[Federal Register Volume 65, Number 149 (Wednesday, August 2, 2000)]
[Rules and Regulations]
[Pages 47309-47316]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-19289]


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DEPARTMENT OF JUSTICE

Drug Enforcement Administration

21 CFR Part 1310

[DEA-156F]
RIN # 1117-AA43


Listed Chemicals; Final Establishment of Thresholds for Iodine 
and Hydrochloric Gas (Anhydrous Hydrogen Chloride)

AGENCY: Drug Enforcement Administration (DEA), Justice.

ACTION:  Final Rule with request for comment.

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SUMMARY: Effective October 3, 1996, the Comprehensive Methamphetamine 
Control Act of 1996 (MCA) established that iodine is a List II 
chemical; however, it was not made subject to import/export regulatory 
controls. While exports of the listed chemical hydrochloric acid 
(including anhydrous hydrogen chloride, referred to in the MCA as 
hydrochloric gas, which is a form of hydrogen chloride) were already 
regulated pursuant to 21 CFR 1310, the MCA had the practical effect of 
directing the DEA to place domestic controls on anhydrous hydrogen 
chloride. Since no domestic thresholds for iodine or anhydrous hydrogen 
chloride have been established prior to this Final Rule, all domestic 
transactions involving such chemicals have been subject to 
recordkeeping and reporting requirements under the Controlled 
Substances Act since October 3, 1996.
    This rule establishes a domestic threshold of zero (0.0 kilograms) 
for anhydrous hydrogen chloride, and a domestic threshold of 0.4 
kilograms for iodine. Import and export transactions in anhydrous 
chloride are unaffected by this rule. Iodine transactions involving 
amounts below the threshold will not be subject to recordkeeping and 
reporting requirements except for reporting of any unusual or excessive 
loss or disappearance as required by 21 U.S.C. 830(b)(1)(C).
    Although the threshold for anhydrous hydrogen chloride is 
established at 0.0 kilogram, DEA has concluded that certain 
transactions in anhydrous hydrogen chloride are not sources for

[[Page 47310]]

diversion. This rule also provides exemption from the recordkeeping and 
reporting requirements for both transactions involving pipeline 
distributions and distributions of 12,000 pounds (net weight) or more 
in a single container. Because these exemptions were not discussed in 
the Notice of Proposed Rulemaking published in September 30, 1997, DEA 
requests public comment with respect to the exemption for these two 
types of transactions involving anhydrous hydrogen chloride.
    This rule reinserts the table in 21 CFR 1310.04(f)(2)(iv), listing 
thresholds for exports, transshipments, and international transactions 
to designated countries set forth in 21 CFR 1310.08(b). This table was 
inadvertently omitted from the DEA's final rule regarding 
implementation of the Domestic Chemical Diversion Control Act of 1993, 
published on June 22, 1995 (60 FR 32447). Finally, this final rule 
assigns the DEA chemical code number of 6699 for iodine.

DATES: This final rule is effective September 1, 2000, except that 
Sec. 1310.08(h) and (i) are effective [insert date of publication]. 
Comments on Sec. 1310.08(h) and (i) should be submitted by September 1, 
2000.

ADDRESSES: Comments and objections should be submitted in triplicate 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: Frank Sapienza, Chief, Drug and 
Chemical Evaluation Section, Office of Diversion Control, Drug 
Enforcement Administration, Washington, D.C. 20537, Telephone (202) 
307-7183.

SUPPLEMENTARY INFORMATION:

1. Background

a. Effect of the Comprehensive Methamphetamine Control Act on Iodine 
and Anhydrous Hydrogen Chloride

    Section 204 of The Comprehensive Methamphetamine Control Act of 
1996 (MCA), which became effective on October 3, 1996, amended the 
definition of ``List II chemicals'' in Section 102(35) of the 
Controlled Substances Act (CSA) (21 U.S.C. 802(35)) to include iodide 
as a List II chemical. The MCA, however, did not control salts of 
iodine (e.g., potassium iodide or sodium iodide).
    The listed chemical iodine is currently available as crystals, 
tinctures, and formulations (e.g., povidone-iodine and polozamer-iodine 
complexes). Under this rule, only transactions involving at least 0.4 
kg of iodine crystals will be subject to regulatory controls. Since 
iodine tinctures and formulations are considered chemical mixtures, 
transactions in these materials are not currently regulated and are not 
affected by this rule. However, DEA is conducting a separate rulemaking 
to develop regulations governing the distribution of any chemical 
mixtures that contain a listed chemical (63 FR 49506). As such, some 
chemical mixtures may soon be subject to recordkeeping and other 
chemical regulatory control provisions of the CSA.
    This rule also relates to the chemical described in the MCA as 
``hydrochloric gas.'' This term refers to the chemical hydrogen 
chloride that is free of water. The DEA has adopted the term 
``anhydrous hydrogen chloride,'' which is the term used most commonly 
by the industrial and scientific communities to describe this chemical. 
Prior to passage of the MCA, hydrochloric acid was included as a listed 
chemical by regulation. The anhydrous form of hydrochloric acid, 
anhydrous hydrogen chloride, is a regulated form of hydrochloric acid 
(57 FR 43614). Prior to the MCA, domestic transactions in hydrochloric 
acid, including anhydrous hydrogen chloride, were excluded from the 
definition of ``regulated transaction'' (21 CFR 1310.08(a)). However, 
the MCA provides that domestic transactions in the anhydrous hydrogen 
chloride form of hydrochloric acid are regulated transactions, and 
subject to the recordkeeping and reporting requirements of 21 CFR 1310. 
This change does not affect other forms of hydrochloric acid.

b. Thresholds Used to Define Regulated Transaction

    Not all transactions involving a listed chemical are necessarily 
regulated. For purposes of defining a regulated transaction (21 U.S.C. 
802(39)), the CSA provides that the Attorney General may establish a 
threshold amount for each listed chemical. A threshold amount is 
established to determine whether a receipt, sale, importation or 
exportation within a calendar month or cumulative transactions by an 
individual within a calendar month are considered regulated 
transactions. Unless the Attorney General sets a threshold, the 
threshold is considered to be zero; this has been the case of iodine 
and anhydrous hydrogen chloride since passage of the MCA on October 3, 
1996.
    When an amount of listed chemical distributed to any ``person'' in 
a calendar month is equal to or greater than the threshold, the 
transaction is a regulated transaction. Thereafter, all transactions 
within the calendar month to those persons involving the listed 
chemical are regulated transactions. If the transaction is considered a 
regulated transaction, recordkeeping and reporting requirements as 
specified in 21 CFR Part 1310 apply. A ``person'' is defined in 21 CFR 
1300.02(21) as ``any individual, corporation, government or 
governmental subdivision or agency, business trust, partnership, 
association, or other legal entity.'' This includes any consumer who 
takes possession of a product, even as a free sample.

c. Notice of Proposed Rulemaking and the Comment Period

    Prior to this Rule, thresholds had not been established for iodine 
or anhydrous hydrogen chloride. Therefore, all domestic distributions 
involving these chemicals became regulated effective October 3, 1996. 
In order to establish thresholds, the DEA published a notice of 
proposed rulemaking on September 30, 1997, (62 FR 51072) that proposed 
domestic thresholds for anhydrous hydrogen chloride and iodine of 0.0 
kilograms and 0.4 kilograms, respectively. Interested persons were 
invited to comment.
    The proposed domestic threshold of anhydrous hydrogen chloride is 
based on several factors: Nature of its legitimate use in industry; 
quantities used by legitimate industry; and quantities of anhydrous 
hydrogen chloride seized at clandestine laboratories. DEA learned that 
most transactions of anhydrous hydrogen chloride involve thousands of 
pounds, whereas clandestine laboratories use containers holding 
quantities as small as 0.5 pounds. Since the majority of anhydrous 
hydrogen chloride transactions involved large quantities, and to ensure 
the most effective controls on the diversion of this chemical, the DEA 
proposed a domestic threshold of 0.0 kilograms.
    The comment period lasted for 60 days after publication of the 
proposed rule in the Federal Register. Interested persons who might be 
affected by the proposed thresholds responded. The DEA considered each 
of the seven comments received as well as the concerns of law 
enforcement and the provisions of the MCA.

2. Comments

a. Comments Related To the Iodine Threshold

    A total of seven comments were received with two of the seven 
comments referring to iodine. One

[[Page 47311]]

requested that the threshold be raised from 0.4 kilograms to 3 
kilograms. The other comment encouraged DEA to take into account 
recognized industrial standards for iodine distribution and to reduce 
the reporting burden for all legitimate suppliers and consumers of 
iodine. The standard for iodine distribution refers to the iodine 
package size used in distributions.

b. Anhydrous Hydrogen Chloride Threshold

    All seven comments mentioned anhydrous hydrogen chloride. These 
comments mostly requested clarification while one requested that the 
threshold be set at 5 pounds. The comments also included a description 
of types of transactions in anhydrous hydrogen chloride that the 
commenters stated should not be subject to regulation.

c. Exemption Request for Some Transactions in Anhydrous Hydrogen 
Chloride

    Three comments described transactions involving very large amounts 
of anhydrous hydrogen chloride. These transactions involve a special 
form of anhydrous hydrogen chloride referred to as refrigerated liquid. 
The material is distributed via large tank trucks, tank cars or by 
pipeline. The DEA agrees that these transactions should not be subject 
to regulation. However, the Notice of Proposed Rulemaking did not 
propose that these methods of distribution be exempted from regulation. 
Therefore, the DEA will exempt these forms of transactions via this 
notice as an interim final rule. The rule will be in effect upon 
publication but the DEA will allow for a comment period.
    This final rule will: (1) Establish the iodine threshold, (2) 
establish the anhydrous hydrogen chloride thresholds, and (3) serve as 
an interim rule that exempts certain transactions in anhydrous hydrogen 
chloride. Due to the complexity of this final rule, it will be broken 
into three parts.

Part I  Iodine

a. Iodine Is a Listed Chemical Under the MCA
    The majority of clandestine laboratory seizures in the United 
States are those manufacturing methamphetamine, a Schedule II 
controlled substance. From 1993 through calendar year 1998, the DEA has 
participated in more than 4,740 methamphetamine laboratory seizures in 
the United States. This number does not include thousands of additional 
methamphetamine laboratory seizures by state and local authorities.
    Clandestine laboratory operators most frequently use the ephedrine/
pseudoephedrine reduction method to synthesize methamphetamine. This 
method utilizes hydriodic acid, which is a List I chemical with a 
domestic threshold of one liter. Because of increased controls on 
hydriodic acid, clandestine laboratory operators are resorting to 
producing their own hydriodic acid. They produce hydriodic acid from 
iodine, either in a separate step or by using iodine directly in the 
synthesis of methamphetamine.
b. Legal Uses for Iodine
    Iodine is used largely in the form of a complex, salt, or as part 
of some chemical, that contains iodine. Iodine may be found dissolved 
in some disinfectants. Iodine does not dissolve well in water and so 
needs to be bound to a stabilizer or in some way converted to a water 
stable form to be used in disinfectants. Iodine crystals have very 
limited direct use and are mostly restricted to laboratory settings.
    The major end uses of iodine are in catalysts, stabilizers and 
animal feeds. DEA has identified that farriers use iodine crystals. It 
can be purchased from either veterinary supply stores, feed and tack/
farm supply stores or chemical distributors.
c. Determining the Iodine Threshold
    The reasons cited in the proposed rule for the 0.4 kilogram 
threshold included legitimate use in industry, including quantities 
normally required for such uses; quantities purchased by clandestine 
laboratory operators; quantities seized at clandestine laboratory 
sites; and iodine's use in the production of methamphetamine. The 
majority of clandestine laboratories that produce methamphetamine do so 
in less than one-half kilogram quantities. The DEA cannot determine the 
source of all of the iodine seized at the clandestine laboratories due 
to operators removing the original labels or transferring the iodine to 
other unmarked containers. At those sites where iodine was seized in 
its original containers, DEA identified that the iodine was being 
purchased from either veterinary supply stores, feed and tack/farm 
supply stores or chemical distributors. The DEA has determined that a 
2-ounce bottle of iodine would last a rancher or a farrier several 
months and that, typically, an individual would purchase at the most 
three 2-ounce bottles (approximately 0.2 kilograms).
    Based on the above information, the DEA proposed a domestic 
threshold of 0.4 kilograms for iodine. This would subject transactions 
of 1 pound package size or larger to recordkeeping requirements and 
would ensure the most effective controls on the diversion of iodine 
while minimizing the impact on industry, particularly for small 
businesses such as veterinary, feed, and farm supply stores.
d. Comments Pertaining to the Iodine Threshold
    One comment suggested that the threshold be raised to 3 kilograms 
for iodine. The perceived substantial burden that the threshold will 
place on certain retailers, namely those associated with supplying the 
research community, is cited as the reason for this suggested 
threshold. The DEA believes that implementing a 3 kilogram threshold 
for iodine would allow current diversion of this chemical to continue 
mostly unabated. The DEA has queried suppliers of iodine to walk-in 
customers regarding the amounts of iodine that these customers would 
reasonably require for legitimate purposes and found that a 2 ounce 
bottle (approximately 60 grams) would last a typical purchaser several 
months. Additionally, the DEA has evidence that indicates that iodine 
is diverted for use at illicit methamphetamine laboratories often in 
one pound sizes. The DEA is aware that many legitimate distributors 
devote a good deal of effort the prevent their products from being sold 
to traffickers. However, some distributors sell to the general public 
under the pretense that the chemicals are to be used solely for 
research purposes without regard to how these chemicals are actually 
used. Based on these findings, the DEA concluded that the 0.4 kilogram 
threshold for iodine would impact traffickers while minimizing the 
burden upon legitimate industry.
    DEA estimates that approximately 75 grams (0.17 pounds) of 
methamphetamine can be produced from 0.4 kilograms of iodine that has 
been converted into hydriodic acid. Approximately 563 grams (over 1 
pound) of methamphetamine can be produced from 3 kilograms of iodine 
converted by hydriodic acid. The amount of 0.4 kilograms is twice the 
amount identified as the normal quantity range sold in legitimate face-
to-face transactions. These factors contribute to setting the threshold 
at 0.4 kilograms.
    It should be noted that to help lessen the burden of recordkeeping, 
21 CFR 1310.06(b) provides that normal business records shall be 
considered adequate, provided they contain information described in 21 
CFR 1310.06(a) and are readily retrievable from other business records. 
These

[[Page 47312]]

records can be those already required by other federal, state and local 
regulatory agencies.
e. Conclusion
    DEA has determined that increasing the iodine threshold from 0.4 to 
3 kilograms will not be sufficient to prevent diversion of iodine for 
illegitimate reasons. Therefore, the threshold for iodine will be set 
at 0.4 kilograms.

Part II  Anhydrous Hydrogen Chloride Threashold

1. Background

a. What Is Anhydrous Hydrogen Chloride?
    The statutory term ``hydrochloric gas'' is a form of hydrogen 
chloride more properly called anhydrous hydrogen chloride. Anhydrous 
hydrogen chloride is hydrogen chloride that is free from water. When in 
the form of a gas it is free of water. At ambient temperature and 
normal atmospheric pressure, anhydrous hydrogen chloride exists as a 
gas. Therefore, sometime anhydrous hydrogen chloride is referred to as 
hydrogen chloride gas or hydrochloric gas.
    When the atmospheric pressure is increased and/or the temperature 
is decreased, anhydrous hydrogen chloride can change from a gas to a 
liquid. This is sometime referred to as refrigerated hydrogen chloride. 
Refrigerated hydrogen chloride is the same as anhydrous hydrogen 
chloride even though the physical state has been changed from a gas to 
a liquid.
    Anhydrous hydrogen chloride is often dissolved in water. When 
dissolved it is usually referred to as hydrochloric acid. A commercial 
name for hydrochloric acid is muriatic acid. Because it is mixed with 
water, the term anhydrous cannot be used.
b. Past and Current Regulation of Anhydrous Hydrogen Chloride

Was Anhydrous Hydrogen Chloride a List II Chemical Prior to the MCA?

    Yes. Prior to the MCA, by regulation, all forms of hydrochloric 
acid, which included anhydrous hydrogen chloride, were a list II 
chemical (21 CFR 1310.02(b)(8)). However, all domestic and import 
transactions of hydrochloric acid were excluded from the definition of 
``regulated transaction'' (21 CFR 1310.08(a)). In addition, by 
regulation, all exports, transshipments and international transactions 
of anhydrous hydrogen chloride, except those to all South American 
countries and Panama above a threshold of 27 kilograms, had similarly 
been excluded from the definition of ``regulated transaction'' (21 CFR 
1310.08(b)). This may have given the appearance that anhydrous hydrogen 
chloride was a non-regulated form of the chemical. Prior to enactment 
of the MCA, only exports to all South American countries and Panama 
above a threshold of 27 kilograms had been regulated transactions (21 
CFR 1310.08(b)).

How Does the MCA Affect Transactions of Anhydrous Hydrogen Chloride?

    The CSA amendment by the MCA had the practical effect of directing 
DEA to place domestic controls on anhydrous hydrogen chloride. As a 
result, domestic transactions and the already controlled exports, 
transshipments and international transactions of anhydrous hydrogen 
chloride to designated countries are regulated transactions. These 
designated countries are listed in 21 CFR 1310.08(b).

How Is Hydrochloric Acid Affected by This New Regulation?

    Hydrochloric acid, that is, hydrogen chloride dissolved in water, 
is not affected by these regulations. Domestic and import transactions 
involving that form of the chemical are not regulated transactions. 
Only export transactions of threshold amounts to those countries 
designated in 21 CFR 1310.08(b) are regulated transactions.
C. Uses for Anhydrous Hydrogen Chloride
    i. Legal uses. According to information gathered by the DEA, the 
major legitimate uses of anhydrous hydrogen chloride are in the cotton 
industry, the electronic/silicon industry, the pharmaceutical industry 
and other industries for use in chemical syntheses. All of those 
industries use large quantities of anhydrous hydrogen chloride for 
their manufacturing processes. Generally, thousands of pounds are 
involved in a single transaction with the exception of smaller 
quantities (i.e., single or multiple cylinders) being used by research, 
analytical or synthetic laboratories.
    ii. Illicit uses. Anhydrous hydrogen chloride can be used to 
convert an illicitly produced controlled substance from the ``base'' 
form to the ``salt'' form. These two forms have different physical 
characteristics. It is the salt form that is typically sold and used by 
individuals for abuse purposes.
    Hydrochloric acid can also be used to isolate the base by forming 
the salt. However, using hydrochloric acid is not as easy as using 
anhydrous hydrogen chloride and requires the proper solvents and 
laboratory technique. Hydrochloric acid has advantages in the illicit 
processing of cocaine and heroin. Anhydrous hydrogen chloride is the 
preferred chemical for the manufacture of methamphetamine into a usable 
form.

2. Comments for Anhydrous Hydrogen Chloride

    Seven responses were received; two responses came from membership 
organizations. All seven comments requested clarifications or 
exemptions for specific types of transactions. One comment requested 
that the threshold be raised to 5 pounds. The DEA has carefully 
reviewed and considered the comments received in response to the Notice 
of Proposed Rulemaking. These will be discussed below.
a. Clarification as to the Form of Hydrogen Chloride Being Addressed in 
This Rulemaking
    Five comments requested that the DEA clarify what is meant by 
hydrochloric gas. In response, DEA notes that the chemical being 
addressed in this rulemaking is the form of hydrochloric acid that is 
free of water. This substance is anhydrous hydrochloric acid or 
anhydrous hydrogen chloride. The DEA has responded to these concerns by 
revising 21 CFR 1310.02 and 1310.04 to include the term ``anhydrous 
hydrogen chloride,'' thereby specifying the form of the chemical for 
which domestic transactions are regulated.
    Two comments stated that the designations (e.g., UN 1050, UN 1789 
and UN 2186) used by the United Nations (UN) should be adopted to 
identify the different forms of the acid. The DEA agrees that this is 
an efficient means to identify the acid for industrial commerce. 
However, the introduction of these numbers into the CFR would not be 
advantageous. DEA believes that introducing new designations to the CFR 
may cause confusion and imply that a new chemical has been placed in 
list II.
    Anhydrous forms of hydrochloric acid being addressed in this 
rulemaking are anhydrous hydrogen chloride (designated as UN 1050; 
Anhydrous gas) and refrigerated anhydrous hydrogen chloride (designated 
as UN 2186; anhydrous refrigerated liquid). These forms of hydrochloric 
acid are free from water and thus included as anhydrous hydrogen 
chloride. The form that is dissolved in water is hydrochloric acid 
(designated as UN 1789) which has been addressed under a separate 
rulemaking published on September 22, 1992, (57 FR 43614). That final 
rule identifies

[[Page 47313]]

anhydrous hydrogen chloride as a form of hydrochloric acid regulated 
under the chemical designation of hydrochloric acid (DEA chemical code 
number 6545).
    The DEA does not treat the different forms of hydrogen chloride as 
separate listed chemicals with distinct DEA chemical code numbers (57 
FR 43614). Certain transactions in hydrochloric acid, including 
domestic distributions, have been exempt from the recordkeeping and 
reporting requirements (21 CFR 1310.08(a)(b)). The MCA directed DEA to 
impose controls on domestic transactions of the anhydrous form of 
hydrochloric acid but not the form dissolved in water. However, no new 
chemical is being addressed. The use of UN numbers in the CFR may imply 
that new chemicals are being added to the list of regulated chemicals.
    Introducing the UN numbers to the regulatory language would create 
additional problems. Reference to each form of the chemical will need 
to be made via UN numbers everywhere the chemical is mentioned. Because 
UN numbers may not be understood by all who use the CFR, it may cause 
confusion. The DEA would need to define the UN numbers in the CFR to 
make use of them.
b. Clarification of the Forms of Hydrochloric Acid in 21 CFR 1310.02(b)
    Two comments raised the issue of including anhydrous hydrogen 
chloride in 21 CFR 1310.02(b)(8), which lists hydrochloric acid. The 
comments noted that if the different forms are named in the same 
subsection, then any time a reference in the regulation mentions 
hydrochloric acid, it also should include anhydrous hydrogen chloride. 
It was suggested that these different forms be listed separately in 
List II. The DEA concluded that this might imply that a new substance 
is being placed on the list. All forms of hydrogen chloride, as 
finalized in 57 FR 43614, are List II chemicals and currently regulated 
in 21 CFR 1310.02(b). To clarify, 21 CFR 1310.02(b)(8) will be modified 
to read: ``Hydrochloric acid (including anhydrous hydrogen chloride).''
    The comments raised the fact that DEA needs to clarify when a 
specific form of hydrogen chloride is referred to in the regulations. 
The appropriate sections of 21 CFR (e.g., 1310.04 and 1310.08) will be 
modified accordingly to reflect this clarification. The new paragraph 
(I) in 21 CFR 1310.04(f)(2)(ii) will then be added to read ``Anhydrous 
hydrogen chloride.'' 21 CFR 1310.04(f)(2)(iv)(A)(1) will read 
``Anhydrous hydrogen chloride.'' 21 CFR 1310.08(a) will be amended to 
read ``Domestic and import transactions of hydrochloric and sulfuric 
acids but not including anhydrous hydrogen chloride.'' 21 CFR 
1310.08(b) will be amended by inserting after ``hydrochloric'' the 
phrase ``(including anhydrous hydrogen chloride)''.
c. Threshold for Anhydrous Hydrogen Chloride
    One comment suggested that the threshold for anhydrous hydrogen 
chloride be raised to 5 pounds. Many clandestine operations can be 
successfully carried out with 5 pounds or less of anhydrous hydrogen 
chloride. While most anhydrous hydrogen chloride containers seized at 
clandestine laboratories are 65 pounds and less, the DEA has identified 
small bottles containing 0.5 pounds of anhydrous hydrogen chloride at 
methamphetamine laboratories. The zero threshold for anhydrous hydrogen 
chloride has been chosen to prevent the diversion of smaller canisters, 
as small as 0.5 pounds, for use in illegal drug production.
    As stated, the DEA is aware that legitimate chemical distributors 
understand the growing problem of diversion and act responsibly to 
prevent their products from being used for illicit purposes. However, 
some distributors sell products used for the production of illegal 
substances under the pretense that they are for research purposes only 
without regard for how the products will actually be used. Raising the 
threshold to 5 pounds would allow unscrupulous suppliers to sell almost 
without regard for the regulatory process. DEA determined that 
clandestine laboratories would be supplied with desired chemical if the 
threshold were raised to 5 pounds. Therefore, the threshold will be set 
at 0.0 kilograms.
d. Transactions Involving Residual Amounts of Anhydrous Hydrogen 
Chloride
    One comment stated that undue burden would be placed upon industry 
if controls of anhydrous hydrogen chloride were to include all 
containers and physical states. The person stated that regardless of 
the physical state, all containers would have the gas phase in the 
container headspace. The headspace refers to the empty space above the 
solution within a container. When anhydrous hydrogen chloride is 
dissolved in water to form a solution of hydrochloric acid, a small 
amount of the hydrogen chloride gas will form in the headspace above 
the solution. Because of the zero threshold, the comment requests 
clarification for treatment of the small amount of gas that naturally 
forms in any container holding a solution of hydrochloric acid.
    DEA would like to clarify that residual anhydrous hydrogen chloride 
contained in the head space of containers holding a solution of 
hydrochloric acid will not cause an otherwise non-regulated transaction 
to be regulated. The chemical being marketed as hydrochloric acid 
solution is distinctly different than that marketed as anhydrous 
hydrogen chloride. The natural formation of hydrogen chloride gas above 
the solution, along with water vapor, does not constitute the formation 
of anhydrous hydrogen chloride for purposes of this regulation.
    The comment also stated that it is not clear from the proposed rule 
that the domestic regulatory controls would not apply to the 
inadvertent anhydrous hydrogen chloride present in container headspace 
of containers of anhydrous hydrogen chloride. The comment is referring 
to small amounts of anhydrous hydrogen chloride that remain inside a 
container of anhydrous hydrogen chloride because it is impossible to 
empty the container completely.
    The DEA realizes that a container deemed empty may have residual 
anhydrous hydrogen chloride present. The purchaser frequently retains 
these containers until the hydrogen chloride is used and then the 
container is returned to the distributor. The DEA does not consider 
transactions involving depleted containers that held anhydrous hydrogen 
chloride to be regulated transactions just because a residual amount of 
anhydrous hydrogen chloride is present.
e. Anhydrous Hydrogen Chloride and the Surveillance List
    A comment suggested that small quantities of anhydrous hydrogen 
chloride be include in the DEA Special Surveillance List in lieu of 
adopting a zero threshold for this chemical. Section 205 of the MCA 
requires that DEA establish a Special Surveillance List of laboratory 
supplies. This was established on May 13, 1999 (62 FR 25910). The MCA 
provides for a civil penalty for distribution of a laboratory supply 
made with reckless disregard to a person who uses, or attempts to use 
the laboratory supply in the manufacturing of a controlled substance. 
The term ``laboratory supply'' is defined to include listed chemicals. 
Therefore, listed chemicals are already included on the surveillance 
list.
    The Special Surveillance List is an added means to help prevent the 
diversion of both listed and other

[[Page 47314]]

designated chemicals and equipment that can be used in clandestine 
synthesis of controlled substances. The surveillance list is not a 
substitute for regulatory controls on regulated transactions of 
anhydrous hydrogen chloride, a List II chemical. It does not impose 
recordkeeping, reporting or registration requirements as do regulations 
associated with listed chemicals.
f. Synthetic Alternative to Anhydrous Hydrogen Chloride
    A comment pointed out that the regulation of anhydrous hydrogen 
chloride might be a futile attempt at controlling the use of anhydrous 
hydrogen chloride in the illegal production of controlled substances. 
Clandestine operators may form their own anhydrous hydrogen chloride by 
using a method simple enough for such operations.
    DEA acknowledges that hydrogen chloride can be manufactured 
clandestinely. However, commercially produced anhydrous hydrogen 
chloride is commonly found at seized clandestine laboratories. The 
control of such chemicals is a valuable tool in denying traffickers a 
ready supply of anhydrous hydrogen chloride. This is why Congress 
included such control provisions in the MCA.
g. Impact of This Rule on the Anhydrous Hydrogen Chloride Trade
    A comment questioned whether this rulemaking was a significant 
rule. The person stated that the DEA acknowledged that the industry was 
large by including the statement ``the majority of anhydrous hydrogen 
chloride transactions involve thousands of pounds'' in the proposed 
rulemaking. This statement refers to the amount of anhydrous hydrogen 
chloride traded in a single transaction and not the number of persons 
carrying out such transactions. The major uses of anhydrous hydrogen 
chloride were determined to be in the cotton industry, the electronic/
silicon industry, the pharmaceutical industry and other industries for 
use in chemical synthesis. All of these industries use large quantities 
of anhydrous hydrogen chloride for their manufacturing processes.
    Distributions of anhydrous hydrogen chloride have been identified 
as originating from manufacturing sites that produce anhydrous hydrogen 
chloride as a by-product of a principle manufacturing operation. 
Manufacturers distribute large quantities of anhydrous hydrogen 
chloride, sometimes under terms of a contract, to end-users. The impact 
of this rulemaking on the trade has been evaluated by considering the 
added cost of doing business, not the gross annual cost for the entire 
anhydrous chloride trade. The DEA, as stated, only requires access to 
records that are part of daily recordkeeping for most companies that 
trade in this commodity. These records can be those already required by 
other federal agencies, or by state and local agencies. Normal business 
records needed by companies for internal recordkeeping are likely to be 
adequate for the purposes of this rulemaking.
    21 CFR 1310.06 states that ``* * * normal business records shall be 
considered adequate if they contain the information listed in paragraph 
(a) of this section and are readily retrievable from other business 
records of the regulated person.'' This acceptance of records that are 
already maintained by persons in the anhydrous hydrogen chloride trade 
reduces the impact on the anhydrous hydrogen chloride industry.

3. Conclusion

    The DEA has considered the comments submitted in response to the 
notice of proposed rulemaking (62 FR 51072) to establish the anhydrous 
hydrogen chloride threshold. Out of seven comments received, only one 
requested that the threshold be raised. Most comments raised issues of 
clarification or compliance. The DEA concluded that the threshold for 
anhydrous hydrogen chloride will be established at 0.0 kilograms for 
domestic distributions. This threshold is based on anhydrous hydrogen 
chloride cylinders containing as little as 0.5 pounds of the chemical 
being recovered at illicit methamphetamine laboratories and legitimate 
transactions of this chemical being large. Maintaining the zero 
threshold will help curtail diversion of amounts useful to the 
clandestine operator. Increasing the threshold will allow for the 
manufacturing of methamphetamine in quantities normally associated with 
clandestine operations with traffickers obtaining as little as 0.5 
pounds of the chemical.

Part III  Category Exemption

a. Comments Requesting Category Exemption
    The DEA received comments requesting exemption for two categories 
of transactions involving anhydrous hydrogen chloride. These are 
transactions involving: (1) Refrigerated liquid; and (2) anhydrous 
hydrogen chloride distributed by pipeline. The DEA agrees that anhydous 
hydrogen chloride distributed by these methods is unlikely to be 
susceptible to diversion. The exemption for these categories was not 
proposed in the Notice of Proposed Rulemaking. Authority to remove a 
category of transaction from the definition of ``regulated 
transaction'' is given in 21 U.S.C. 802(39)(A)(iii), which permits 
exclusion of ``any category of transaction or any category of 
transaction for a specific listed chemical or chemicals specified by 
regulation of the Attorney General as excluded from this definition as 
unnecessary for enforcement of this subchapter or subchapter II of this 
chapter.''
b. Refrigerated Liquid; Large Quantity Distributions of Anhydrous 
Hydrogen Chloride
    The DEA collected additional information from the affected 
industry. DEA learned that rail and truck carriers ship refrigerated 
liquid only in large containers. The average payload of a rail car is 
approximately 135,000 pounds. The capacity for tank trucks is 
approximately 12,000 to 30,000 pounds. These shipments are in single 
containers holding the specified weights. Specialized equipment and 
engineering skills are needed to off-load this commodity. Distributors 
are aware of their customers and are involved in tracking shipments. 
The DEA believes that anhydrous hydrogen chloride in this form and in 
these quantities is not likely to be diverted.
    DEA has not identified any shipment of refrigerated anhydous 
hydrogen chloride less than the tank truck size of approximately 12,000 
pounds. Therefore, domestic distributions of anhydous hydrogen chloride 
in single container shipments of 12,000 pounds (net weight) or more 
will be excluded from the definition of regulated transaction. 
Transactions that involve multiple containers, each containing less 
than 12,000 pounds of the chemical are regulated transactions even if 
the aggregate weight is over 12,000 pounds.

Why Not Just Provide an Exemption for All Transactions in ``Anhydrous 
Hydrogen Chloride, Refrigerated Liquid''?

    The refrigerated liquid is not clearly defined or distinguished 
from the gaseous form except by the weight of the anhydrous hydrogen 
chloride contained in a single vessel. Distributors use both cooling 
and pressure to liquefy the gas in order to increase the amount of 
anhydrous hydrogen chloride that the container can hold. However, the 
containers that transport the liquefied hydrogen chloride are not 
refrigerated. The method of distributing the

[[Page 47315]]

refrigerated form is only clearly distinguished by the size of the 
vessel used to transport the commodity. DEA is concerned that 
unscrupulous persons may attempt to deceive law enforcement personnel 
by distributing smaller quantities mislabeled as refrigerated liquid. 
Therefore, the DEA concluded that a category be defined by the net 
weight of anhydrous hydrogen chloride that a single container holds. 
Defining the category by using the net weight of anhydrous hydrogen 
chloride in a single container eliminates the possibility of 
misinterpreting whether or not a distribution is a regulated 
transaction.
c. Pipeline Transfers
    The DEA also received comments that included reasons to eliminate 
pipeline transactions of anhydrous hydrogen chloride as regulated 
transactions. Pipeline transactions involve pumping the chemical 
through a closed system, directly to the customer from the 
distributor's site. Pipelines are located underground or in piperacks 
and are maintained at high pressure. Diversion from a pipeline is 
unlikely because of the location, construction and the obvious danger 
associated with the unauthorized tapping of this source. Pipeline 
distributions may involve thousands of pounds of anhydrous hydrogen 
chloride transferred on a given day.
    The DEA concluded, in light of these comments, that these 
transactions have an insignificant risk of diversion. Therefore, 
domestic pipeline transactions will be the second category of 
transaction in anhydrous hydrogen chloride regarded as a non-regulated 
transaction.
d. Exclusion of Categories; Interim Rule With Request for Comments
    This Final Rule will establish, on an interim basis, that domestic 
transactions of (1) anhydrous hydrogen chloride weighting 12,000 pounds 
(net weight) or more in a single container or (2) anhydrous hydrogen 
chloride by pipeline are excluded from the definition of regulated 
transactions. These exemptions will take effect on the day that this 
Final Rule is published in the Federal Register.
    To exempt these categories, two new paragraphs (h) and (i) in Title 
21 CFR Section 1310.08 will be added to read; (h) Domestic distribution 
of anhydrous hydrogen chloride weighing 12,000 pounds (net weight) or 
more in a single container; and (i) Domestic distribution of anhydrous 
hydrogen chloride by pipeline. The DEA is soliciting comments only on 
this portion of this Final Rule. The DEA will allow 30 days for persons 
to comment on these category exemptions.
    After the close of this comment period pertaining to the exempted 
categories, DEA will publish a notice in the Federal Register to inform 
interested persons if changes are needed or if these categories will be 
adopted as stated.
e. Exemption Authority
    The CSA authorizes DEA, pursuant to 21 U.S.C. 802(39)(A)(iii), to 
remove certain transactions in listed chemicals from the definition of 
regulated transaction. DEA has determined that transactions in 
anhydrous hydrogen chloride in the form of refrigerated liquid and 
transactions involving the direct transfer of anhydrous hydrogen 
chloride by pipeline are unlikely sources for diversion and should be 
removed from the definition of regulated transaction. DEA became aware 
of these types of transactions by the comments received in response to 
the Federal Register proposal to establish thresholds for iodine and 
anhydrous hydrogen chloride (62 FR 51072). Since that proposal did not 
propose that these categories of transactions in anhydrous hydrogen 
chloride would be exempt, the general public did not have the 
opportunity to comment on the exclusion of these transactions from the 
definition of regulated transaction.
    The DEA has determined that good cause exists under the 
Administrative Procedure Act (5 U.S.C. 553 et seq.) (APA) to forego a 
notice of proposed rulemaking for the exclusion of these transactions 
from the definition of regulated transaction. The AP states that an 
agency may forego a notice of proposed rule making if it is 
impracticable, unnecessary, or contrary to the public interest.
    Although all transactions involving anhydrous hydrogen chloride are 
considered regulated until and unless DEA establishes a threshold, 
establishing a zero threshold for this substance may cause affected 
parties to implement a permanent system of recordkeeping and reporting 
for all transactions. This would involve some companies who otherwise 
may not engage in regulated transactions if the exemptions are 
finalized. If a proposal is published in the Federal Register to 
exclude these transactions from the definition of regulated 
transactions, each affected entity may find it necessary to establish 
these procedures on a permanent basis even though the requirement may 
only be temporary. To avoid unnecessary burdens on affected companies 
during the pendency of proceedings in this matter, the DEA will include 
as part of this rulemaking an interim rule, with request for comments, 
that removes these two types of transactions from the definition of 
regulated transactions.
    The DEA is also including in this final rulemaking the reinsertion 
of the table in 21 CFR 1310.40(f)(2)(iv), listing thresholds for 
exports, transshipments, and international transactions to designated 
countries set forth in 21 CFR 1310.08(b). The DEA's final rule 
regarding implementation of the Domestic Chemical Diversion Control Act 
of 1993, published on June 22, 1995 (60 FR 32447), inadvertently 
omitted the table from the section. A DEA chemical code number for 
iodine, 6699, will also be included in this rule.
    This regulation has been drafted and reviewed in accordance with 
Executive Order 12866, Section 1(b), Principles of Regulation. The DEA 
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.
    The Deputy Administrator in accordance with the Regulatory 
Flexibility Act (5 U.S.C. 605(b)), has reviewed this regulation and by 
approving it certifies that this regulation will not have a significant 
economic impact upon a substantial number of small entities for the 
following reasons: The DEA sought information from legitimate handlers 
of iodine to determine the uses of iodine and the quantities typically 
sold in legitimate transactions. The DEA sought information from over 
300 veterinary suppliers and feed and farm supply stores to determine 
how iodine is typically sold. The DEA learned that walk-in customers 
would purchase, at the most, three 2-ounce bottles (less than 0.2 
kilograms). Suppliers and end-users claim that a 2-ounce bottle lasts 
several months. Iodine has very limited application for walk-in 
customers. Setting the iodine threshold at 0.4 kilograms will not have 
a significant effect on small businesses. The iodine portion of this 
Final Rule applies only to those companies manufacturing and 
distributing iodine in larger volumes. Recordkeeping requirements will 
not impact researchers or other end-users.
    This regulation will not have a significant economic impact upon a 
substantial number of small entities that trade in anhydrous hydrogen 
chloride. Trade in anhydrous hydrogen chloride is mostly in very large 
quantities. Generally, thousands of pounds are involved in single 
industrial transactions. Smaller quantities i.e.,

[[Page 47316]]

single or multiple cylinders) are being used by research, analytical or 
synthetic laboratories. The majority of anhydrous hydrogen chloride is 
traded in thousands of pound quantities. The DEA has included in this 
Final Rule the exclusion from the definition of ``regulated 
transaction'' transactions involving anhydrous hydrogen chloride in 
bulk quantities of 12,000 pounds (net weight) or more. The DEA is 
soliciting comments on that part of this Final Rule.
    This regulation will not have substantial direct effects on the 
States, on the relationship between the national government and the 
States, or on distribution of power and responsibilities among the 
various levels of government. Therefore, in accordance with Executive 
Order 12612, it is determined that this rule does not have sufficient 
federalism implications to warrant the preparation of a Federalism 
Assessment.

List of Subjects in 21 CFR Part 1210

    Drug traffic control, Reporting and recordkeeping requirements.


    For reasons set out above, 21 CFR Part 1310 is amended as follows:

PART 1310--[AMENDED]

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

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


    2. Section 1310.02 is amended by revising paragraph (b)(8) and 
adding paragraph (b)(11) to read as follows:


Sec. 1310.02  Substances covered.

* * * * *
    (b) List II chemicals:
* * * * *

(8) Hydrochloric acid (including anhydrous hydrogen chloride)...    6545
 
                  *        *        *        *        *
(11) Iodine.....................................................    6699
 


    3. Section 1310.04 is amended by adding new paragraphs (f)(2)(ii) 
(H) and (I), and revising (f)(2)(iv) to read as follows:


Sec. 1310.04  Maintenance of records.

* * * * *
    (f) * * *
    (2) * * *
    (i) * * *
    (ii) Domestic Sales

----------------------------------------------------------------------------------------------------------------
                                                            Threshold by
                        Chemical                               volume                Threshold by weight
----------------------------------------------------------------------------------------------------------------
 
*                  *                  *                  *                  *                  *
                                                        *
(H) Iodine..............................................              N/A   0.4 kilograms.
(I) Anhydrous Hydrogen chloride.........................              N/A   0.0 kilograms.
----------------------------------------------------------------------------------------------------------------

    (iii) * * *
    (iv) Exports, Transshipments and International Transactions to 
Designated Countries as Set Forth in Sec. 1310.08(b).

----------------------------------------------------------------------------------------------------------------
                      Chemical                           Threshold by volume           Threshold by weight
----------------------------------------------------------------------------------------------------------------
(A) Hydrochloric acid..............................  50 gallons
    (1) Anhydrous Hydrogen chloride................  ..........................  27 kilograms.
(B) Sulfuric acid..................................  50 gallons
----------------------------------------------------------------------------------------------------------------

* * * * *

    4. Section 1310.08 is amended by revising paragraphs (a) and (b) 
introductory text and by adding new paragraphs (f), (g), (h) and (i) to 
read as follows:


Sec. 1310.08  Excluded transactions.

* * * * *
    (a) Domestic and import transactions of hydrochloric and sulfuric 
acids but not including anhydrous hydrogen chloride.
    (b) Exports, transshipments, and international transactions of 
hydrochloric (including anhydrous hydrogen chloride) and sulfuric 
acids, except for exports, transshipments and international 
transactions to the following countries:
* * * * *
    (f) Import and export transactions of iodine.
    (g) Import transactions of anhydrous hydrogen chloride.
    (h) Domestic distribution of anhydrous hydrogen chloride weighing 
12,000 pounds (net weight) or more in a single container.
    (i) Domestic distribtuion of anhydrous hydrogen chloride by 
pipeline.

    Dated: May 18, 2000.
Donnie R. Marshall,
Deputy Administrator.
[FR Doc. 00-19289 Filed 8-1-00; 8:45 am]
BILLING CODE 4410-09-M