[Federal Register Volume 70, Number 39 (Tuesday, March 1, 2005)]
[Proposed Rules]
[Pages 9889-9892]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-3913]


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DEPARTMENT OF JUSTICE

Drug Enforcement Administration

21 CFR Part 1310

[Docket No. DEA-254P]
RIN 1117-AA90


Control of Sodium Permanganate as a List II Chemical

AGENCY: Drug Enforcement Administration (DEA), Justice.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Controlled Substances Act (CSA) provides the Attorney 
General with the authority to specify, by regulation, additional 
chemicals as ``List II'' chemicals if they are used in the manufacture 
of a controlled substance in violation of the CSA. The Drug Enforcement 
Administration (DEA) is proposing the addition of sodium permanganate 
as a List II chemical because of its direct substitutability for 
potassium permanganate (a List II chemical) in the illicit production 
of cocaine.
    As a List II chemical, handlers of sodium permanganate would be 
subject to CSA chemical regulatory controls including recordkeeping, 
reporting, and import/export requirements. DEA has determined that 
these controls are necessary to prevent the diversion of this chemical 
to cocaine laboratories.
    DEA is also proposing that a cumulative threshold of 55 kilograms 
and 500 kilograms be established (respectively) for domestic and 
international transactions. As such, all transactions which meet or 
exceed these quantities (in a calendar month) shall be considered 
regulated transactions, subject to recordkeeping, reporting and/or 
import/export notification requirements. Additionally DEA is proposing 
that sodium permanganate chemical mixtures having less than or equal to 
15 percent sodium permanganate shall qualify for automatic exemption 
from CSA chemical regulatory controls pursuant to 21 CFR part 1310.
    All handlers of the List II chemical sodium permanganate would also 
be subject to the applicable civil and criminal penalty provisions 
found in 21 U.S.C. 841, 842, 843, 959 and 960.

DATES: Written comments must be postmarked, and electronic comments 
must be sent, on or before May 2, 2005.

ADDRESSES: To ensure proper handling of comments, please reference 
``Docket No. DEA-254'' on all written and electronic correspondence. 
Written comments being sent via regular mail should be sent to the 
Deputy Administrator, Drug Enforcement Administration, Washington, DC 
20537, Attention: DEA Federal Register Representative/CCD. Written 
comments sent via express mail should be sent to DEA Headquarters, 
Attention: DEA Federal Register Representative/CCD, 2401 Jefferson-
Davis Highway, Alexandria, VA 22301. Comments may be directly sent to 
DEA electronically by sending an electronic message to 
[email protected]. Comments may also be sent 
electronically through http://www.regulations.gov using the electronic 
comment form provided on that site. An electronic copy of this document 
is also available at the http://www.regulations.gov Web site. DEA will 
accept attachments to electronic comments in Microsoft word, 
WordPerfect, Adobe PDF, or Excel file formats only. DEA will not accept 
any file format other than those specifically listed here.

FOR FURTHER INFORMATION CONTACT: Christine A. Sannerud Ph.D., Chief, 
Drug and Chemical Evaluation Section, Office of Diversion Control, Drug 
Enforcement Administration, Washington DC 20537 at (202) 307-7183.

SUPPLEMENTARY INFORMATION: The Controlled Substances Act (CSA) and its 
implementing regulations, specifically 21 U.S.C. 802(35) and 21 CFR 
1310.02(c), provide the Attorney General with the authority to specify, 
by regulation, additional chemicals as ``List II'' chemicals if they 
are used in the manufacture of a controlled substance in violation of 
the CSA. This authority has been delegated to the Administrator of DEA 
by 28 CFR 0.100 and redelegated to the Deputy Administrator under 28 
CFR 0.104 (subpart R) Appendix section 12.
    This Notice of Proposed Rulemaking (NPRM) proposes the addition of 
sodium permanganate as a List II chemical. Additionally, this NPRM 
proposes that a threshold of 55 kilograms and 500 kilograms be 
established (respectively) for domestic and international transactions.
    DEA is also proposing that chemical mixtures (containing sodium 
permanganate) having less than or equal to 15 percent sodium 
permanganate shall qualify for automatic exemption from CSA chemical 
regulatory controls pursuant to 21 CFR part 1310. Since DEA recognizes 
that the concentration limit exemption criteria cannot identify all 
mixtures that should receive exemption status, DEA has implemented an 
application process to exempt additional mixtures (21 CFR 1310.13). 
This application process was finalized in a Final Rule published in the 
Federal Register May 1, 2003 (68 FR 23195). Under the application 
process, manufacturers may submit an application for exemption for 
those mixtures that do not qualify for automatic exemption. Exemption 
status can be granted if DEA determines that the mixture is formulated 
in such a way that it cannot be easily used in the illicit production 
of a controlled substance and the listed chemical cannot be readily 
recovered (i.e., it meets the conditions in 21 U.S.C. 802(39)(A)(v)). 
An application may be for a single or a multiple number of 
formulations.

Sodium Permanganate Industry and Legitimate Uses

    Sodium permanganate is an inorganic oxidant that is a direct 
substitute for potassium permanganate. Due to its high solubility in 
water, sodium permanganate has distinct advantages over potassium 
permanganate in many industrial applications. It is becoming widely 
used for industrial purposes, including (1) printed circuit board 
production, (2) pharmaceutical and chemical synthesis, (3) soil and 
groundwater remediation, (4) metal cleaning formulations, (5) acid mine 
drainage and (6) hydrogen sulfide odor control.
    DEA has identified only one domestic producer of sodium 
permanganate. However, sodium permanganate is also imported into the 
United States and there are at least three other major suppliers of 
sodium permanganate in the United States.
    The U.S. firm that manufactures sodium permanganate distributes it 
through 15-20 major authorized distributors and more than 100 branch 
distributors. This U.S. supplier has advised DEA that it is aware of 
``one

[[Page 9890]]

[sodium permanganate] manufacturer in Germany, more than one 
manufacturer in China and at least nine suppliers in other countries.''

Reason for This Control Action

    Sodium permanganate is directly substitutable for potassium 
permanganate, an important List II chemical used illicitly in the 
production of cocaine. Potassium permanganate is widely used as an 
oxidizing agent for removing impurities from coca base in the illicit 
production of cocaine. Potassium permanganate is utilized because it 
produces an aesthetically pleasing, white, crystalline form of cocaine 
hydrochloride, which is easily marketed.
    Because of its importance in cocaine production, potassium 
permanganate has been the target of international cooperative efforts 
to monitor potassium permanganate shipments and prevent its diversion. 
This effort remains an international priority involving the competent 
authorities of 22 countries.
    Recently, the world's largest producer of potassium permanganate (a 
U.S. company) informed DEA of its recent conversion of production 
processes away from potassium permanganate and toward the increased 
production and distribution of sodium permanganate. Because of sodium 
permanganate's direct substitutability for potassium permanganate, this 
company has agreed with DEA concerns regarding the potential illicit 
use of sodium permanganate as a direct substitute for potassium 
permanganate in cocaine processing. This producer advised DEA that it 
would welcome the control of sodium permanganate as a listed chemical.
    Even though production of sodium permanganate has historically been 
limited, sodium permanganate has been seized by law enforcement at 
illicit cocaine laboratories in Latin America. As reported in the 2001 
and 2002 Statistical Summary on Drugs compiled by the Organization of 
American States (OAS), Inter-American Drug Abuse Control Commission 
(CICAD), the Government of Colombia (as reported by the Colombian 
Ministerio de Justicia y del Derecho, Direccion Nacional de 
Estupefacientes) reported the seizure of 1,400 kilograms of sodium 
permanganate in 1997, 236 kilograms in 1998 and 404 kilograms in 1999.
    Because of its direct substitutability for potassium permanganate 
and increased production, DEA sees the urgent need to regulate sodium 
permanganate as a List II chemical to prevent its diversion to cocaine 
laboratories. Hence, this NPRM proposes that sodium permanganate become 
subject to the same CSA regulatory controls which have been put forth 
for potassium permanganate. As such, sodium permanganate would become 
subject to List II chemical controls, including recordkeeping, 
reporting, and import/export requirements as specified in 21 CFR parts 
1310 and 1313.

Regulatory Controls That Would Apply to This Chemical

    DEA is proposing that sodium permanganate become subject to the 
same chemical controls as apply to potassium permanganate, due to its 
direct substitutability in cocaine processing. As a List II chemical, 
sodium permanganate would be subject to the chemical regulatory control 
provisions and civil and criminal sanctions of the CSA. As such, 
recordkeeping, reporting and import/export notification requirements 
(as described in 21 CFR parts 1310 and 1313) shall apply. As a List II 
chemical, manufacturers, distributors, importers and exporters of 
sodium permanganate will not be required to register with DEA pursuant 
to the provisions of 21 CFR part 1309.
    Handlers of this chemical would be required to maintain records and 
meet CSA import/export notification requirements for ``regulated 
transactions'' involving sodium permanganate. The CSA (21 U.S.C. 
802(39)) defines the term ``regulated transaction'' as a 
``distribution, receipt, sale, importation, or exportation of, or an 
international transaction involving the shipment of, a listed chemical, 
or if the Attorney General establishes a threshold amount for a 
specific listed chemical,'' a transaction involving a threshold amount. 
The CSA, therefore, provides the Attorney General with authority to 
establish a threshold amount for listed chemicals if the Attorney 
General so elects.
    DEA is proposing the establishment of a threshold of 55 kilograms 
for domestic transactions and 500 kilograms for international 
transactions. Consequently, all transactions which meet or exceed these 
threshold quantities would be considered regulated transactions and be 
subject to recordkeeping, reporting and import/export notification 
requirements of the CSA.

Regulatory Requirements for Persons Handling Regulated Transactions of 
Sodium Permanganate

    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 II 
chemical. Only a distribution, receipt, sale, importation, or 
exportation of a regulated mixture at or above the established 
threshold (e.g. 55 kilograms for domestic transactions and 500 
kilograms for international transactions) 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 non-regulated 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 listed chemicals are 
described in 21 CFR part 1313.
    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 listed chemical 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.

Specific Requirements That Will Apply to Regulated Chemical Mixtures 
Containing Sodium Permanganate

    Upon publication of a Final Rule, a chemical mixture that is 
regulated because it contains greater than 15 percent sodium 
permanganate will be treated as a List II chemical. Transactions that 
meet or exceed the cumulative monthly threshold of 55 kilograms for 
domestic transactions and 500 kilograms for international

[[Page 9891]]

transactions shall be regulated transactions.
    The regulatory requirements for regulated chemical mixtures 
containing List II chemicals are the same as for regulated chemical 
mixtures containing List I chemicals, except that registration 
requirements do not apply. Therefore, the same requirements for records 
and reports, imports/exports (except that pertaining to 21 U.S.C. 957), 
and administrative inspection, as outlined above, apply to handlers of 
List II regulated chemical mixtures.
    Persons who submit an application for exemption (21 CFR 1310.13) 
and whose application is pending or subsequently denied by DEA would be 
required to comply with all chemical control requirements, including 
recordkeeping and reporting, effective 30 days from date of publication 
of the final rulemaking. Therefore, all transactions of the chemical 
mixture would be regulated, if above threshold, while an application 
for exemption is pending or awaiting correction. This is necessary 
because not regulating these transactions could result in increased 
diversion of chemicals desirable to cocaine traffickers.

Potential Impact of Regulation Upon Industry

    In an effort to better estimate the potential impact of this 
proposed action, DEA conducted an analysis of various data sources 
relating to the manufacture, distribution, and use of the 
permanganates. This included an analysis of current chemical producers 
and marketing directories (to identify companies listing themselves as 
sources of these chemicals).
    As previously stated in this NPRM, the DEA has identified only a 
limited number of companies which distribute sodium permanganate which 
has been either domestically produced or imported. While sodium 
permanganate has industrial uses, DEA has not been able to identify any 
``household'' uses for this chemical. Therefore, the number of firms 
that are likely to be affected by this proposed regulation is 
relatively small.
    This proposed regulation is not considered to have an impact upon a 
substantial number of firms, given the limited distribution of this 
chemical. Additionally, it is likely that the CSA recordkeeping 
requirements are already being met as part of normal business practice. 
Since sodium permanganate is being proposed as a List II chemical there 
is no registration requirement. Additionally, DEA is proposing a 
cumulative threshold of 55 kilograms for domestic transactions and 500 
kilograms for international transactions. Therefore, small transactions 
involving research quantities of sodium permanganate will not be 
subject to regulatory requirements.

Invitation for Input Regarding the Legitimate Uses for These Chemicals

    This NPRM solicits input regarding: (1) The nature of the 
legitimate sodium permanganate industry; (2) the legitimate uses of 
sodium permanganate at all levels of distribution (including industrial 
uses and use by individual end-users at the retail level of 
distribution); (3) the potential impact such regulatory controls may 
have on legitimate industry (particularly with respect to the impact on 
small businesses); (4) the potential number of individuals/firms which 
may be affected by increased regulatory requirements; and (5) any other 
information on the manner of manufacturing, distribution, consumption, 
storage, disposal, and uses of sodium permanganate by industry and 
others. Comments must be submitted on or before May 2, 2005.

Regulatory Certifications

Regulatory Flexibility Act

    The 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. As noted previously, 
this NPRM is not considered to have an impact upon a substantial number 
of firms, given the limited distribution of this chemical. Further, 
this impact is being limited by the fact that DEA is proposing to list 
sodium permanganate as a List II chemical, rather than the more 
stringent requirements of a List I chemical. Additionally, it is likely 
that the CSA recordkeeping requirements are already being met as part 
of normal business practice. The cumulative threshold of 55 kilograms 
for domestic transactions and 500 kilograms for international 
transactions proposed here would remove from regulatory control small 
transactions involving research quantities of sodium permanganate.

Executive Order 12866

    The Deputy Administrator further certifies that this rulemaking has 
been drafted in accordance with the principles in Executive Order 12866 
Section 1(b). It has been determined that this is a ``significant 
regulatory action''. Therefore, this action has been reviewed by the 
Office of Management and Budget. DEA has identified only one United 
States firm which manufactures sodium permanganate. This firm supports 
control of sodium permanganate as a List II chemical.

Paperwork Reduction Act

    This NPRM proposes the addition of sodium permanganate as a List II 
chemical under the Controlled Substances Act. As a List II chemical, 
there is no requirement of registration to handle this chemical. 
Further, as most persons who handle this product are end-users and, as 
such, are not required to maintain records or file reports, there is no 
impact on these persons.
    Handlers of sodium permanganate that distribute above threshold 
quantities, are required to maintain records. Normal business records 
are deemed adequate if they contain the information required in 21 CFR 
1310.06. As normal business records meet DEA's regulatory requirements, 
the maintenance of these records does not fall under the parameters of 
the Paperwork Reduction Act. Further, DEA is proposing that persons 
importing and exporting this List II chemical in quantities of greater 
than 500 kilograms, cumulatively, per month, must provide DEA with 
advance notification of these transactions. As DEA does not have any 
information on which to base an estimate of the impact of this new 
reporting requirement for persons importing or exporting sodium 
permanganate in quantities greater than 500 kilograms, cumulatively, 
per month, DEA will adjust the burden related to this information 
collection (OMB control number 1117-0023 ``Import/Export Declaration: 
Precursor and Essential Chemicals'') upon its renewal.

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 
$100,000,000 or more

[[Page 9892]]

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 $114,000,000 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 in 21 CFR Part 1310

    Drug traffic control, List I and List II chemicals, Reporting and 
recordkeeping requirements.
    For reasons set out above, it is proposed that 21 CFR part 1310 be 
amended as follows:

PART 1310--RECORDS AND REPORTS OF LISTED CHEMICALS AND CERTAIN 
MACHINES [AMENDED]

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

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

    2. Section 1310.02 is proposed to be amended by adding a new 
paragraph (b)(12) to read as follows:


Sec.  1310.02  Substances covered.

* * * * *
    (b) * * *

(12) Sodium Permanganate........................................    6588
 

* * * * *
    3. Section 1310.04 is proposed to be amended by adding new 
paragraphs (f)(2)(i)(H) and (f)(2)(ii)((J) to read as follows:


Sec.  1310.04  Maintenance of records.

* * * * *
    (f) * * *
    (2) * * *
    (i) * * *

(H) Sodium permanganate..........  N/A..........  500
                                                  kilograms.
 

* * * * *
    (ii) * * *

(J) Sodium permanganate..........  N/A..........  55
                                                  kilograms.
 

* * * * *
    4. Section 1310.12 is proposed to be amended by revising paragraph 
(c) introductory text and adding to the table in paragraph(c) an entry 
in alphabetical order for ``Sodium Permanganate'' to read as follows:


Sec.  1310.12  Exempt chemical mixtures.

* * * * *
    (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 gases by using the unit of weight.

                                          Table of Concentration Limits
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                                           DEA chemical
                                           code number     Concentration  (percent)       Special conditions
----------------------------------------------------------------------------------------------------------------
List I Chemicals.
 
                                                  * * * * * * *
List II Chemicals.
 
                                                  * * * * * * *
Sodium Permanganate....................            6588   15% by Weight.............
 
                                                  * * * * * * *
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    Dated: December 30, 2004.
Michele M. Leonhart,
Deputy Administrator.
[FR Doc. 05-3913 Filed 2-28-05; 8:45 am]
BILLING CODE 4410-09-P