registration requirement for their lawful activities with combination 
ephedrine products until the Administration has taken final action with 
respect to that application. This exemption is set out in 21 CFR 
1310.09.
    DEA recognizes that, unlike the second exemption, which provides a 
general benefit to all affected persons, the first exemption is limited 
in its benefit. Therefore, while the regulatory changes in this interim 
rule take effect upon publication, the notice is open for public 
comment or objection until May 12, 1997. Further, the exemptions are 
temporary and may be subject to change, based on the comments or 
objections received.
    The Deputy Assistant Administrator for the Office of Diversion 
Control hereby certifies that this interim rulemaking will not have a 
significant economic impact upon a substantial number of entities whose 
interests must be considered under the Regulatory Flexibility Act, 5 
U.S.C. 601 et seq. This interim rulemaking is an administrative action 
to make the regulations consistent with the law and to avoid 
interruption of legitimate commerce by granting temporary exemptions 
from registration pending promulgation, through notice and comment, of 
the regulations necessary to implement the provisions of the MCA 
pertaining to combination ephedrine products. Further, since this is a 
temporary action which provides affected persons with a means to comply 
with the law pending promulgation of regulations implementing the MCA, 
this action is

[[Page 5916]]

not a significant regulatory action and therefore has not been reviewed 
by the Office of Management and Budget pursuant to Executive Order 
12866. Consideration of the significance and impact of the new 
requirements of the MCA will be addressed as part of a future proposed 
rulemaking by DEA proposing regulations to implement the MCA.
    This action has been analyzed in accordance with the principles and 
criteria in Executive Order 12612, and it has been determined that this 
interim rule does not have sufficient federalism implications to 
warrant the preparation of a Federalism Assessment.

List of Subjects

21 CFR Part 1309

    Administrative practice and procedure, Drug traffic control, List I 
and List II chemicals, Security measures.

21 CFR 1310

    Drug traffic control, List I and List II chemicals, Reporting and 
recordkeeping requirements.

21 CFR Part 1313

    Drug traffic control, Exports, Imports, list I and List II 
chemicals, Transshipment and in-transit shipments.

    For the reasons set out above, 21 CFR Parts 1309, 1310, and 1313 
are to be amended as follows:

PART 1309--REGISTRATION OF MANUFACTURERS, DISTRIBUTORS, IMPORTERS 
AND EXPORTERS OF LIST I CHEMICALS

    1. The authority citation for part 1309 continues to read as 
follows:

    Authority: 21 U.S.C. 821, 822, 823, 824, 830, 871(b), 875, 877, 
958.

    2. Section 1309.29 is added to read as follows:


Sec. 1309.29  Exemption of retail distributors of combination ephedrine 
drug products.

    The requirement of registration is waived for any retail 
distributor whose activities with respect to List I chemicals are 
restricted to the distribution of below-threshold quantities of a 
combination ephedrine drug product in a single transaction to an 
individual for legitimate medical use. The threshold for a distribution 
of a combination ephedrine drug product in a single transaction to an 
individual for legitimate medical use is 24 grams of ephedrine base.
    2. Section 1309.43 is amended by revising paragraph (d) and adding 
a new paragraph (e) to read as follows:


Sec. 1309.43  Suspension or revocation of registration.

* * * * *
    (d) Upon service of the order of the Administrator suspending or 
revoking registration, the registrant shall immediately deliver his or 
her Certificate of Registration to the nearest office of the 
Administration. Also, upon service of the order of the Administrator 
revoking or suspending registration, the registrant shall, as 
instructed by the Administrator:
    (1) Deliver all List I chemicals in his or her possession that were 
obtained under the authority of a registration or an exemption from 
registration granted by the Administrator by regulation, to the nearest 
office of the Administration or to authorized agents of the 
Administration; or
    (2) Place all such List I chemicals in his or her possession under 
seal as described in section 304(f) of the Act (21 U.S.C. 824(f)).
    (e) In the event that revocation or suspension is limited to a 
particular chemical or chemicals, the registrant shall be given a new 
Certificate of Registration for all substances not affected by such 
revocation or suspension; no fee shall be required for the new 
Certificate of Registration. The registrant shall deliver the old 
Certificate of Registration to the nearest office of the 
Administration. Also, upon service of the order of the Administrator 
revoking or suspending registration with respect to a particular 
chemical or chemicals, the registrant shall, as instructed by the 
Administrator:
    (1) Deliver to the nearest office of the Administration or to 
authorized agents of the Administration all of the particular chemical 
or chemicals in his or her possession that were obtained under the 
authority of a registration or an exemption from registration granted 
by the Administrator by regulation, which are affected by the 
revocation or suspension; or
    (2) Place all of such chemicals under seal as described in section 
304(f) of the Act (21 U.S.C. 824(f)).
    3. Section 1309.44 is amended by revising paragraph (b) to read as 
follows:


Sec. 1309.44  Suspension of registration pending final order.

* * * * *
    (b) Upon service of the order of immediate suspension, the 
registrant shall promptly return his Certificate of Registration to the 
nearest office of the Administration. Also, upon service of the order 
of immediate suspension, the registrant shall, as instructed by the 
Administrator:
    (1) Deliver to the nearest office of the Administration or to 
authorized agents of the Administration all of the particular chemical 
or chemicals in his or her possession that were obtained under the 
authority of a registration or an exemption from registration granted 
by the Administrator by regulation, which are affected by the 
revocation or suspension; or
    (2) Place all of such chemicals under seal as described in section 
304(f) of the Act (21 U.S.C. 824(f)).
* * * * *
    4. Section 1309.62 is to be amended by revising the existing text 
and redesignating it as paragraph (a) and adding a new paragraph (b) to 
read as follows:


Sec. 1309.62  Termination of registration.

    (a) The registration of any person shall terminate if and when such 
person dies, ceases legal existence, or discontinues business or 
professional practice. Any registrant who cases legal existence or 
discontinues business or professional practice shall promptly notify 
the Special Agent in Charge of the Administration in the area in which 
the person is located of such fact and seek authority and instructions 
to dispose of any List I chemicals obtained under the authority of that 
registration.
    (b) The Special Agent in Charge shall authorize and instruct the 
person to dispose of the List I chemical in one of the following 
manners:
    (1) By transfer to person registered under the Act and authorized 
to possess the substances;
    (2) By delivery to an agent of the Administration or to the nearest 
office of the Administration;
    (3) By such other means as the Special Agent in Charge may 
determine to assure that the substance does not become available to 
unauthorized persons.

PART 1310--RECORDS AND REPORTS OF LISTED CHEMICALS AND CERTAIN 
MACHINES

    1. The authority citation for part 1310 continues to read as 
follows:

    Authority: 21 U.S.C. 802, 830, 871(b).

    2. Section 1310.01 is amended by revising paragraphs (f)(1)(iv)(A) 
and (B) redesignating paragraphs (g) through (l) as paragraphs (h) 
through (m), redesignating paragraph (m) as paragraph (o), and adding 
new paragraphs (g) and (n) to read as follows:


Sec. 1310.01  Definitions.

* * * * *
    (f) * * *
    (1) * * *

[[Page 5917]]

    (iv) * * *
    (A) (1) the drug contains ephedrine or its salts, optical isomers, 
or salts of optical isomers; or
    (2) The Administrator has determined pursuant to the criteria in 
1310.10 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
    (B) The quantity of ephedrine or other listed chemical contained in 
the drug included in the transaction or multiple transactions equals or 
exceeds the threshold established for that chemical.
* * * * *
    (g) The term combination ephedrine product means a drug product 
containing ephedrine or its salts, optical isomers, or salts of optical 
isomers and therapeutically significant quantities of another active 
medicinal ingredient. The term ``therapeutically significant 
quantities'' shall apply if the product formulation (i.e., the 
qualitative and quantitative composition of active ingredients within 
the product) is listed in American Pharmaceutical Association (APHA) 
Handbook of NonPrescription Drugs; Drug Facts and Comparisons 
(published by Wolters Kluwer Company); or USP DI (published by 
authority of the United States Pharmacopeial Convention, Inc.); or the 
product is listed in Sec. 1310.15 as an exempt drug product. For drug 
products having formulations not found in the above compendiums, the 
Administrator shall determine, pursuant to a written request as 
specified in Sec. 1310.14 whether the active medicinal ingredients are 
present in quantities considered therapeutically significant for 
purposes of this paragraph.
* * * * *
    (n) The term retail distributor means a grocery store, general 
merchandise store, drug store, or other entity or person whose 
activities as a distributor relating to drug products containing 
pseudeophedrine, phenylpropanolamine, or ephedrine are limited almost 
exclusively to sales for personal use, both in number of sales and 
volume of sales, either directly to walk-in customers or in face-to-
face transactions by direct sales. For the purposes of this paragraph, 
sale for personal use means the distribution of below-threshold 
quantities in a single transaction to an individual for legitimate 
medical use. Also for the purposes of this paragraph, a grocery store 
is an entity within Standard Industrial Classification (SIC) code 5411, 
a general merchandise store is an entity within SIC codes 5300 through 
5399 and 5499, and a drug store is an entity within SIC code 5912.
* * * * *
    3. Section 1310.02 is amended by revising paragraphs (a)(16) and 
(a)(21) to read as follows:


Sec. 1310.02  Substances covered.

* * * * *
    (a) * * *

(16) Isosafrole..................................................   8704
                                                                        
                  *        *        *        *        *                 
(21) Hydriodic Acid..............................................   6695
                                                                        
                  *        *        *        *        *                 
                                                                        

    4. Section 1310.04 is amended by revising paragraph (a) to read as 
follows:


Sec. 1310.04  Maintenance of records.

    (a) Every record required to be kept subject to Sec. 1310.03 for a 
List I chemical, a tableting machine, or an encapsulating machine shall 
be kept by the regulated person for two years after the date of the 
transaction.
* * * * *
    5. Section 1310.09 is revised to read as follows:


Sec. 1310.09  Temporary exemption from registration.

    Each person required by section 302 of the Act (21 U.S.C. 822) to 
obtain a registration to distribute, import, or export an combination 
ephedrine product is temporarily exempted from the registration 
requirement, provided that the person submits a proper application for 
registration on or before May 12, 1997. The exemption will remain in 
effect for each person who has made such application until the 
Administration has approved or denied that application. This exemption 
applies only to registration; all other chemical control requirements 
set forth in parts 1309, 1310, and 1313 of this chapter remain in full 
force and effect.

PART 1313--IMPORTATION AND EXPORTATION OF PRECURSORS AND ESSENTIAL 
CHEMICALS

    1. The authority citation for part 1313 continues to read as 
follows:

    Authority: 21 U.S.C. 802, 830, 871(b), 971.

    2. Section 1313.02 is amended by revising paragraphs (d)(1)(iv)(A) 
and (B), to read as follows:


Sec. 1313.02  Definitions.

* * * * *
    (d) * * *
    (1) * * *
    (iv) * * *
    (A)(1) the drug contains ephedrine or its salts, optical isomers, 
or salts of optical isomers; or
    (2) The Administrator has determined pursuant to the criteria in 
1310.10 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
    (B) The quantity of ephedrine or other listed chemical contained in 
the drug included in the transaction or multiple transactions equals or 
exceeds the threshold established for that chemical.
* * * * *
    Dated: January 28, 1997.
Gene R. Haislip,
Deputy Assistant Administrator, Office of Diversion Control.
[FR Doc. 97-3086 Filed 2-7-97; 8:45 am]
BILLING CODE 4410-09-M