[Federal Register Volume 71, Number 200 (Tuesday, October 17, 2006)]
[Rules and Regulations]
[Pages 60823-60827]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-16990]


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DEPARTMENT OF JUSTICE

Drug Enforcement Administration

21 CFR Part 1310

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


Control of Sodium Permanganate as a List II Chemical

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

ACTION: Final rule.

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SUMMARY: On March 1, 2005, the Drug Enforcement Administration (DEA) 
published a Notice of Proposed Rulemaking (70 FR 9889) which proposed 
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.
    This rulemaking finalizes control of sodium permanganate. As a List 
II chemical, handlers of sodium permanganate shall be subject to 
Controlled Substances Act (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.
    This rulemaking is also establishing a cumulative threshold of 55 
kilograms and 500 kilograms (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, as a result of 
this rulemaking, chemical mixtures having greater than 15 percent 
sodium permanganate shall be subject to CSA chemical regulatory control 
provisions.
    All handlers of the List II chemical sodium permanganate shall also 
be subject to the applicable civil and criminal penalty provisions 
found in 21 U.S.C. 841, 842, 843, 959 and 960.

DATES: Effective Date: December 18, 2006.

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 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, Drug Enforcement 
Administration (DEA) by 28 CFR 0.100 and redelegated to the Deputy 
Administrator under 28 CFR 0.104 (Subpart R) Appendix section 12.
    On March 1, 2005, the DEA published a Notice of Proposed Rulemaking 
(70 FR 9889) which proposed 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. 
Additionally, the Notice of Public Rule Making (NPRM) proposed that a 
threshold of 55 kilograms and 500 kilograms be established 
(respectively) for domestic and international transactions.
    DEA also proposed 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

[[Page 60824]]

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 (U.S.) and there are at least three other major suppliers 
of sodium permanganate in the U.S.
    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 [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), and the 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 rulemaking subjects sodium permanganate to 
the same CSA regulatory controls which have been put forth for 
potassium permanganate. As such, sodium permanganate shall be subject 
to List II chemical controls, including recordkeeping, reporting, and 
import/export requirements as specified in 21 CFR Parts 1310 and 1313.

Comments Received in Response to the NPRM

    In response to the March 1, 2005, NPRM, DEA received four comments. 
One commenter simply stated that they supported the control of sodium 
permanganate as a List II chemical.
    Another commenter stated that they disagreed with the exemption of 
chemical mixtures containing less than 15 percent sodium permanganate, 
but did not provide any supportive reason for their opposition.
    Two comments addressed the issue of the establishment of a domestic 
threshold of 55 kilograms for domestic transactions. One commenter 
stated that the threshold was too high and instead suggested that DEA 
establish a domestic threshold of 5 kilograms. Another commenter stated 
that they believed the 55 kilogram threshold was too low, and stated 
that they believed it would increase the recordkeeping burden on 
wastewater treatment facilities.
    DEA believes, however, that the threshold of 55 kilograms for 
domestic transactions will not impact these wastewater treatment 
facilities because these facilities are end-users. As such, they are 
not required to maintain records and therefore do not incur any 
regulatory burden. Their suppliers, however, must maintain records of 
all distributions greater than 55 kilograms.
    Furthermore, DEA believes that the 55 kilogram threshold for 
domestic transactions is appropriate, since this is the threshold that 
currently exists for potassium permanganate (which is the direct 
substitute for sodium permanganate in these industries.)
    One comment was received from the sole U.S. producer of sodium 
permanganate. The company stated that it supports DEA's proposal to 
control sodium permanganate as a List II chemical. The company further 
stated that controls on sodium permanganate should be exactly the same 
as the controls which currently exist on potassium permanganate. DEA 
agrees.

What This Final Rule Does and Regulatory Controls That Shall Apply to 
This Chemical

    After careful consideration of all comments, DEA has determined 
that all control provisions as proposed in the March 1, 2005, NPRM (70 
FR 9889) shall become final. As such, the exact regulatory controls 
which currently apply to potassium permanganate shall be implemented 
for sodium permanganate effective December 18, 2006.
    As a List II chemical, sodium permanganate shall 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 shall 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

[[Page 60825]]

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 establishing a threshold of 55 kilograms for domestic 
transactions and 500 kilograms for international transactions. 
Consequently, all transactions which meet or exceed these threshold 
quantities shall 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

    Effective December 18, 2006, 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 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 shall be 
required to comply with all chemical control requirements, including 
recordkeeping and reporting, effective December 18, 2006. 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 
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 the 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 final rulemaking 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 added as a List II chemical there is 
no registration requirement. Additionally, DEA is establishing 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.

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 rulemaking 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 adding 
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 established 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

[[Page 60826]]

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 U.S. firm which manufactures sodium 
permanganate. This firm supports control of sodium permanganate as a 
List II chemical.

Paperwork Reduction Act

    This rulemaking adds sodium permanganate as a List II chemical 
under the CSA. 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, 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 
$115,000,000 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 $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.

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

PART 1310--RECORDS AND REPORTS OF LISTED CHEMICALS AND CERTAIN 
MACHINES

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

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


0
2. Sec.  1310.02 is amended by adding a new paragraph (b)(12) to read 
as follows:


Sec.  1310.02  Substances Covered.

* * * * *
    (b) * * *
    (12) Sodium Permanganate 6588
* * * * *

0
3. Sec.  1310.04 is 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
* * * * *

0
4. Sec.  1310.12 is amended by adding an entry for ``sodium 
permanganate'' to the table in paragraph (c) to read as follows:


Sec.  1310.12  Exempt chemical mixtures.

* * * * *
    (c) * * *

                                          Table of Concentration Limits
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                                           DEA chemical
                                             code No.       Concentration  (percent)       Special conditions
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
List II Chemicals.......................
 
                                                  * * * * * * *
Sodium Permanganate.....................            6588  15% by Weight..............
 
                                                  * * * * * * *
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[[Page 60827]]

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    Dated: September 29, 2006.
Michele M. Leonhart,
Deputy Administrator.
 [FR Doc. E6-16990 Filed 10-16-06; 8:45 am]
BILLING CODE 4410-09-P