[Federal Register Volume 71, Number 192 (Wednesday, October 4, 2006)]
[Proposed Rules]
[Pages 58569-58571]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-16325]


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DEPARTMENT OF JUSTICE

Drug Enforcement Administration

21 CFR Part 1312

[Docket No. DEA-282P]
RIN 1117-AB03


Authorized Sources of Narcotic Raw Materials

AGENCY: Drug Enforcement Administration (DEA), Department of Justice.

ACTION: Notice of proposed rule making (NPRM).

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SUMMARY: DEA proposes to amend its regulations to update the list of 
non-traditional countries authorized to export narcotic raw materials 
(NRM) to the United States. This change would replace Yugoslavia with 
Spain. This proposed rule seeks to maintain a consistent and reliable 
supply of narcotic raw materials from a limited number of countries 
consistent with United States obligations under international treaties 
and resolutions.

DATES: Written comments must be postmarked, and electronic comments 
must be sent, on or before December 4, 2006.

ADDRESSES: To ensure proper handling of comments, please reference 
``Docket No. DEA-282P'' on all written and electronic correspondence. 
Written comments being sent via regular mail should be sent to the 
Deputy Assistant Administrator, Office of Diversion Control, Drug 
Enforcement Administration, Washington, DC 20537, Attention: DEA 
Federal Register Representative/Liaison and Policy Section (ODL). 
Written comments sent via express mail should be sent to DEA 
Headquarters, Attention: DEA Federal Register Representative/ODL, 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 formats 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, Telephone (202) 307-
7183.

SUPPLEMENTARY INFORMATION:

Legal Authority

    DEA enforces the Controlled Substances Act (CSA) (21 U.S.C. 801 et 
seq.), as amended. DEA regulations implementing this statute are 
published in Title 21 of the Code of Federal Regulations (CFR), parts 
1300 to 1399. These regulations are designed to establish a framework 
for the legal distribution of controlled substances to deter their 
diversion for illegal purposes and to ensure an adequate and 
uninterrupted supply of these drugs for legitimate medical purposes. 
The CSA and its implementing regulations are consistent with United 
States treaty obligations that, among other things, address the 
production, import, and export of controlled substances.

Controlled Substances

    Controlled substances are drugs that have a potential for abuse and 
addiction; these include substances classified as opiates, stimulants, 
depressants, hallucinogens, anabolic steroids, and drugs that are 
immediate precursors of these classes of substances. DEA lists 
controlled substances in 21 CFR part 1308. The substances are divided 
into five schedules: Schedule I substances have a high potential for 
abuse and have no accepted medical use. These substances may only be 
used for research, chemical analysis, or manufacture of other drugs. 
Schedule II-V substances have an accepted medical use and also have a

[[Page 58570]]

potential for abuse and addiction. Narcotic raw materials (opium, poppy 
straw, and concentrate of poppy straw (CPS)) are in Schedule II and are 
the materials from which morphine, codeine, and thebaine are extracted 
for purposes of manufacturing a number of Schedule II controlled 
substances.

Sources of Narcotic Raw Materials

    In May 1979, the United Nations' Economic and Social Council 
(ECOSOC) adopted Resolution 471, which called on importing countries 
such as the United States to support traditional suppliers of narcotic 
raw materials (NRM) and to limit imports from non-traditional supplying 
countries. The resolution, which was reaffirmed by ECOSOC in 1981, was 
adopted to limit overproduction of NRM, to restore a balance between 
supply and demand, and to prevent diversion to illicit channels. The 
United States, based on long-standing policy, does not cultivate or 
produce NRM, but relies solely on opium, poppy straw, and CPS produced 
in other countries for the NRM necessary to meet the legitimate medical 
needs of the United States. In response to Resolution 471, on August 
18, 1981, DEA published a final rule specifying certain source 
countries of NRM (46 FR 41775); the rule is frequently referred to as 
the 80/20 rule. Under the final rule, currently codified as 21 CFR 
1312.13(f) and (g), NRM can be imported from one of only seven 
countries. Traditional suppliers India and Turkey must be the source of 
at least 80 percent of the United States' requirement for NRM. Five 
countries--France, Poland, Hungary, Australia, and Yugoslavia--may be 
the source of not more than 20 percent. The United States continues to 
reaffirm its support of the original resolution by supporting similar 
resolutions each year at the CND.
    Recently, DEA registered importers of NRM have imported 
approximately 90 percent of NRM from traditional suppliers India and 
Turkey. India is the only country that cultivates poppies for 
production of opium. All other exporting countries use the CPS method 
of NRM production, a method that allows the plant to go to seed; 
portions of the plant are then processed into a concentrate. It is 
generally believed that CPS is less divertible than opium. CPS may be 
rich in morphine (CPS-M) or rich in thebaine (CPS-T). The United States 
imports the majority of its CPS-M from Turkey, with Australia supplying 
much of the balance.
    The 80/20 rule was established based on traditional import amounts 
and on the U.N. resolution calling on member nations to support 
traditional sources that have been reliable suppliers and that take 
measures to curtail diversion. The United States allowed a limited 
number of non-traditional suppliers to have access to the United States 
market based on past commercial relationships and on the desirability 
of preserving alternative sources. This approach was consistent with 
the U.N. Resolution because it supported India and Turkey, and ensured 
an adequate and uninterrupted supply of NRM, while limiting the number 
of supplying countries. DEA continues to support the 80/20 rule.
    On June 6, 2005, the Government of Spain petitioned DEA seeking to 
be added to the list of non-traditional suppliers. Spain stated four 
reasons that granting its petition would be consistent with United 
States interests:
     The change would be consistent with the 80/20 rule because 
it maintains India and Turkey as the two traditional supplier 
countries, that is, Spain does not seek to be added to the list of 
traditional suppliers.
     The change would ensure adequate supplies of NRM.
     The change would not result in diversion because Spain 
maintains strict control and oversight over the cultivation and 
distribution of NRM.
     The change would allow DEA to monitor diversion and 
maintain cost-effective supplies.
    In its petition, Spain explained that in the early 1970s, Spanish 
pharmaceutical firms sought authorization to cultivate opium poppies to 
produce NRM. In 1973, Spain authorized a single firm, Alcaliber, to 
cultivate, harvest, store, and prepare extracts from the opium poppy. 
Spain is now the fifth largest cultivator of opium poppies; Spain is 
the fourth largest producer of CPS and the third largest exporter of 
CPS-M.\1\ Spain has ratified international agreements to control 
production and commerce in opium products. In accordance with these 
international agreements, Spain has implemented a comprehensive 
regulatory regime for controlling the cultivation, production, and 
export of NRM. The petition stated that this control ensures that NRM 
produced in Spain are not diverted to illicit uses.
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    \1\ ``Narcotic Drugs: Estimated World Requirements for 2005--
Statistics for 2003'', Tables II and XIII; International Narcotics 
Control Board (E/INCB/2004/2).
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    DEA has reviewed the petition and is proposing to change the list 
of non-traditional suppliers to remove Yugoslavia and replace it with 
Spain. DEA has determined that the successor states to the former 
Yugoslavia no longer produce NRM for export. Therefore, replacing 
Yugoslavia with Spain will continue to limit the number of non-
traditional suppliers to the United States while ensuring that an 
adequate number of sources of NRM are available. The change does not 
otherwise affect how the 80/20 rule is implemented.

Regulatory Certifications

Regulatory Flexibility Act

    The Deputy Assistant Administrator, Office of Diversion Control, 
hereby certifies that this rulemaking has been drafted in accordance 
with the Regulatory Flexibility Act (5 U.S.C. 605(b)), that he 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 business entities. The proposed rule imposes no new 
costs or burden on small entities.

Executive Order 12866

    The Deputy Assistant Administrator, Office of Diversion Control, 
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.

Executive Order 12988

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

Executive Order 13132

    This proposed rule 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 proposed rule will not result in the expenditure by State, 
local, and tribal governments, in the aggregate, or by the private 
sector, of $117,000,000 or more (adjusted for inflation) 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.

[[Page 58571]]

Small Business Regulatory Enforcement Fairness Act of 1996

    This proposed 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 in 21 CFR Part 1312

    Administrative practice and procedure, Drug traffic control, 
Exports, Imports, Reporting and recordkeeping requirements.

    For the reasons set out above, 21 CFR part 1312 is proposed to be 
amended as follows:

PART 1312--IMPORTATION AND EXPORTATION OF CONTROLLED SUBSTANCES

    1. The authority citation for Part 1312 continues to read as 
follows:

    Authority: 21 U.S.C. 952, 953, 954, 957, 958.

    2. Section 1312.13 is proposed to be amended by revising paragraphs 
(f) and (g) to read as follows:


Sec.  1312.13  Issuance of import permit.

* * * * *
    (f) Notwithstanding paragraphs (a)(1) and (a)(2) of this section, 
the Administrator shall permit, pursuant to 21 U.S.C. 952(a)(1) or 
(a)(2)(A), the importation of approved narcotic raw material (opium, 
poppy straw and concentrate of poppy straw) having as its source:
    (1) Turkey,
    (2) India,
    (3) Spain,
    (4) France,
    (5) Poland,
    (6) Hungary, and
    (7) Australia.
    (g) At least eighty (80) percent of the narcotic raw material 
imported into the United States shall have as its original source 
Turkey and India. Except under conditions of insufficient supplies of 
narcotic raw materials, not more than twenty (20) percent of the 
narcotic raw material imported into the United States annually shall 
have as its source Spain, France, Poland, Hungary and Australia.

    Dated: September 26, 2006.
Joseph T. Rannazzisi,
Deputy Assistant Administrator, Office of Diversion Control.
 [FR Doc. E6-16325 Filed 10-3-06; 8:45 am]
BILLING CODE 4410-09-P