[Federal Register Volume 68, Number 89 (Thursday, May 8, 2003)]
[Proposed Rules]
[Pages 24689-24692]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-11393]


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DEPARTMENT OF JUSTICE

Drug Enforcement Administration

21 CFR Part 1310

[Docket No. DEA-176P]
RIN 1117-AA47


Sale by Federal Departments or Agencies of Chemicals Which Could 
Be Used in the Illicit Manufacture of Controlled Substances

AGENCY: Drug Enforcement Administration (DEA), Justice.

ACTION: Notice of proposed rulemaking.

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SUMMARY: DEA is proposing to conform its regulations to provisions of 
the National Defense Authorization Act. This Act provides that a 
Federal department or agency may not sell from its stocks any chemical 
which could be used in the manufacture of a controlled substance unless 
the Administrator of DEA certifies in writing that there is no

[[Page 24690]]

reasonable cause to believe that such a sale would result in the 
illegal manufacture of a controlled substance. This rulemaking codifies 
current practice established pursuant to statutory authority by which 
Federal agencies provide DEA with the opportunity to ensure that the 
sale of chemicals by them will not result in the illegal manufacture of 
controlled substances.

DATES: Written comments must be submitted on or before July 7, 2003.

ADDRESSES: Comments should be submitted to the Deputy Administrator, 
Drug Enforcement Administration, Washington, DC 20537, Attention: DEA 
Federal Register Representative/CCR.

FOR FURTHER INFORMATION CONTACT: Patricia M. Good, Chief, Liaison and 
Policy Section, Office of Diversion Control, Drug Enforcement 
Administration, Washington, DC 20537, Telephone: (202) 307-7297.

SUPPLEMENTARY INFORMATION: 

What Does the National Defense Authorization Act Require Federal 
Agencies To Do Before They May Sell Certain Chemicals?

    Section 520 of the National Defense Authorization Act (Pub. L. 104-
201) amended the Controlled Substances Act (CSA) to prohibit a Federal 
department or agency from selling from its stocks any chemical which, 
as determined by the Administrator of DEA, could be used in the 
manufacture of a controlled substance. However, the CSA as amended 
permits sales of such chemicals if the Administrator of DEA certifies 
in writing to the head of the selling Federal department or agency that 
there is no reasonable cause to believe that the sale of the chemical 
would result in the illegal manufacture of a controlled substance (21 
U.S.C. 890).

Why Is DEA Taking This Action?

    Since enactment of the National Defense Authorization Act in July 
1996, DEA has worked with Federal departments and agencies to ensure 
compliance. Now, DEA plans to codify in its regulations the current 
practice that has been established pursuant to this statutory authority 
and the experience that DEA has gained from implementing these 
provisions.

How Does This Regulation Impact Federal Departments or Agencies?

    This rule simply requires that the Federal department or agency 
notify DEA of the names of prospective bidders and end-users prior to 
the sale of chemicals which could be used in the manufacture of 
controlled substances. This notification will allow DEA to identify 
whether there is reasonable cause to believe that the sale of a 
specific chemical to a specific bidder or end-user would result in the 
illegal manufacture of a controlled substance. DEA will work with 
Federal departments and agencies to determine which chemicals could be 
used in the illicit manufacture of a controlled substance. To date, DEA 
has been contacted by only one Federal department or agency conducting 
sales of chemicals falling under the provisions of the Act, the 
Department of Defense (DOD). DEA has received the names of 
approximately fifty bidders and end-users from DOD and found, in every 
case, that there was no reasonable cause to believe that the sale of 
the specific chemical to the specific bidder and end-user would result 
in the illegal manufacture of a controlled substance. Therefore, DEA 
has certified each bidder and end-user whose name has been submitted by 
DOD to DEA.

What Chemicals Are Affected By These Implementing Regulations?

    These implementing regulations affect any chemical which DEA 
determines could be used in the illicit manufacture of a controlled 
substance. Chemicals that can be used in the manufacture of a 
controlled substance include, but are not limited to, all List I and 
List II chemicals as provided in 21 CFR 1310.02. Further, any chemicals 
mentioned in the DEA ``Special Surveillance List of Chemicals, 
Products, Materials and Equipment Used in the Clandestine Production of 
Controlled Substances or Listed Chemicals'' published, and updated from 
time to time, in the Federal Register (64 FR 25910, May 13, 1999; 
corrected at 64 FR 50541, Sept. 17, 1999) are affected by these 
regulations. Finally, any chemical which is neither a listed chemical 
nor is listed in the special surveillance list but which could be used 
in the illicit manufacture of a controlled substance is affected by 
these implementing regulations. Such chemicals could include, but are 
not limited to, those chemicals used in the direct illegal manufacture 
of a controlled substance, those chemicals used as cutting agents, and 
those chemicals used to process the controlled substance into a dosage 
form. DEA strongly recommends that any Federal department or agency 
considering the sale of any chemical from its stocks contact DEA to 
determine whether such chemical could be used in the illicit 
manufacture of a controlled substance as far in advance of the sale of 
such chemical as possible.

What Do These Implementing Regulations Require?

    DEA is proposing that a Federal department or agency notify the 
Administrator of DEA in writing at least 15 calendar days in advance of 
a proposed sale of chemicals covered by the Act. However, DEA strongly 
encourages Federal departments or agencies to notify it further in 
advance if possible.
    By this rule, DEA is proposing that the written notification be 
submitted on official agency letterhead to the Drug Enforcement 
Administration, Office of Diversion Control, Domestic Chemical Control 
Unit (ODID) Washington, DC 20537 and include: (1) The name and amount 
of the chemical to be sold; (2) the name and address of the prospective 
bidder(s); (3) the name and address of the potential end-user(s), in 
cases where a sale is being brokered; (4) point(s) of contact for the 
prospective bidder and end-user; and (5) the end use of the chemical.
    Within 15 calendar days from the date the written notification is 
received, DEA will respond in writing to the Federal department or 
agency certifying that there is, or is not, reasonable cause to believe 
that the sale of the specific chemical to the specific bidder and end-
user would result in the illegal manufacture of a controlled substance. 
The certification that there is no reasonable cause to believe that the 
sale of the specific chemical to the specific bidder and end-user would 
result in the illegal manufacture of a controlled substance will apply 
to future sales to the same prospective bidder and end-user for the 
same chemical for one calendar year unless DEA notifies the agency to 
the contrary in writing.

What Factors Will DEA Consider in Certifying a Bidder or End-User?

    In determining whether there is reasonable cause to believe that 
the sale of a specific chemical to a specific bidder or end-user would 
result in the illegal manufacture of a controlled substance, the 
Administrator will consider the following factors: (1) The prospective 
bidder's and end-user's past experience in the maintenance of effective 
controls against diversion of particular chemicals into other than 
legitimate medical, scientific, and industrial channels; (2) the 
prospective bidder's and end-user's compliance with applicable state 
and local law; (3) the prior conviction record of the prospective 
bidder and end-user relating to controlled substances or to chemicals

[[Page 24691]]

controlled under Federal or state laws; and (4) such other factors as 
may be relevant to and consistent with the public health and safety.

What Recourse Is Available to a Bidder or End-user if DEA Refuses To 
Certify a Prospective Bidder or End-User or Withdraws an Existing 
Certification?

    If the Administrator determines there is reasonable cause to 
believe the sale of a specific chemical to a specific bidder or end-
user would result in the illegal manufacture of a controlled substance 
and refuses to certify a prospective bidder or end-user, DEA will 
notify both the Federal department or agency and the prospective bidder 
and end-user in writing. The written notice to the prospective bidder 
and end-user will contain a statement of the legal and factual basis 
for certifying that there is reasonable cause to believe the sale of 
the specific chemical to that specific person would result in the 
illegal manufacture of a controlled substance. The prospective bidder 
and end-user may, within thirty calendar days of notification, submit 
written comments or objections to the Administrator, providing reasons 
and supporting documentation to contest the decision. The Administrator 
will take the written comments or objections under consideration and 
will either (1) provide a written statement that affirms the original 
decision is final and that provides reasons why the written comments or 
objections are overruled or are not considered; or (2) confirm the 
written response and certify the transaction, thereby reversing the 
original decision.
    If the Administrator determines that there is reasonable cause to 
believe that an existing certification must be withdrawn, DEA will 
notify both the Federal department or agency and the specific bidder 
and end-user in writing. The written notice to the specific bidder and 
end-user will contain a statement of the legal and factual basis for 
certifying that there is reasonable cause to believe the certification 
must be withdrawn. The bidder and end-user may, within thirty calendar 
days of notification, submit written comments or objections to the 
Administrator, providing reasons and supporting documentation to 
contest the decision. The Administrator will take the written comments 
or objections under consideration and will either (1) provide a written 
statement that affirms the original decision is final and that provides 
reasons why the written comments or objections are overruled or are not 
considered; or (2) confirm the written response and reinstate a 
certification, thereby reversing the original decision.

Regulatory Certifications

Regulatory Flexibility Act

    The Administrator hereby certifies that this rulemaking has been 
drafted 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 on a 
substantial number of small entities. The rule only affects Federal 
departments or agencies which plan to sell from their stocks chemicals 
which could be used in the manufacture of a controlled substance. The 
rule provides DEA with advance notice of the sale and the opportunity 
to prevent sales of chemicals which could result in the illicit 
manufacture of controlled substances.

Executive Order 12866

    The Administrator further certifies that this rulemaking has been 
drafted in accordance with the principles in Executive Order 12866, 
section 1(b). DEA has determined that this is not a significant 
rulemaking action. Therefore, this action has not 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 Civil Justice 
Reform.

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 
million 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 million or 
more; a major increase in costs or prices; or significant adverse 
effects on competition, employment, investment, productivity, 
innovation, or on the ability of United States-based companies to 
compete with foreign-based companies in domestic and export markets.

List of Subjects in 21 CFR Part 1310

    Drug traffic control, Exports, Imports, Reporting and recordkeeping 
requirements.
    For the reasons set out above, 21 CFR Part 1310 is proposed to be 
amended as follows:

PART 1310--[AMENDED]

    1. The authority citation for Part 1310 is proposed to be revised 
to read as follows:

    Authority: 21 U.S.C. 802, 830, 871(b), 890.

    2. Part 1310 is proposed to be amended by adding Sec. 1310.21 to 
read as follows:


Sec.  1310.21  Sale by Federal departments or agencies of chemicals 
which could be used to manufacture controlled substances.

    (a) A Federal department or agency may not sell from the stocks of 
the department or agency any chemical which, as determined by the 
Administrator of the Drug Enforcement Administration, could be used in 
the manufacture of a controlled substance, unless the Administrator 
certifies in writing to the head of the department or agency that there 
is no reasonable cause to believe that the sale of the specific 
chemical to a specific person would result in the illegal manufacture 
of a controlled substance. For purposes of this requirement, reasonable 
cause to believe means that the Administration has knowledge of facts 
which would cause a reasonable person to reasonably conclude that a 
chemical would be diverted to the illegal manufacture of a controlled 
substance.
    (b) A Federal department or agency must request certification by 
submitting a written request to the Administrator, Drug Enforcement 
Administration, Washington, DC 20537, Attention: Domestic Chemical 
Control Unit (ODID). A request for certification may be transmitted 
directly to the Drug Enforcement Administration, Domestic Chemical 
Control Unit through electronic facsimile media. A request for 
certification must be submitted no later than 15 calendar days before 
the proposed sale is to take place. In order to facilitate the sale of 
chemicals from

[[Page 24692]]

Federal departments' or agencies' stocks, Federal departments or 
agencies may wish to submit requests as far in advance of the 15 
calendar days as possible. The written notification of the proposed 
sale must include:
    (1) The name and amount of the chemical to be sold;
    (2) The name and address of the prospective bidder;
    (3) The name and address of the prospective end-user, in cases 
where a sale is being brokered;
    (4) Point(s) of contact for the prospective bidder and, where 
appropriate, prospective end-user; and
    (5) The end use of the chemical.
    (c) Within 15 calendar days of receipt of a request for 
certification, the Administrator will certify in writing to the head of 
the Federal department or agency that there is, or is not, reasonable 
cause to believe that the sale of the specific chemical to the specific 
bidder and end-user would result in the illegal manufacture of a 
controlled substance. In making this determination, the following 
factors must be considered:
    (1) Past experience of the prospective bidder or end-user in the 
maintenance of effective controls against diversion of listed chemicals 
into other than legitimate medical, scientific, and industrial 
channels;
    (2) Compliance of the prospective bidder or end-user with 
applicable state and local law;
    (3) Prior conviction record of the prospective bidder or end-user 
relating to listed chemicals or controlled substances under Federal or 
state laws; and
    (4) Such other factors as may be relevant to and consistent with 
the public health and safety.
    (d) If the Administrator certifies to the head of a Federal 
department or agency that there is no reasonable cause to believe that 
the sale of a specific chemical to a prospective bidder and end-user 
will result in the illegal manufacture of a controlled substance, that 
certification will be effective for one year from the date of issuance 
with respect to further sales of the same chemical to the same 
prospective bidder and end-user, unless the Administrator notifies the 
head of the Federal department or agency in writing that the 
certification is withdrawn. If the certification is withdrawn, DEA will 
also provide written notice to the bidder and end-user, which will 
contain a statement of the legal and factual basis for this 
determination.
    (e) If the Administrator determines there is reasonable cause to 
believe the sale of the specific chemical to a specific bidder and end-
user would result in the illegal manufacture of a controlled substance, 
DEA will provide written notice to the head of a Federal department or 
agency refusing to certify the proposed sale under the authority of 21 
U.S.C. 890. DEA also will provide, within fifteen calendar days of 
receiving a request for certification from a Federal department or 
agency, the same written notice to the prospective bidder and end-user, 
and this notice also will contain a statement of the legal and factual 
basis for the refusal of certification. The prospective bidder and end-
user may, within thirty calendar days of receipt of notification of the 
refusal, submit written comments or written objections to the 
Administrator's refusal. At the same time, the prospective bidder and 
end-user also may provide supporting documentation to contest the 
Administrator's refusal. If such written comments or written objections 
raise issues regarding any finding of fact or conclusion of law upon 
which the refusal is based, the Administrator will reconsider the 
refusal of the proposed sale in light of the written comments or 
written objections filed. Thereafter, within a reasonable time, the 
Administrator will withdraw or affirm the original refusal of 
certification as he determines appropriate. The Administrator will 
provide written reasons for any affirmation of the original refusal. 
Such affirmation of the original refusal will constitute a final 
decision for purposes of judicial review under 21 U.S.C. 877.
    (f) If the Administrator determines there is reasonable cause to 
believe that an existing certification should be withdrawn, DEA will 
provide written notice to the head of a Federal department or agency of 
such withdrawal under the authority of 21 U.S.C. 890. DEA also will 
provide, within fifteen calendar days of withdrawal of an existing 
certification, the same written notice to the bidder and end-user, and 
this notice also will contain a statement of the legal and factual 
basis for the withdrawal. The bidder and end-user may, within thirty 
calendar days of receipt of notification of the withdrawal of the 
existing certification, submit written comments or written objections 
to the Administrator's withdrawal. At the same time, the bidder and 
end-user also may provide supporting documentation to contest the 
Administrator's withdrawal. If such written comments or written 
objections raise issues regarding any finding of fact or conclusion of 
law upon which the withdrawal of the existing certification is based, 
the Administrator will reconsider the withdrawal of the existing 
certification in light of the written comments or written objections 
filed. Thereafter, within a reasonable time, the Administrator will 
withdraw or affirm the original withdrawal of the existing 
certification as he determines appropriate. The Administrator will 
provide written reasons for any affirmation of the original withdrawal 
of the existing certification. Such affirmation of the original 
withdrawal of the existing certification will constitute a final 
decision for purposes of judicial review under 21 U.S.C. 877.

    Dated: April 25, 2003.
John B. Brown III,
Acting Administrator.
[FR Doc. 03-11393 Filed 5-7-03; 8:45 am]
BILLING CODE 4410-09-P