[Federal Register Volume 68, Number 215 (Thursday, November 6, 2003)]
[Rules and Regulations]
[Pages 62735-62738]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-27889]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF JUSTICE

Drug Enforcement Administration

21 CFR Part 1310

[Docket No. DEA-176F]
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: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Drug Enforcement Administration is finalizing the Notice 
of Proposed Rulemaking (NPRM) published in the Federal Register on May 
8, 2003 (68 FR 24689). That NPRM proposed to conform DEA regulations to 
provisions of the National Defense Authorization Act which 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 reasonable cause to believe that such a sale would result 
in the illegal manufacture of a controlled substance. This final rule 
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.

EFFECTIVE DATE: December 8, 2003.

FOR FURTHER INFORMATION CONTACT: Patricia M. Good, Chief, Liaison and 
Policy Section, Office of Diversion Control, Drug Enforcement

[[Page 62736]]

Administration, Washington, DC 20537, Telephone: (202) 307-7297.

SUPPLEMENTARY INFORMATION:

Background

    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 the Drug Enforcement 
Administration (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).
    On May 8, 2003, DEA published a Notice in the Federal Register 
proposing to conform its regulations to the provisions of the National 
Defense Authorization Act (68 FR 24689). The rule proposed requiring 
Federal departments or agencies to 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.

Comments Received Regarding the May 8, 2003 Notice of Proposed 
Rulemaking

    DEA received no written comments regarding the Notice of Proposed 
Rulemaking published on May 8, 2003. Accordingly, this Notice of 
Proposed Rulemaking is being finalized here without change.

Chemicals Affected by These Implementing Regulations

    As stated in the NPRM, 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.

Requirements of This Final Rule

    By this final rule, a Federal department or agency is required to 
notify the Administrator of DEA in writing at least fifteen calendar 
days in advance of a proposed sale of chemicals covered by the Act. 
(DEA strongly encourages Federal departments or agencies to notify it 
further in advance if possible.) Written notification must 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 fifteen 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.

Factors Considered 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 Federal, 
state and local law; (3) the prior conviction record of the prospective 
bidder and end-user relating to controlled substances or to chemicals 
controlled under Federal or state laws; and (4) such other factors as 
may be relevant to and consistent with the public health and safety.

Recourse 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.

[[Page 62737]]

    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 Acting Deputy 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. This final 
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 Acting Deputy 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 regulatory 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, List I and List II chemicals, Reporting and 
recordkeeping requirements.

0
For the reasons set out above, 21 CFR part 1310 is amended as follows:

PART 1310--[AMENDED]

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

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


0
2. Part 1310 is 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 fifteen calendar days 
before the proposed sale is to take place. In order to facilitate the 
sale of chemicals from Federal departments' or agencies' stocks, 
Federal departments or agencies may wish to submit requests as far in 
advance of the fifteen 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 fifteen 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 Federal, 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

[[Page 62738]]

    (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: October 28, 2003.
Michele M. Leonhart,
Acting Deputy Administrator.
[FR Doc. 03-27889 Filed 11-5-03; 8:45 am]
BILLING CODE 4410-09-P