[Federal Register Volume 68, Number 84 (Thursday, May 1, 2003)]
[Rules and Regulations]
[Pages 23195-23206]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-10565]


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DEPARTMENT OF JUSTICE

Drug Enforcement Administration

21 CFR Parts 1300 and 1310

[Docket No. DEA-137F1]
RIN 1117-AA31


Exemption of Chemical Mixtures Containing the List I Chemicals 
Ephedrine, N-Methylephedrine, N-Methylpseudoephedrine, 
Norpseudoephedrine, Phenylpropanolamine, and Pseudoephedrine

AGENCY: Drug Enforcement Administration (DEA), Justice.

ACTION: Final rule.

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SUMMARY: On September 16, 1998, the Drug Enforcement Administration 
(DEA) published a Notice of Proposed Rulemaking (NPRM) to implement 
provisions of the Controlled Substances Act (CSA) pertaining to the 
regulation of chemical mixtures which contain any of 34 listed 
chemicals. The NPRM was published to implement CSA requirements that 
only those chemical mixtures identified by regulation be exempt from 
applicable regulatory controls.
    The NPRM proposed criteria for the determination of whether a 
chemical mixture shall qualify for automatic exemption from CSA 
regulatory controls. Additionally, the NPRM defined an application 
process by which manufacturers may apply for an exemption for chemical 
mixtures that do not qualify for automatic exemption.
    Due to concerns regarding the potential illicit use of chemical 
mixtures which contain ephedrine, N-methylephedrine, N-
methylpseudoephedrine, norpseudoephedrine, phenylpropanolamine, and/or 
pseudoephedrine (as precursor material for the production of 
methamphetamine and related amphetamines), DEA is hereby finalizing the 
portion of the NPRM pertaining to these six chemicals. Final 
regulations for all remaining listed chemicals will be published under 
separate rulemaking, upon completion of a thorough review of applicable 
comments.

DATES: Effective June 2, 2003. Persons seeking registration must apply 
on or before June 30, 2003 in order to continue their business pending 
final action by DEA on their application.

FOR FURTHER INFORMATION CONTACT: Frank Sapienza, Chief, Drug & Chemical 
Evaluation Section, Office of Diversion Control, Drug Enforcement 
Administration, Washington, DC 20537, telephone (202) 307-7183.

SUPPLEMENTARY INFORMATION:

I. Background

    This final rule addresses the List I chemicals ephedrine, N-
methylephedrine, N-methylpseudoephedrine, norpseudoephedrine, 
phenylpropanolamine, and pseudoephedrine as they occur in chemical 
mixtures. The rule establishes a concentration limit for each of these 
six listed chemicals. If the concentration of the listed chemical is at 
or below the limit, in a chemical mixture, then the mixture will be 
automatically exempted from the registration, reporting, recordkeeping 
and security requirements of the Controlled Substances Act. All 
chemical mixtures containing any of these six List I chemicals above 
the established concentration levels are subject to the requirements of 
the CSA. This final rule primarily addresses these chemicals as 
encountered in dietary and nutritional supplements. Actions taken in 
this final rule will not adversely impact the public's access to these 
products.
    DEA originally proposed a concentration level of two percent for 
chemical mixtures containing ephedrine and/or pseudoephedrine. However, 
based on the comments received from the NPRM (63 FR 49506, Sept. 16, 
1998), DEA has determined that a two percent concentration level would 
create significant regulatory burdens for the affected industry. 
Therefore, based on comments received, DEA has determined that a five 
percent concentration level will permit access to these products, while 
ensuring that these products are unlikely to be subject to diversion 
for the illegal manufacture of methamphetamine.
    This final rule also establishes an exemption for the category of 
products consisting of unaltered harvested plant material, which DEA 
believes are not subject to diversion regardless of the concentration 
of the List I chemical in the product. Finally, this rule provides for 
a process whereby a manufacturer of a product which would otherwise be 
subject to regulation may request an exemption for that specific 
product. This process will allow chemical mixtures not automatically 
exempt by the concentration limit to be considered for exempt status 
under the CSA.

[[Page 23196]]

Background

What Chemical Controls Have Been Established in the United States?

    The Chemical Diversion and Trafficking Act of 1988 (Pub. L. 100-
690)(CDTA) was passed by Congress to curtail the diversion of specific 
chemicals used in the illicit manufacture of controlled substances. The 
CDTA established recordkeeping and reporting requirements necessary for 
DEA to identify and track chemical diversion. While the CDTA achieved 
initial success in curtailing the diversion of chemicals, traffickers 
soon found and took advantage of certain shortcomings in the law. In 
the United States (U.S.), traffickers were able to obtain needed 
supplies by purchasing products that were exempted from regulation 
under the CDTA. Such products include chemical mixtures.

What Are Chemical Mixtures?

    The Chemical Diversion and Trafficking Act of 1988 (CDTA) created a 
definition of ``chemical mixture'' (21 U.S.C. 802(40)), and exempted 
chemical mixtures from regulatory coverage. The Domestic Chemical 
Diversion Control Act of 1993 (DCDCA), enacted in April of 1994, 
created a provision dealing with the exemption of chemical mixtures. 
Chemical mixtures are defined as ``a combination of two or more 
chemical substances, at least one of which is not a list I chemical or 
a list II chemical, except that such term does not include any 
combination of a list I chemical or a list II chemical with another 
chemical that is present solely as an impurity.''

How Are Ephedrine, N-methylephedrine, N-methylpseudoephedrine, 
Norpseudoephedrine, Phenylpropanolamine, and Pseudoephedrine Used in 
Chemical Mixtures and What Are the Regulatory Consequences?

    Ephedrine, N-methylephedrine, N-methylpseudoephedrine, 
norpseudoephedrine, phenylpropanolamine, and pseudoephedrine are List I 
chemicals. The only chemical mixtures containing these List I 
chemicals, of which DEA is aware, are dietary and nutritional 
supplements. Dietary and nutritional supplements are readily available, 
being commonly sold to the public in drug and grocery stores, health 
and nutrition stores, and through direct marketing campaigns. These 
dietary and nutritional supplements contain material from the ephedra 
plant, or extract from the ephedra plant. If these dietary and 
nutritional supplements meet certain criteria under the Federal Food, 
Drug, and Cosmetic Act (FDCA), they are not recognized as drugs under 
the FDCA, but are nonetheless considered to be chemical mixtures 
governed by DEA law and regulations. In contrast, over-the-counter 
(OTC) and prescription drug products containing these listed chemicals 
are not considered chemical mixtures and instead are specifically 
addressed in 21 U.S.C. 802(39)(A)(iv). Also see 21 CFR 
1300.02(b)(28)(i). Therefore, this final rulemaking has no impact upon 
OTC and prescription drug products lawfully marketed under the FDCA.

How Have Chemical Mixtures Been Regulated Until Now?

    Prior to the enactment of the DCDCA, the term ``regulated 
transaction'' was defined to exclude ``any transaction in a chemical 
mixture'' (21 U.S.C. 802(39)(A)(v)). Therefore, transactions involving 
all chemical mixtures (including dietary supplements) were exempt from 
recordkeeping, registration and other chemical regulatory control 
requirements of the CSA.

How Did the DCDCA Affect Regulation of Chemical Mixtures?

    With passage of the DCDCA, all chemical mixtures became subject to 
regulatory requirements for listed chemicals under the law, unless 
specifically exempted by DEA. These requirements included registration 
for certain handlers of List I chemicals, recordkeeping, reporting, and 
security. Thus, all dietary and nutritional supplements containing 
listed chemicals became subject to DEA regulation. However, pending 
promulgation of final regulations governing exemption, dietary 
supplements containing ephedrine, N-methylephedrine, N-
methylpseudoephedrine, norpseudoephedrine, phenylpropanolamine, and 
pseudoephedrine remained exempt from the requirements of the CSA.

What Changes in the Law Did the DCDCA Make With Respect to Chemical 
Mixtures?

    The DCDCA amended the CSA (21 U.S.C. 802(39)(A)(v)) to limit the 
application of the above stated exemption and provided the Attorney 
General with the authority to exempt a chemical mixture containing a 
listed chemical if it is ``formulated in such a way that it cannot be 
easily used in the illicit production of a controlled substance'' and 
``the listed chemical or chemicals contained in the mixture cannot be 
readily recovered.'' Until regulations which delineate criteria and 
procedures for exempting specific chemical mixtures are finalized, DEA 
has treated all chemical mixtures as being exempt from the chemical 
regulatory requirements of the CSA. (Note that OTC and prescription 
drug products are not considered chemical mixtures and are addressed 
separately under 21 U.S.C. 802(39)(A)(iv)).

Why Is DEA Concerned About Chemical Mixtures?

    Some chemical mixtures can be and have been used by traffickers in 
the illicit manufacture of controlled substances. This exemption 
provided traffickers with an unregulated source for obtaining these 
chemicals. To address these problems, the DCDCA amended the exemption 
to provide that only those chemical mixtures specified by regulation 
would be exempt from the definition of ``regulated transaction'.

What Regulatory Controls Has DEA Previously Proposed for the Control of 
Chemical Mixtures?

    Regulations regarding the exemption of chemical mixtures were 
initially proposed by DEA on October 13, 1994 (59 FR 51888). In 
response to industry concerns, the proposed regulations were withdrawn 
on December 9, 1994 (59 FR 63738). After consulting with the private 
sector and carefully considering industry and other concerns, new 
regulations regarding chemical mixtures were proposed on September 16, 
1998 (63 FR 49506). The comment period, which was twice extended, 
closed on April 16, 1999.
    There are thousands of chemical mixtures in legitimate commerce, 
the majority of which are not useful to the illicit laboratory 
operator. The NPRM proposed criteria for the determination of whether a 
chemical mixture would be automatically exempt from CSA regulatory 
controls. Additionally, the NPRM defined an application process by 
which manufacturers may apply for an exemption for chemical mixtures 
that do not qualify for automatic exemption.
    The DEA proposed that each chemical be assigned a concentration 
limit that, if found at or below the limit, will cause the mixture to 
be treated as a nonregulated chemical. This quantitative approach to 
identifying regulated mixtures is considered necessary due to the 
complexity of chemical-based commodities and the huge variety of 
products. These criteria are expected to exempt the vast majority of 
chemical mixtures containing listed chemicals. The NPRM included the 
proposed creation of a ``Table of

[[Page 23197]]

Concentration Limits,'' in 21 CFR 1310.12. This table lists the 
concentration limits for each listed chemical.
    While the concentration limits will be sufficient for many chemical 
mixtures, there are certain categories of mixtures that fall outside 
the limits provided, but are not considered to be likely sources of 
diversion. Therefore the DEA also proposed the exemption of three 
categories of chemical mixtures. The NPRM proposed that (1) waste 
materials regulated by the Environmental Protection Agency (EPA); (2) 
completely formulated paints and coatings; and (3) harvested plant 
material containing listed chemicals, shall remain exempt regardless of 
concentration.
    In recognition that not all mixtures that qualify for exemption can 
be identified by concentration or category, the DEA also proposed an 
application process to exempt additional mixtures which are not likely 
to be diverted for use in the illicit production of controlled 
substances.

How Will This Rulemaking Affect Access to the Products?

    As noted previously, the only products affected by this rulemaking 
include dietary and nutritional supplements. These products are readily 
available to the general public through a variety of commercial 
outlets, including grocery and health stores, and direct marketing 
campaigns. These products are available to the public without a 
prescription.
    To permit access to these products, while their diversion for the 
illicit manufacture of controlled substances is limited, DEA worked 
with members of the dietary and nutritional supplements manufacturing 
industry to determine an appropriate concentration level for each of 
these listed chemicals. DEA was assured by members of the affected 
industry, through discussions between the Administration and 
manufacturers, that the concentration levels discussed in this 
rulemaking would allow manufacturers to continue their manufacturing 
processes without harm to the product. Indeed, as discussed below, DEA 
received and incorporated comments from the affected industry 
suggesting these concentration levels rather than those originally 
proposed by DEA. At the same time, these levels are sufficient to 
prevent the diversion of these products for the illicit manufacture of 
controlled substances. This rulemaking will not affect the public's 
access to these products, nor, according to members of the industry, 
will these concentration levels have an adverse impact on the 
manufacturers of dietary and nutritional supplements.

The U.S. Department of Health and Human Services (HHS) and Food and 
Drug Administration (FDA) Recently Expressed Concerns Regarding the 
Safety of Dietary Supplements Containing Ephedra (i.e. Ephedrine and 
Pseudoephedrine). Does This DEA Regulation Mean That DEA Has Determined 
That Dietary Supplements Containing Less Than 5 Percent Ephedrine and 
Pseudoephedrine Are Safe for Human Consumption?

    No, this regulation does not attempt to address the issue of safety 
or human consumption of any products containing these listed chemicals. 
This regulation only deals with the issue of the potential illicit use 
of dietary supplements (and other chemical mixtures) containing 
ephedrine/ pseudoephedrine as precursor material for the production of 
methamphetamine.
    On February 28, 2003 the U.S. Department of Health and Human 
Services (HHS) and Food and Drug Administration (FDA) announced a 
series of actions designed to protect the public from potentially 
serious risks from the use of dietary supplement products containing 
ephedra. The announcement cites new evidence in the medical literature 
and in adverse event reports, of heightened concerns that dietary 
supplements containing ephedra may represent a ``significant and 
unreasonable risk of illness and injury.'' DEA recognizes that 
determinations regarding the safety of such dietary supplement products 
are the purview of HHS/FDA. This rule does not address the issue of 
safety or human consumption of such products.
    DEA has met with HHS/FDA staff on numerous occasions to discuss 
DEA's chemical mixture rule. HHS/FDA staff have been extremely 
supportive of DEA efforts to implement regulations which will subject 
materials containing greater than 5 percent ephedrine/ pseudoephedrine 
to CSA regulatory controls in order to prevent their use in the illicit 
production of methamphetamine. Any future action directed at dietary 
supplements by HHS/FDA will be separate from (and in addition to) the 
regulatory requirements implemented in this final rule.

What Action Is DEA Taking in This Final Rule?

1. Establishment of Chemical Mixture Regulations for Six Listed 
Chemicals
    While the September 16, 1998 Notice of Proposed Rulemaking 
``Exemption of Chemical Mixtures'' (63 FR 49506) pertained to the 
regulation of chemical mixtures which contained any of 34 listed 
chemicals, this rulemaking finalizes only those portions of the NPRM 
pertaining to six specific chemicals: ephedrine, N-methylephedrine, N-
methylpseudoephedrine, norpseudoephedrine, phenylpropanolamine, and 
pseudoephedrine. These chemicals are precursors to methamphetamine and 
related substances.
a. Establishment of Concentration Limits
    This final rule establishes a concentration limit for each of these 
six listed chemicals. If the concentration of the listed chemical is at 
or below the limit, then the mixture will be automatically exempted and 
therefore treated as a nonregulated chemical mixture. These 
concentration limits are provided in the ``Table of Concentration 
Limits,'' in 21 CFR 1310.12. The weight of the free base will be used 
to determine the concentration of a listed chemical if it is a salt. A 
mixture is exempt if the concentration of the listed chemical or 
chemicals is less than or equal to the percentages and other conditions 
described in the ``Table of Concentration Limits.''
    Therefore (1) a chemical mixture having a total concentration of 
ephedrine and/or pseudoephedrine of less than or equal to five percent 
by weight will be automatically exempt; (2) a chemical mixture having a 
total concentration of N-methylephedrine and/or N-methylpseudoephedrine 
of less than or equal to 0.1 percent by weight will be automatically 
exempt; and (3) a chemical mixture having a total concentration of 
phenylpropanolamine and/or norpseudoephedrine of less than or equal to 
0.6 percent by weight, will be automatically exempt.
b. Exemption of Harvested Plant Material Containing These Six Listed 
Chemicals
    This final rulemaking also establishes an exemption for a category 
of chemical mixtures which contain ephedrine, N-methylephedrine, N-
methylpseudoephedrine, norpseudoephedrine, phenylpropanolamine, and/or 
pseudoephedrine. While these mixtures may have higher concentration 
limits than provided above, the DEA believes they are not a likely 
source of diversion due to their inherent composition. Therefore, this 
rule also establishes an

[[Page 23198]]

exemption for the category of products consisting of harvested plant 
material.
    Harvested plant material that contains ephedrine, N-
methylephedrine, N-methylpseudoephedrine, norpseudoephedrine, 
phenylpropanolamine, and/or pseudoephedrine, while meeting the 
definition of chemical mixture, will be exempt provided the plant 
material is unaltered from its natural state. Changes in the physical 
state that preserve the natural composition of the material, such as 
grinding, chopping, mulching or cutting, do not affect the exemption 
status. However, changes that alter the natural composition of the 
material, such as that resulting from chemical or physical extraction, 
concentrating, enhancement or by chemical reaction, or any other 
treatment will disqualify the mixture from exemption.
c. Establishment of an Application Procedure for Chemical Mixtures 
Which Do Not Qualify for Automatic Exemption
    In recognition that not all mixtures that warrant exemption can be 
identified solely by concentration or category criteria, this Final 
Rule also sets forth an application process to exempt additional 
mixtures. Mixtures that are not automatically exempted by virtue of 
their concentration or category may still qualify for exemption based 
upon a review of the mixture composition by DEA. However, DEA will only 
grant an exemption to those chemical mixtures (1) formulated in such a 
way that they cannot be easily used in the illicit production of a 
controlled substance; and (2) from which the listed chemical or 
chemicals contained in the chemical mixture cannot be readily 
recovered.
    An application process is set forth in 21 CFR 1310.13 to allow 
possible exemption of chemical mixtures based on the formulation, even 
if the listed chemical exceeds the concentration limit.

How Does This Final Rulemaking Affect Chemical Mixtures Containing 
Listed Chemicals Other Than the Six Chemicals Specified in This 
Rulemaking?

    Because this Final Rule pertains to only six listed chemicals, 
applications will only be accepted for chemical mixtures containing 
ephedrine, N-methylephedrine, N-methylpseudoephedrine, 
norpseudoephedrine, phenylpropanolamine, and/or pseudoephedrine. Final 
regulations for all remaining listed chemicals will be published under 
separate rulemaking upon completion of a thorough review of applicable 
comments. Until publication of such a rulemaking, DEA will treat all 
transactions involving chemical mixtures containing these other listed 
chemicals as exempt from the definition of regulated transaction under 
the CSA.

Why Is DEA Finalizing Provisions for Only Certain Listed Chemicals in 
This Rulemaking?

    Methamphetamine is the most prevalent controlled substance 
illicitly synthesized in the United States. The clandestine 
manufacture, distribution and abuse of methamphetamine are serious 
public health problems. Nationally, the Drug Abuse Warning Network 
(DAWN) has documented approximately 2,900 methamphetamine/speed related 
deaths in the United States between January 1992 and December 1996. The 
number of DAWN reported methamphetamine associated deaths for 1997 was 
825 and 641 for 1998. For the years 1998 and 1999, the number of 
emergency room events associated with methamphetamine/speed were 11,490 
and 10,447, respectively.
    During calendar years 1994 through 1997, DEA was involved in the 
domestic seizure of 2,900 clandestine methamphetamine laboratories. 
Despite considerable efforts by Federal, state and local law 
enforcement, the illicit production, distribution and abuse of 
methamphetamine continue. Recent DEA seizure statistics indicate that 
the number of methamphetamine laboratory seizures has increased 
dramatically from 1996 through 2000. During 1998, DEA participated in 
the seizure of 1,623 methamphetamine laboratories. In 1999, the number 
rose to 2,127. These numbers do not include the thousands of laboratory 
seizures conducted independently by state and local law enforcement 
agencies. The chemicals ephedrine and/or pseudoephedrine were utilized 
as the precursor material at the vast majority of these laboratories.

What Form of the Six Subject Chemicals Is Being Encountered at Illicit 
Laboratories?

    At most of these laboratories, the precursor material was obtained 
via the diversion of over-the-counter (OTC) products marketed in tablet 
and capsule form, not through the diversion of bulk powder. While the 
vast majority of products seized at illicit methamphetamine 
laboratories were OTC drug products, ephedra and ma huang extracts 
containing ephedrine, N-methylephedrine, N-methylpseudoephedrine, 
norpseudoephedrine, phenylpropanolamine, and pseudoephedrine, and 
dietary supplement products (containing ephedra and ma huang extracts) 
have been seized at clandestine methamphetamine laboratories. At this 
time, the frequency with which these dietary supplement products and 
extracts are encountered is small. However, DEA studies confirm that 
the ephedrine contained in such extracts and some dietary supplement 
products can be readily recovered and can be easily used in the 
production of methamphetamine. Ephedra (in the form of dietary 
supplements or bulk ephedra extract), therefore, can and is being used 
as the source of precursor material for the illicit production of 
methamphetamine.
    Recently, DEA has noted large increases in the number of ephedra 
dietary supplements being introduced into the marketplace. These 
products have a high level of ephedrine and are distributed by some 
companies whose OTC products have previously been identified at 
clandestine methamphetamine manufacturing laboratories. Several 
companies' advertisements tout that these new products are considered 
chemical mixtures and therefore are not subject to CSA regulatory 
controls. The introduction of some of these products may be creating an 
unregulated source of ephedrine (and related List I chemicals) for 
illicit use.
    Therefore, due to (1) the growing methamphetamine clandestine 
laboratory problem; (2) the illicit use of extracts and dietary 
supplements (containing ephedrine and related List I chemicals) as 
precursor material for the clandestine production of methamphetamine 
and (3) the growth of new product introductions of dietary supplement 
products containing these chemicals, DEA has decided to finalize these 
provisions for the chemicals ephedrine, N-methylephedrine, N-
methylpseudoephedrine, norpseudoephedrine, phenylpropanolamine, and 
pseudoephedrine.

What Information Had DEA Collected Before Proposing Regulations on 
Chemical Mixtures?

    Prior to publication of the notice of proposed rulemaking 
``Exemption of Chemical Mixtures'' (63 FR 49506) on September 16, 1998, 
the DEA attempted to learn as much as possible about the affected 
industry. The DEA first established contact with industry shortly after 
withdrawal of the regulations regarding the exemption of

[[Page 23199]]

chemical mixtures proposed by DEA on October 13, 1994 (59 FR 51888). 
That portion of the proposal was withdrawn on December 9, 1994 (59 FR 
63738) in response to industry concerns. DEA met with representatives 
from associations (and affiliated members) representing chemical 
manufacturers, the paints and coating industry, flavor and fragrance 
manufacturers, chemical distributors, the dietary supplements industry 
and others. These different groups expressed unique concerns that the 
DEA attempted to address within the notice of proposed rulemaking (63 
FR 49506).

How and at What Concentration Did the NPRM Propose to Regulate Dietary 
Supplements?

    List I chemicals comprise 24 of the 35 chemicals regulated by DEA, 
but only a few have been identified to be routinely used in chemical 
mixtures. This contrasts with the situation for List II chemicals which 
exist in a multitude of chemical mixtures used in a vast variety of 
industries.
    The few list I chemicals that are used in chemical mixtures are 
utilized by a small number of industries. The dietary supplement 
industry is the primary industry having chemical mixtures containing 
these six listed chemicals. Natural ephedrine is obtained from the 
ephedra plant. The ephedrine is extracted and sold as bulk ephedra 
extract and used to formulate dietary supplements.
    Prior to proposing the concentration limit for ephedrine, DEA 
gathered information from representatives of several dietary supplement 
manufacturers and distributors within the nutritional supplement 
industry. Information from industry, law enforcement and other sources 
indicated that a two percent concentration limit for ephedrine/
pseudoephedrine would be adequate to prevent diversion and not unduly 
burden industry. The NPRM therefore proposed a two percent 
concentration limit.
    In the NPRM, the DEA specifically solicited information from the 
dietary supplement and other industries regarding this matter and 
subsequently obtained new information suggesting that a higher 
concentration limit may be warranted.

Who Is Affected by This Final Rule?

    This Rulemaking will affect only persons who manufacture, 
distribute, import, or export chemical formulations containing the List 
I chemicals ephedrine, N-methylephedrine, N-methylpseudoephedrine, 
norpseudoephedrine, phenylpropanolamine, and/or pseudoephedrine. End 
users, including those who manufacture a regulated mixture and convert 
it to a nonregulated form in an on-site manufacturing process, are not 
affected. Of those persons whose mixtures are regulated, only those 
distributions above the established threshold quantity for the listed 
chemical(s) are regarded as regulated transactions (as specified in 21 
CFR 1310.04). Since no threshold has been established for ephedrine, 
all transactions in regulated chemical mixtures containing ephedrine 
will be regulated transactions. The threshold for regulated chemical 
mixtures containing N-methylephedrine, N-methylpseudoephedrine, 
norpseudoephedrine, phenylpropanolamine, and pseudoephedrine are found 
in 21 CFR 1310.04(f)(1). This Final Rule will not affect the regulatory 
status for chemical mixtures containing the remaining listed chemicals.
    This is an appropriate decision at this time, for most dietary 
supplements are not formulated in such a way to be easily used in the 
illicit manufacture of a controlled substance and are therefore not 
likely to be diverted. This will exempt the majority of these chemical 
mixtures from regulatory controls. Taking this information into 
account, DEA is implementing a concentration limit of five percent 
(total ephedrine/pseudoephedrine). This should exempt those dietary 
supplements which are not likely to be sources of precursor material 
for clandestine laboratories. By taking this action, DEA is endeavoring 
to permit public access to these chemical mixtures while ensuring that 
they are not subject to diversion. Based on the comments DEA received, 
as well as discussions with members of the affected industry, DEA 
believes that dietary and nutritional supplements will not be adversely 
affected by this rulemaking, and that the public will continue to have 
full access to these products.

II. Comments Received in Response to the NPRM for These Six Chemicals

    DEA proposed new regulations regarding the exemption of chemical 
mixtures by publishing an NPRM on September 16, 1998, entitled 
``Exemption of Chemical Mixtures'' (63 FR 49506). The comment period, 
which was twice extended, closed on April 16, 1999. Comments discussed 
in this Final Rule will be limited to those related to the listed 
chemicals being addressed in this Final Rule. Two comments addressed 
ephedrine and pseudoephedrine only in relation to dietary supplement 
products. There were no comments on N-methylephedrine, N-
methylpseudoephedrine, norpseudoephedrine, or phenylpropanolamine.
    Three comments addressed the application process as being limited 
and suggested a means to exempt a group or family of mixtures and allow 
for variation, without having to reapply for exemption. Two comments 
requested that once a mixture is granted exemption it should apply to 
all manufacturers of the same mixture. Three persons suggested a 21-day 
time limit to determine if a mixture is exempt by the application 
process. One person suggested a five-day period for approval of an 
application. Below is a discussion on the specific comments.

Comments Pertaining to Dietary Supplements

Request for Exemption of Multiple Ingredient Dietary Supplements or 
Products With Less Than Five Percent Total Ephedrine/Pseudoephedrine
    One comment requested that DEA automatically exempt multiple 
ingredient dietary supplement products containing ephedrine alkaloids 
or, alternatively, increase the concentration limit for ephedrine from 
two to five percent. The comment also requested that the capsule weight 
be considered in determining automatic exemption.
    DEA attempted to obtain information on pertinent formulations and 
was provided, by the interested parties requesting a five percent 
concentration limit, formulations representing the dietary supplements 
in question. Labeling information for six products containing ephedra 
extract were provided to DEA. Five of the six labels provided 
sufficient information to determine that they contain more than two 
percent but less than five percent ephedrine alkaloids.
    The total weight was not included in the label information for one 
of the examples. Therefore, the exact concentration could not be 
calculated. DEA estimates that the concentration of ephedrine alkaloids 
for this product is also less than five percent from available label 
information. This label stated that the ephedra was standardized to 
supply 24 mg of ephedrine alkaloids. This quantity of ephedrine is 
approximately that found in over-the-counter (OTC) drug products.
    Some formulators add additional ephedrine to standardize a product. 
This practice is used to assure uniformity between batches of raw

[[Page 23200]]

material obtained from natural sources. However, this method may also 
be used to formulate supplements that have an unnaturally high level of 
ephedrine or other alkaloid. This is sometimes referred to as 
``spiking.'' Both standardization and spiking imply that the product is 
not ``all natural'' and contains pharmaceutical grade ephedrine, or 
ephedrine hydrochloride. Ephedrine hydrochloride is the most common 
form of ephedrine used by clandestine laboratory operators to make 
methamphetamine.
    The comment requested that if the five percent limit is 
unacceptable to DEA then multiple component dietary supplements should 
be exempt as a category. DEA agrees that the multiple ingredient 
dietary supplements, represented by the labels submitted by this 
commentor, would not be likely sources for diversion due to the added 
difficulty in extracting the listed chemicals. However, DEA realizes 
that these formulations do not represent all possibilities for dietary 
supplements containing ephedrine/pseudoephedrine. Without a 
concentration limit, formulations could be sold that have a high 
percentage of ephedrine.
    DEA had been informed that persons represented in this comment sell 
only products with a maximum amount of 25 mg of ephedrine alkaloids per 
dosage unit. That amount is common in OTC drug products containing 
ephedrine. Ephedrine products containing 25 mg are commonly seized at 
clandestine laboratories. Therefore, DEA concludes that a maximum 
amount of ephedrine that is based on weight is not a deterrent for 
using a product as a source of precursor material.
    DEA carefully considered exempting these dietary supplements by 
category but decided against this for the following reasons. 
Manufacturers can formulate multiple component dietary supplements rich 
in ephedrine that are legally marketed as dietary supplements. DEA has 
experienced multiple component OTC products being diverted upon control 
of single entity ephedrine OTC products. Further, the manufacturer may 
include innocuous substances within an ephedrine-rich formulation. The 
overall result is a legitimately marketed dietary supplement useful to 
traffickers. Permitting unlimited trade in such chemical mixtures would 
defeat previous efforts by Congress and DEA to curtail the illicit 
production of methamphetamine.
    As stated on one of the labels provided to DEA, the ephedra 
supplement may be standardized to obtain an amount of ephedrine at 
least equal to that found in OTC drug products. As noted above, 
standardization is achieved by using a synthetic form of ephedrine, 
ephedrine hydrochloride, which may be useful to traffickers. That form 
is more easily separated from other ingredients due to its affinity for 
water. DEA determined that exempting dietary supplements or ``multiple 
ingredient'' dietary supplements would create a loophole for the 
diversion of methamphetamine precursor. A supplement can be 
``standardized'' to contain up to 25 mg of ephedrine with minimal 
additional ingredients that results in a high weight ratio of ephedrine 
and be legally marketed as a dietary supplement. Therefore, DEA has 
decided not to exempt dietary supplements as a category.
    One commentor stated that methamphetamine cannot be produced from 
their dietary supplement products. The commentor sponsored an 
experiment to prove this assertion. The dietary supplement used in the 
experiment was calculated to contain one percent ephedrine by 
laboratory analysis. The laboratory report refers to a common ``street 
method'' for manufacturing methamphetamine. However, the sponsored 
experiment using this supplement was not successful in producing 
methamphetamine.
    The comment concludes that the products described are 
representative of the formulations marketed by the dietary supplement 
industry, each containing less than five percent (by weight) ephedrine/
pseudoephedrine. DEA agrees that those products containing less than 
five percent ephedrine, as represented by the label information 
provided to DEA, are not likely to be used in illicit laboratory 
operations. Therefore DEA has decided to raise the concentration limit 
for ephedrine/pseudoephedrine to five percent. For encapsulated 
products, the weight of the capsule is included in making this 
calculation.
Request for Increase in the Ephedrine Concentration Limit
    One commentor requested that the concentration limit be raised to 
six percent for ephedrine, so that most of the existing ephedrine 
containing dietary supplement products would be exempt. Additionally 
the commentor recommended that DEA automatically exempt ephedra dietary 
supplements that contain multiple ingredients.
    The commentor acknowledged that significant problems existed with 
some manufacturers ``spiking'' products with synthetically produced 
ephedrine. Although the commentor states that they believe this 
practice has been mostly corrected, DEA must consider the likelihood of 
such practices. Voluntary compliance with standards of an organization 
or any special interest group can not prevent unscrupulous persons from 
distributing mixtures desired by traffickers. Without a concentration 
limit, products can be marketed as dietary supplements that are 
``spiked'' to contain high levels of ephedrine with minimal additional 
ingredients. These formulations can be legally marketed as dietary 
supplements and be desirable to traffickers.
    In another comment, a request was made to set the concentration 
limit to five percent. That comment states that multiple component 
dietary supplements containing ephedra alkaloids should be exempt at 
the five percent concentration limit for ephedrine and pseudoephedrine.
    DEA is aware that bulk ephedra extract contains from six to eight 
percent ephedrine alkaloids. Raising the concentration limit to six 
percent for ephedrine would cause only those bulk mixtures that contain 
ephedrine alkaloids above six percent to be regulated.
    DEA is aware that methamphetamine can be produced from ephedrine/
pseudoephedrine when extracted directly from the raw plant material. A 
concentrate of this material would act as a more practical source for 
methamphetamine precursor. Therefore, DEA decided to regulate chemical 
mixtures consisting of bulk ephedra extract as a listed chemical. The 
ephedra extract typically has a concentration of ephedrine alkaloids of 
6 percent or more. Therefore, DEA will exempt up to five percent 
ephedrine/pseudoephedrine contained in mixtures. That concentration 
limit is expected to exempt the vast majority of dietary supplements 
containing ephedrine/pseudoephedrine while allowing bulk ephedra 
extract to be treated as a regulated chemical.

Comments Pertaining to the Application Process

Single Application for Group Exemption
    Three persons commented on the application process as being limited 
because it requires a separate application for each mixture. They 
suggest that the application process should account for a group or 
family of mixtures and allow for variation, sometimes necessary to meet 
customer needs, without having to reapply for exemption.

[[Page 23201]]

    DEA intended to allow group exemption by application. A group is 
defined as those formulations having identical function and containing 
the same listed chemical(s). The Notice of Proposed Rulemaking states 
(63 FR 49511) ``The application may be submitted for a single mixture 
or a group of mixtures containing the same listed chemical at equal 
concentration with variations in the concentration of the other non-
listed chemicals in the mixture. Consideration will also be given to 
applications for mixtures in which the concentration of the listed 
chemical varies without regard to the specific concentrations of the 
other non-listed chemicals in the mixture. In either group, variation 
of the concentration of any chemical within the mixture that will 
result in a change in the function of the mixture will disqualify the 
mixture from the group.''
    DEA will address below the shortcoming in the proposed Sec.  
1310.13 that does not clearly establish group exemption. In addition, 
DEA shall establish that a single formulation may be granted an 
exemption while allowing variation in the formulation without the need 
to reapply. This is in anticipation that reformulation may be necessary 
to meet a customer's needs. Variation may be for listed and non-listed 
chemicals.
    A group of mixtures may be exempted within a single application. 
However, not all formulations are required to have the same non-listed 
chemicals to be included in a group. A group application may be 
submitted to include several formulations being marketed simultaneously 
or for a single product that is reformulated within specified 
concentration ranges. The latter may be for a custom application that 
requires adjusting the properties for optimum performance. Therefore, 
reapplication will not be necessary for new formulations that fall 
within a stated concentration range. The Administrator may determine 
that a specific mixture does not qualify as part of a group, and that 
one or more mixtures submitted as part of a group does not qualify for 
exemption.
    The usefulness of a mixture in clandestine operations depends on 
the number, type and concentrations of chemicals in the mixture. 
Therefore, an application for group exemption will identify both listed 
and non-listed components as well as their concentrations. A new 
application will not be necessary if a formulation is added to the 
group that contains the listed and non-listed chemicals within the 
concentration range specified in the original application. DEA must be 
notified in writing if the manufacturer adds a new mixture to the 
group.
    DEA must be informed if a qualitative change, not indicated on the 
original application, removes non-listed chemical(s) from a formulation 
exempt under a group. This is necessary to prevent mixtures being 
altered from an unusable state, as evaluated in the application, to a 
mixture that can be used by traffickers. If such a change (i.e., 
removal of non-listed chemical(s) from the formulation) renders the 
mixture valuable to traffickers, DEA can remove the exemption for that 
member of the group. DEA must be informed of such a change; however, a 
new application will not be necessary. DEA will either add the new 
formulation to the group or deny exempt status for that particular 
formulation. Section 1310.13 will be modified to reflect this and other 
conditions mentioned above.
Applicability of Exemption to Manufacturers
    Two comments requested that once a mixture is granted an exemption 
it should apply to all manufacturers of the same mixture. DEA proposed 
that all manufacturers apply separately. This requirement was proposed 
for several different reasons.
    DEA requires that a manufacturer submit the exact formulation when 
applying for an exemption. That is necessary to properly evaluate the 
mixture. Manufacturers of a similar product could not know if their 
formulation is the same as an exempted mixture unless the formulation 
is made public. Since some formulations are assumed to be trade 
secrets, DEA cannot reveal those formulations.
    Exempt chemical mixtures will be made public by publication in the 
Federal Register. Exempt formulations will be maintained in a Table in 
the Code of Federal Regulations. DEA, however, will only publish those 
formulations that the manufacturer allows to be made public. Due to the 
complexity of multiple ingredient formulations, such a Table may become 
unreasonably large.
    DEA will therefore require that each manufacturer apply for 
exemption by the application process. However, manufacturers may submit 
a joint application where each manufacturer listed in the application 
formulates the same mixture. All manufacturers listed in the 
application will obtain a decision from DEA regarding the regulatory 
status of the mixture. Also, a manufacturer that suspects that they 
formulate a mixture similar to one granted exemption status may inform 
DEA that a similar formulation has already been evaluated by DEA.
    Once a mixture is exempted, all downstream distributions for that 
formulation are exempt from regulation. Persons will not be regulated 
if they repackage and distribute a mixture exempted by the application 
process.
Time Period for Application Processing
    Three commentors suggested that a 21-day deadline be established to 
determine whether a mixture is exempt by the application process. One 
person suggested that a 5-day deadline be imposed for approval of the 
application. A time frame was requested so manufacturers could 
establish internal compliance procedures before shipments are made.
    While DEA will attempt to expedite the review of each application, 
it is not practical to establish a time limit for determining whether a 
mixture or a mixture group is exempt. The time to determine the status 
of an individual application is dependent on several variables that can 
not be controlled. Factors include the number of applications received, 
the number of mixtures contained in an application, the possible need 
to obtain additional technical information from the applicant, the 
possible need to obtain additional internal technical information on 
chemicals in the mixture and to analyze all factors. These and other 
factors make a time limit impractical.

III. Final Rule Provisions

Upon Publication of the Final Notice, What Specific Requirements Will 
Apply to Regulated Chemical Mixtures Containing the 6 Chemicals?

    A chemical mixture (other than the category of products consisting 
of unaltered harvested plant material) that contains ephedrine, N-
methylephedrine, N-methylpseudoephedrine, norpseudoephedrine, 
phenylpropanolamine, or pseudoephedrine above the concentration limit 
as defined in the ``Table of Concentration Limits'' will be treated as 
a List I chemical. Transactions that meet or exceed the cumulative 
monthly threshold for the listed chemical shall be regulated 
transactions. Persons interested in handling a regulated mixture must 
comply with the following:
    Registration. Any person who distributes, imports or exports a 
regulated mixture, or proposes to engage in such activities, or is a 
broker or trader in an international transaction (as defined in 21 
U.S.C. 802(42)), with

[[Page 23202]]

respect to a regulated mixture containing a List I chemical, shall 
obtain a registration pursuant to the CSA (21 U.S.C. 822). Regulations 
describing registration for list I handlers are set forth in 21 CFR 
part 1309.
    Separate registration is required for retail distribution, non-
retail distribution, importing, and exporting. A separate registration 
is required for each principal place of business at one general 
physical location where list I chemicals are distributed, imported, or 
exported by a person (21 CFR 1309.23). Effective June 30, 2003, any 
person distributing, importing, exporting or serving as a broker or 
trader in an international transaction involving any amount of a 
regulated mixture will become subject to the registration requirement 
under the CSA. DEA recognizes, however, that it is not possible for 
persons who are subject to the registration requirement to immediately 
complete and submit an application for registration and for DEA to 
immediately issue registrations for those activities. Therefore, in 
order to allow continued legitimate commerce in regulated mixtures, DEA 
is establishing in 21 CFR 1310.09 a temporary exemption from the 
registration requirement for persons desiring to engage in activities 
with regulated mixtures that are subject to registration requirements, 
provided that DEA receives a properly completed application for 
registration on or before June 30, 2003. The temporary exemption for 
such persons will remain in effect until DEA takes final action on 
their application for registration.
    Any person whose application for exemption is subsequently denied 
by DEA must obtain a registration with DEA. A temporary exemption from 
the registration requirement will also be provided for these persons, 
provided that DEA receives a properly completed application for 
registration on or before 30 days following the date of official DEA 
notification that the application for exemption has not been approved. 
The temporary exemption for such persons will remain in effect until 
DEA takes final action on their registration application.
    The temporary exemption applies solely to the registration 
requirement; all other chemical control requirements, including 
recordkeeping and reporting, are effective on June 2, 2003. Therefore, 
all transactions of the chemical mixture will be regulated, if at or 
above threshold, while an application for registration or exemption is 
pending. This is necessary because not regulating these transactions 
could result in increased diversion of chemicals desirable to drug 
traffickers.
    Additionally, the temporary exemption does not suspend applicable 
federal criminal laws relating to the regulated mixture, nor does it 
supersede state or local laws or regulations. All handlers of a 
regulated mixture must comply with applicable state and local 
requirements in addition to the CSA regulatory controls.
    Records and Reports. The CSA (21 U.S.C. 830) requires certain 
records to be kept and reports to be made involving listed chemicals. 
Regulations describing recordkeeping and reporting requirements are set 
forth in 21 CFR part 1310. A record must be made and maintained for two 
years after the date of a regulated transaction involving a list I 
chemical. Only a distribution, receipt, sale, importation, exportation, 
brokerage or trade of a regulated mixture above the established 
threshold is a regulated transaction (21 CFR 1300.02(b)(28)).
    Each regulated bulk manufacturer of a regulated mixture shall 
submit manufacturing, inventory and use data on an annual basis (21 CFR 
1310.05(d)). Bulk manufacturers producing the mixture solely for 
internal consumption, e.g. formulating a nonregulated mixture, are not 
required to submit this information. Existing standard industry reports 
containing the required information are acceptable, provided the 
information is readily retrievable from the report.
    21 CFR 1310.05 requires that each regulated person shall report to 
DEA any regulated transaction involving an extraordinary quantity, an 
uncommon method of payment or delivery, or any other circumstance that 
causes the regulated person to believe that the listed chemical will be 
used in violation of the CSA.
    Imports/Exports. All import/exports and brokered transactions of 
regulated mixtures shall comply with the CSA (21 U.S.C. 957 and 971). 
Regulations for importation and exportation of list I chemicals are 
described in 21 CFR part 1313. Separate registration is necessary for 
each activity (21 CFR part 1309.22).
    Administrative Inspection. Places, including factories, warehouses, 
or other establishments and conveyances, where regulated persons may 
lawfully hold, manufacture, or distribute, dispense, administer, or 
otherwise dispose of a regulated mixture or where records relating to 
those activities are maintained, are controlled premises as defined in 
21 CFR 1316.02(c). The CSA (21 U.S.C. 880) allows for administrative 
inspections of these controlled premises as provided in 21 CFR part 
1316 subpart A.

Regulatory Certifications

Regulatory Flexibility Act

    DEA, pursuant to 21 U.S.C. 802(39)(A)(v), is defining criteria for 
the exemption of chemical mixtures containing one or more of the List I 
chemicals ephedrine, N-methylephedrine, N-methylpseudoephedrine, 
norpseudoephedrine, phenylpropanolamine, and pseudoephedrine from 
regulatory control. To implement an exemption, a concentration limit is 
placed on each chemical, or combination of chemicals, which defines its 
regulatory status. In addition, an application process is established 
to exempt chemical mixtures, not automatically exempt by these 
provisions, from the regulatory process.
    DEA has determined that dietary supplements, including bulk 
material used to formulate these supplements, are the principle 
chemical mixtures that utilize ephedrine and pseudoephedrine. While DEA 
is aware that some dietary supplements are sources for methamphetamine 
precursors, DEA is also aware that most of these supplements are not 
viable sources for diversion of precursor chemicals.
    DEA sought information from the affected industry prior to 
publishing the Proposed Rule to exempt chemical mixtures. Information 
gathered prior to drafting a proposed rule indicated that the majority 
of chemical mixtures most likely to be affected contain not more than 
1.2 percent ephedrine. To ensure that most legitimately marketed 
dietary supplements are not regulated, DEA proposed a two percent 
concentration limit on ephedrine/pseudoephedrine. This amount was 
greater than the highest concentration of ephedrine/pseudoephedrine in 
the final product, as related to DEA by the industry.
    However, a comment received in response to the NPRM suggested that 
the percent concentration of ephedrine and pseudoephedrine be raised 
from two percent to five percent. The commentor states that it 
represents individual member companies with hundreds of thousands of 
independent distributors. One member company alone is said to have over 
100,000 distributors. The commentor suspects that its members will be 
regulated if a two percent concentration limit is finalized. 
Registration costs for this number of new registrants would result in a 
significant regulatory action.

[[Page 23203]]

    This industry is comprised mainly of small businesses, as defined 
by U.S. Small Business Administration (SBA) regulations (13 CFR 
121.201). However, DEA is finalizing the concentration limit at a level 
suggested by the commentor, which will not require registration by 
these hundreds of thousands of businesses and distributors. In 
addition, other industry representatives have informed DEA that the 
alkaloid concentration of most dietary supplements is less than two 
percent. Therefore, DEA concludes that the majority of dietary 
supplements will be exempt from regulatory provisions of the CSA if a 
five percent concentration limit for ephedrine/pseudoephedrine is 
established.
    The commentor informed DEA that there are approximately 12 
importers and approximately six manufacturers of bulk ephedra. A bulk 
manufacturing process may involve taking the natural ephedra extract 
and spiking it with ephedrine hydrochloride. Therefore, DEA will assume 
that all six manufacturers will need to register, although some may 
qualify as end-users and not need to register.
    DEA is also finalizing in this Rulemaking a process by which 
manufacturers may request exemption from DEA for specific products. 
This process will allow chemical mixtures not automatically exempt by 
the concentration limit to be considered for exempt status under the 
CSA. This will ensure that certain chemical mixtures, including dietary 
supplements having formulations useless to traffickers, but not 
automatically exempt by provision, can be granted exempt status.
    Therefore, in accordance with the Regulatory Flexibility Act (5 
U.S.C. 605(b)), the Acting Administrator has reviewed this Final Rule 
and by approving it certifies that this regulation will not have a 
significant economic impact upon a substantial number of small 
entities.

Executive Order 12866

    This regulation has been drafted and reviewed in accordance with 
Executive Order 12866, section 1(b), Principles of Regulation. DEA has 
determined that this rule is a ``significant regulatory action'' under 
Executive Order 12866, section 3(f), Regulatory Planning and Review, 
and accordingly this rule has been reviewed by the Office of Management 
and Budget.

Executive Order 12988

    This regulation meets the applicable standards set forth in 
sections 3(a) and 3(b)(2) of Executive Order 12988.

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 
$100,000,000 or more 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.

Small Business Regulatory Enforcement Fairness Act of 1996

    This rule is not a major rule as defined by Section 804 of the 
Small Business Regulatory Enforcement Fairness Act of 1996. 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

21 CFR Part 1300

    Controlled substances, Definitions, Drug traffic control, List I 
and List II chemicals.

21 CFR Part 1310

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

0
For the reasons set out above, 21 CFR parts 1300 and 1310 are amended 
as follows:

PART 1300--[AMENDED]

0
1. The authority citation for part 1300 continues to read as follows:

    Authority: 21 U.S.C. 802, 871(b), 951, 958(f).
    2. Section 1300.02 is amended by revising paragraph (b)(28)(i)(E) 
to read as follows:


Sec.  1300.02  Definitions relating to listed chemicals.

* * * * *
    (b) * * *
    (28) * * *
    (i) * * *
    (E) Any transaction in a chemical mixture designated in Sec.  
1310.12 and Sec.  1310.13 that the Administrator has exempted from 
regulation.
* * * * *

PART 1310--[AMENDED]

0
1. The authority citation for part 1310 continues to read as follows:

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

0
2. Section 1310.04 is amended by adding a new paragraph (h) to read as 
follows:


Sec.  1310.04  Maintenance of records.

* * * * *
    (h) The thresholds and conditions in paragraphs (f) and (g) of this 
section will apply to transactions involving regulated chemical 
mixtures. All regulated chemical mixtures containing List I chemicals 
will have the threshold determined by taking the weight of the listed 
chemical in the regulated mixture.

0
3. Section 1310.09 is amended by adding a new paragraph (e) to read as 
follows:


Sec.  1310.09  Temporary exemption from registration.

* * * * *
    (e) Each person required by section 302 of the Act (21 U.S.C. 822) 
to obtain a registration to distribute, import, or export regulated 
chemical mixtures which contain ephedrine, N-methylephedrine, N-
methylpseudoephedrine, norpseudoephedrine, phenylpropanolamine, and/or 
pseudoephedrine, pursuant to Sec. Sec.  1310.12 and 1310.13, is 
temporarily exempted from the registration requirement, provided that 
DEA receives a proper application for registration or application for 
exemption on or before June 30, 2003. 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. Any person who distributes, imports or exports a 
chemical mixture whose application for exemption is subsequently denied 
by DEA must obtain a registration with DEA. A temporary exemption from 
the registration requirement will also be provided for these persons, 
provided that DEA receives a properly completed application for 
registration on or before 30 days following the date of official DEA 
notification that the application for

[[Page 23204]]

exemption has not been approved. The temporary exemption for such 
persons will remain in effect until DEA takes final action on their 
registration application.

0
4. A new section 1310.12 is added to read as follows:


Sec.  1310.12  Exempt chemical mixtures.

    (a) The chemical mixtures meeting the criteria in paragraphs (c) or 
(d) of this section are exempted by the Administrator from application 
of sections 302, 303, 310, 1007, and 1008 of the Act (21 U.S.C. 822, 
823, 830, 957 and 958) to the extent described in paragraphs (b) and 
(c) of this section.
    (b) No exemption granted pursuant to this Sec.  1310.12 or Sec.  
1310.13 affects the criminal liability for illegal possession, 
distribution, exportation, or importation of listed chemicals contained 
in the exempt chemical mixture or the civil liability for unlawful acts 
related to exempt chemical mixtures, including distribution in 
violation of 21 U.S.C. 842(a)(11).
    (c) Mixtures containing a listed chemical in concentrations equal 
to or less than those specified in the ``Table of Concentration 
Limits'' are designated as exempt chemical mixtures for the purpose set 
forth in this section. The concentration is determined for liquid-
liquid mixtures by using the volume or weight and for mixtures 
containing solids or gasses by using the unit of weight.

                                          Table of Concentration Limits
----------------------------------------------------------------------------------------------------------------
                                     DEA
        List I chemicals           chemical        Concentration                  Special conditions
                                   code No.          (percent)
----------------------------------------------------------------------------------------------------------------
Ephedrine, its salts, optical           8113  5% by Weight, (weight   Concentration based on any combination of
 isomers, and salts of optical                 includes capsule, if    ephedrine, pseudoephedrine, and their
 isomers.                                      any).                   salts, optical isomers and salts of
                                                                       optical isomers
N-Methylephedrine, its salts,           8115  0.1% by Weight,         Concentration based on any combination of
 optical isomers, and salts of                 (weight includes        N-methylephedrine, N-
 optical isomers.                              capsule, if any).       methylpseudoephedrine and their salts,
                                                                       optical isomers and salts of optical
                                                                       isomers
N-methylpseudoephedrine, its            8119  0.1% by Weight (weight  Concentration based on any combination of
 salts, optical isomers, and                   includes capsule, if    N-methylpseudoephedrine, N-
 salts of optical isomers.                     any).                   methylephedrine, and their salts, optical
                                                                       isomers and salts of optical isomers
Norpseudoephedrine, its salts,          8317  0.6% by Weight (weight  Concentration based on any combination of
 optical isomers, and salts of                 includes capsule, if    norpseudoephedrine, phenylpropanolamine
 optical isomers.                              any).                   and their salts, optical isomers and
                                                                       salts of optical isomers
Phenylpropanolamine, its salts,         1225  0.6% by Weight (weight  Concentration based on any combination of
 optical isomers, and salts of                 includes capsule, if    phenylpropanolamine, norpseudoephedrine
 optical isomers.                              any).                   and their salts, optical isomers and
                                                                       salts of optical isomers
Pseudoephedrine, its salts,             8112  5% by Weight, (weight   Concentration based on any combination of
 optical isomers, and salts of                 includes capsule, if    pseudoephedrine, ephedrine, and their
 optical isomers.                              any).                   salts, optical isomers and salts of
                                                                       optical isomers
----------------------------------------------------------------------------------------------------------------

    (d) The following categories of chemical mixtures are automatically 
exempt from the provisions of the Controlled Substances Act as 
described in paragraph (a) of this section:
    (1) Harvested plant material that contains ephedrine, N-
methylephedrine, N-methylpseudoephedrine, norpseudoephedrine, 
phenylpropanolamine, and/or pseudoephedrine, that is in its natural 
state or has been processed in a way (such as grinding, chopping, 
mulching or cutting) that preserves the natural constituents in the 
ratios that are found in the plant's natural state. Plant material 
subjected to chemical or physical extraction, concentration, chemical 
reaction, or other treatment that alters the plant's natural 
constituents or the ratios of the plant constituents are not exempt.
    (2) [Reserved]
    (e) The Administrator may, at any time, terminate or modify the 
exemption for any chemical mixture which has been granted an exemption 
pursuant to the concentration limits as specified in paragraph (c) of 
this section or pursuant to the category exemption as specified in 
paragraph (d) of this section. In terminating or modifying an 
exemption, the Administrator shall issue, and publish in the Federal 
Register, notification of the removal of an exemption for a product or 
group of products for which evidence of diversion has been found, as 
well as the date on which the termination of exemption shall take 
effect. The Administrator shall permit any interested party to file 
written comments on or objections to the order within 60 days of the 
date of publication of the order in the Federal Register. If any such 
comments or objections raise significant issues regarding any finding 
of fact or conclusion of law upon which the order is based, the 
Administrator shall immediately suspend the effectiveness of the order 
until he may reconsider the order in light of comments and objections 
filed. Thereafter, the Administrator shall reinstate, terminate, or 
amend the original order as determined appropriate.
    (f) The Administrator may modify any part of the criteria for 
exemption as specified in paragraphs (c) and (d) of this section upon 
evidence of diversion or attempted diversion. In doing so, the 
Administrator shall issue and publish a Notice of Proposed Rulemaking 
in the Federal Register. The Administrator shall permit any interested 
persons to file written comments on or objections to the proposal. 
After considering any comments or objections filed, the Administrator 
shall publish in the Federal Register a final order.

0
5. A new Sec.  1310.13 is added to read as follows:


Sec.  1310.13  Exemption of chemical mixtures; application.

    (a) The Administrator may, by publication of a Final Rule in the 
Federal Register, exempt from the application of all or any part of the 
Act a chemical mixture consisting of two or more chemical components, 
at least one of which is not a List I or List II chemical, if:
    (1) The mixture is formulated in such a way that it cannot be 
easily used in the illicit production of a controlled substance; and
    (2) The listed chemical or chemicals contained in the chemical 
mixture cannot be readily recovered.

[[Page 23205]]

    (b) Any manufacturer seeking an exemption for a chemical mixture, 
not exempt under Sec.  1310.12, from the application of all or any part 
of the Act, may apply to the Administrator, Drug Enforcement 
Administration, Department of Justice, Washington, DC 20537.
    (c) An application for exemption under this section shall contain 
the following information:
    (1) The name, address, and registration number, if any, of the 
applicant;
    (2) The date of the application;
    (3) The exact trade name(s) of the applicant's chemical mixture 
and:
    (i) If the applicant formulates or manufactures the chemical 
mixture for other entities, the exact trade names of the chemical 
mixtures and the names of the entities for which the chemical mixtures 
were prepared; and
    (ii) If a group of mixtures (e.g. formulations having identical 
function and containing the same listed chemical(s)), the information 
required in paragraph (c)(3)(i) of this section and a brief narrative 
of their use.
    (4) (i) The complete qualitative and quantitative composition of 
the chemical mixture (including all listed and all non-listed 
chemicals); or
    (ii) If a group of mixtures, the concentration range for the listed 
chemical and a listing of all non-listed chemicals with respective 
concentration ranges.
    (5) (i) The chemical and physical properties of the mixture and how 
they differ from the properties of the listed chemical or chemicals; 
and
    (ii) If a group of mixtures, how the group's properties differ from 
the properties of the listed chemical.
    (6) A statement that the applicant believes justifies an exemption 
for the chemical mixture or group of mixtures. The statement must 
explain how the chemical mixture(s) meets the exemption criteria set 
forth in paragraph (a) of this section.
    (7) A statement that the applicant accepts the right of the 
Administrator to terminate exemption from regulation for the chemical 
mixture(s) granted exemption under this section.
    (8) The identification of any information on the application that 
is considered by the applicant to be a trade secret or confidential and 
entitled to protection under U.S. laws restricting the public 
disclosure of such information.
    (d) The Administrator may require the applicant to submit such 
additional documents or written statements of fact relevant to the 
application that he deems necessary for determining if the application 
should be granted.
    (e) Within 30 days after the receipt of an application for an 
exemption under this section, the Administrator will notify the 
applicant of acceptance or rejection of the application. If the 
application is not accepted, an explanation will be provided. The 
Administrator is not required to accept an application if any 
information required pursuant to paragraph (c) of this section or 
requested pursuant to paragraph (d) of this section is lacking or not 
readily understood. The applicant may, however, amend the application 
to meet the requirements of paragraphs (c) and (d) of this section. If 
the exemption is granted, the applicant shall be notified in writing 
and the Administrator shall issue, and publish in the Federal Register, 
an order on the application. This order shall specify the date on which 
it shall take effect. The Administrator shall permit any interested 
person to file written comments on or objections to the order. If any 
comments or objections raise significant issues regarding any findings 
of fact or conclusions of law upon which the order is based, the 
Administrator may suspend the effectiveness of the order until he has 
reconsidered the application in light of the comments and objections 
filed. Thereafter, the Administrator shall reinstate, terminate, or 
amend the original order as deemed appropriate.
    (f) The Administrator may, at any time, terminate or modify an 
exemption for any product pursuant to paragraph (e) of this section. In 
terminating or modifying an exemption, the Administrator shall issue, 
and publish in the Federal Register, notification of the removal of an 
exempt product or group of exempt products for which evidence of 
diversion has been found. This order shall specify the date on which 
the termination of exemption shall take effect. The Administrator shall 
permit any interested party to file written comments on or objections 
to the order within 60 days of the date of publication of the order in 
the Federal Register. If any such comments or objections raise 
significant issues regarding any finding of fact or conclusion of law 
upon which the order is based, the Administrator may suspend the 
effectiveness of the order until he has reconsidered the order in light 
of comments and objections filed. Thereafter, the Administrator shall 
reinstate, terminate, or amend the original order as determined 
appropriate.
    (g) A manufacturer of an exempted chemical mixture shall notify DEA 
in writing, of any change in the quantitative or qualitative 
composition of a chemical mixture that has been granted an exemption by 
application. Changes include those greater than the range of 
concentration given in the application or that remove non-listed 
chemical(s) given in the application as part of the formulation. A new 
application will be required only if reformulation results in a new 
product having a different commercial application or can no longer be 
defined as part of a group of exempted chemicals. DEA must be notified 
of reformulation at least 30 days in advance of marketing the 
reformulated mixture. For a change in name or other designation, code, 
or any identifier, a written notification is required. DEA must be 
notified of any changes at least 60 days in advance of the effective 
date for the change.
    (h) Each manufacturer seeking exemption must apply for such an 
exemption. A formulation granted exemption by publication in the 
Federal Register will not be exempted for all manufacturers.
    (i) The following chemical mixtures, in the form and quantity 
listed in the application submitted (indicated as the ``date'' ) are 
designated as exempt chemical mixtures for the purposes set forth in 
this section and are exempted by the Administrator from application of 
sections 302, 303, 310, 1007, and 1008 of the Act (21 U.S.C. 822, 823, 
830, 957 and 958):

                                            Exempt Chemical Mixtures
----------------------------------------------------------------------------------------------------------------
                      Manufacturer                        Product name \1\         Form               Date
----------------------------------------------------------------------------------------------------------------
[RESERVED]
----------------------------------------------------------------------------------------------------------------
\1\ Designate product line if a group.



[[Page 23206]]

    Dated: March 7, 2003.
John B. Brown III,
Acting Administrator.
[FR Doc. 03-10565 Filed 4-30-03; 8:45 am]
BILLING CODE 4410-09-P