[Federal Register Volume 76, Number 106 (Thursday, June 2, 2011)]
[Rules and Regulations]
[Pages 31824-31831]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-13686]


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DEPARTMENT OF JUSTICE

Drug Enforcement Administration

21 CFR Part 1310

[Docket No. DEA-228F]
RIN 1117-AA66


Chemical Mixtures Containing Listed Forms of Phosphorus and 
Change in Application Process

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

ACTION: Final rule.

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SUMMARY: This rulemaking finalizes a June 25, 2010, notice of proposed 
rulemaking in which DEA proposed regulations which establish those 
chemical mixtures containing red phosphorus or hypophosphorous acid and 
its salts (hereinafter ``regulated phosphorus'') that shall 
automatically qualify for exemption from the

[[Page 31825]]

Controlled Substances Act (CSA) regulatory controls. Chemical mixtures 
containing red phosphorus in a concentration of 80 percent or less and 
mixtures containing hypophosphorous acid and its salts (hypophosphite 
salts) in a concentration of 30 percent and less, shall qualify for 
automatic exemption. DEA is not implementing automatic exemption for 
any concentration of chemical mixtures containing white phosphorus 
(also known as yellow phosphorus). Unless otherwise exempted, all 
material containing white phosphorus shall become subject to CSA 
chemical regulatory controls regardless of concentration.
    DEA recognizes that concentration criteria alone cannot identify 
all mixtures that warrant exemption; therefore, an application process 
has been implemented which allows manufacturers to apply for exemption 
from CSA regulatory controls for those phosphorus chemical mixtures 
that do not qualify for automatic exemption. This rulemaking also 
finalizes changes to the application review and notification process.

DATES: This rulemaking becomes effective July 5, 2011. Persons seeking 
registration must apply on or before July 5, 2011 to continue their 
business pending final action by DEA on their application.

FOR FURTHER INFORMATION CONTACT: Imelda L. Paredes, Office of Diversion 
Control, Drug Enforcement Administration, 8701 Morrissette Drive, 
Springfield, Virginia 22152; Telephone (202) 307-8784.

SUPPLEMENTARY INFORMATION: 

DEA's Legal Authority

    DEA implements the Comprehensive Drug Abuse Prevention and Control 
Act of 1970, often referred to as the Controlled Substances Act (CSA) 
and Controlled Substances Import and Export Act (21 U.S.C. 801-971), as 
amended. DEA publishes the implementing regulations for these statutes 
in Title 21 of the Code of Federal Regulations (CFR), parts 1300 to 
end. These regulations are designed to ensure that there is a 
sufficient supply of controlled substances for legitimate medical 
purposes and to deter the diversion of controlled substances to illegal 
purposes. The CSA mandates that DEA establish a closed system of 
control for manufacturing, distributing, and dispensing controlled 
substances. Any person who manufactures, distributes, dispenses, 
imports, exports, or conducts research or chemical analysis with 
controlled substances must register with DEA (unless exempt) and comply 
with the applicable requirements for the activity. The CSA, as amended, 
also requires DEA to regulate the manufacture, distribution, 
importation, and exportation of chemicals that may be used to 
manufacture controlled substances. Listed chemicals that are classified 
as List I chemicals are important to the manufacture of controlled 
substances. Those classified as List II chemicals may be used to 
manufacture controlled substances.

Purpose of This Rule

    In this rule, DEA is finalizing concentration limits on chemical 
mixtures containing red phosphorus and/or hypophosphorous acid and its 
salts. This rule is being finalized as proposed. Chemical mixtures 
containing either of these listed chemicals at or below the 
concentration limit will be automatically exempt from CSA regulatory 
controls. Mixtures containing these chemicals above the concentration 
limit will be regulated as List I chemicals. DEA did not propose 
automatic exemption for chemical mixtures containing white phosphorus. 
Unless otherwise exempted, all material containing white phosphorus 
shall be subject to CSA chemical regulatory controls regardless of 
concentration.

DEA's Requirement To Identify Exempt Chemical Mixtures

    The Chemical Diversion and Trafficking Act of 1988 (Pub. L. 100-
690) (CDTA) created a definition for the term ``chemical mixture'' (21 
U.S.C. 802(40)). The CDTA also established 21 U.S.C. 802(39)(A)(vi) to 
exclude ``any transaction in a chemical mixture'' from the definition 
of a ``regulated transaction.'' This exemption was exploited by those 
that traffic chemicals for illicit purposes in that it provided an 
unregulated source for obtaining listed chemicals for use in the 
illicit manufacture of controlled substances.
    In April 1994, the Domestic Chemical Diversion Control Act of 1993 
(Pub. L. 103-200) (DCDCA) corrected this situation by subjecting such 
chemical mixtures to CSA regulatory requirements, unless specifically 
exempted by regulation. These requirements included recordkeeping, 
reporting, and security for all regulated chemical mixtures with the 
additional requirement of registration for handlers of List I chemicals 
including regulated chemical mixtures. The DCDCA also provided the 
Attorney General with the authority to establish regulations to exempt 
chemical mixtures from the definition of a ``regulated transaction.'' A 
chemical mixture can be granted exemption ``based on a finding that the 
mixture is formulated in such a way that it cannot be easily used in 
the illicit production of a controlled substance and that the listed 
chemical or chemicals contained in the mixture cannot be readily 
recovered'' (21 U.S.C. 802(39)(A)(vi)). This authority has been 
delegated to the Administrator of DEA by 28 CFR 0.100 (Subpart R).
    DEA has treated all regulated chemical mixtures as non-regulated 
chemicals until such time that it promulgates a final rule that 
identifies concentration limits, above which the chemical mixtures are 
regulated. This served to prevent the immediate regulation of all 
qualified mixtures, which is not necessary. It also allowed DEA to 
gather information to implement regulations pursuant to 21 U.S.C. 
802(39)(A)(vi).

Chemical Mixture Definition

    21 U.S.C. 802(40) defines the term ``chemical mixture'' as ``a 
combination of two or more chemical substances, at least one of which 
is not a List I chemical or a List II chemical, except that such term 
does not include any combination of a List I chemical or a List II 
chemical with another chemical that is present solely as an impurity.'' 
Therefore, a chemical mixture contains any number of listed chemicals 
in combination with any number of non-listed chemicals.
    DEA does not consider a chemical mixture to mean the combination of 
a listed chemical and an inert carrier. An inert carrier can be any 
chemical that does not modify the function of the listed chemical but 
is present to aid in the delivery of the listed chemical. Examples 
include, but are not limited to, dilutions in water, alcohol, or the 
presence of a carrier gas.
    In determining which chemical mixtures shall be subject to control, 
DEA considers the actual and potential clandestine use of such 
material. 21 U.S.C. 802(39)(A)(vi) states that an exemption can be 
granted if ``the mixture is formulated in such a way that it cannot be 
easily used in the illicit production of a controlled substance and 
that the listed chemical or chemicals contained in the mixture cannot 
be readily recovered.'' It should be noted that the requirements 
described by statute do not allow for exemptions based on such business 
practices as selling only to known customers, the cost of the mixture, 
the customer's knowledge of the product's chemical content, packaging, 
or such related topics.
    In 2003, DEA published a Final Rule (68 FR 23195, May 1, 2003) that

[[Page 31826]]

identified exempt mixtures containing the chemicals ephedrine, N-
methylephedrine, N-methylpseudoephedrine, norpseudoephedrine, 
phenylpropanolamine, and pseudoephedrine. The effective date of this 
Final Rule was June 2, 2003. In a second Final Rule (69 FR 74957, 
December 15, 2004; corrected at 70 FR 294, January 4, 2005) DEA 
finalized regulations which addressed the exemption of chemical 
mixtures for 27 of the remaining 38 listed chemicals. However, chemical 
mixtures containing phosphorus were not included. The effective date 
for that Final Rule was January 14, 2005.

Uses of Chemical Mixtures Containing Regulated Phosphorus

    Chemical mixtures that contain red phosphorus are used in the 
manufacture of plastics, flame retardants, pyrotechnics, striker plates 
(e.g., for safety matches and flares), incendiary shells, smoke bombs, 
and tracer bullets. Chemical mixtures containing hypophosphorous acid 
salts (e.g., hypophosphite salts) function as catalysts, stabilizers, 
and growth inhibitors. They are used in plastics, films, paints, paper 
products, and fibers with applications that include automotive parts, 
furniture, wiring, containers, and housings for appliances and power 
tools. DEA has not identified any chemical mixtures containing white 
phosphorus.

Diversion of Chemical Mixtures Containing Regulated Phosphorus

    Regulated phosphorus plays an important role in the chemical 
reaction to produce methamphetamine, a schedule II controlled substance 
for which the public health consequences of the manufacture, 
trafficking, and abuse are well known and documented. DEA has 
documented that the predominant method for the illicit manufacture of 
methamphetamine utilizes phosphorus.
    DEA has identified chemical mixtures containing red phosphorus at 
domestic illicit methamphetamine manufacturing sites. Traffickers 
sometimes utilize the striker plates of safety matchbooks or boxes or 
road flares as a source of red phosphorus. The coating on the striker 
plate contains from 25 to 60 percent red phosphorus. An estimated 20 to 
400 striker plates are needed to obtain one gram of red phosphorus. One 
gram of red phosphorus could yield approximately 1.5 grams of 
methamphetamine hydrochloride, which is the end product of clandestine 
manufacturing.

Concentration Limits for Exempt Chemical Mixtures Containing Regulated 
Phosphorus

    DEA is establishing concentration limits for chemical mixtures 
containing phosphorus. All chemical mixtures that have a concentration 
at or below the established concentration limit shall be automatically 
exempt from CSA chemical regulatory controls. Those chemical mixtures 
having a concentration above the concentration limit shall be List I 
regulated chemicals and subject to the chemical regulatory requirements 
of the CSA.
    DEA is not aware of any chemical mixtures containing white 
phosphorus. It is believed that few chemical mixtures in this chemical 
exist because it is too reactive and unstable when mixed with other 
chemicals. Since DEA has not identified any white phosphorus mixtures, 
DEA did not propose a concentration limit for white phosphorus, and, 
therefore, any chemical mixture containing white phosphorus shall be 
subject to CSA regulatory control.
    Hypophosphorous acid is marketed in aqueous solutions of 50 percent 
and can be readily used in the illicit manufacture of methamphetamine. 
Such aqueous solutions of hypophosphorous acid, however, are not 
considered chemical mixtures and are, therefore, currently subject to 
DEA chemical regulations, regardless of concentration. (As stated 
earlier, DEA does not consider a chemical mixture to mean the 
combination of a listed chemical and an inert carrier. An inert carrier 
can be any chemical that does not modify the function of the listed 
chemical but is present to aid in the delivery of the listed chemical. 
Examples include, but are not limited to, dilutions in water, alcohol, 
or the presence of a carrier gas.) No chemical mixtures containing 
hypophosphorous acid have been identified by DEA.
    Traffickers use hypophosphite salts and hypophosphorous acid 
similarly. DEA has identified several chemical mixtures containing 
hypophosphite salts in combination with other chemicals for use as mold 
and mildew inhibitors. Additionally, DEA has identified at least one 
industrial product where sodium hypophosphite is in a chemical mixture 
in combination with resins. The concentration of hypophosphite salts 
within these chemical mixtures does not exceed 20 percent.
    The above chemical mixtures have limited potential for use in a 
clandestine laboratory because of the: (a) Low concentrations of the 
hypophosphite salts, and (b) interference from other chemicals in the 
mixtures. Therefore, DEA is establishing a 30 percent concentration 
limit for hypophosphorous acid and its salts (hypophosphite salts).
    It is important to clarify, again, that DEA does not consider a 
chemical mixture to mean the combination of a listed chemical and an 
inert carrier. Therefore, solutions of hypophosphorous acid or 
hypophosphite salt in water, alcohol, or another inert carrier are not 
considered chemical mixtures and are, therefore, currently subject to 
DEA chemical regulatory controls regardless of concentration.
    As discussed above, only the smallest clandestine methamphetamine 
laboratories use chemical mixtures obtained from matchbook striker 
plates as a source of red phosphorus. Although concerned about this 
type of diversion, DEA determined that the regulation of matchbook 
striker plates is impractical and will create undue administrative 
burdens for both law enforcement and the regulated sector.
    DEA is establishing an 80 percent concentration limit for red 
phosphorus. DEA has determined that chemical mixtures containing over 
80 percent red phosphorus are useful in large scale methamphetamine 
production and, therefore, should not be automatically exempt from 
regulatory controls.
    A chemical mixture having a regulated form of phosphorus at or 
below the concentration limit can still be a regulated chemical mixture 
if another listed chemical is present above its concentration limit. 
The exemption of chemical mixtures from regulatory controls does not 
remove criminal liability for persons who knowingly sell or possess any 
products containing regulated phosphorus for use in violation of the 
CSA.

Comments to the Notice of Proposed Rulemaking

    In response to the June 25, 2010, Notice of Proposed Rulemaking (75 
FR 36306), DEA received two comments. The first comment was received 
from a large chemical company. This firm indicated that they have one 
product which they export which shall become subject to regulation. 
However, the firm stated that they will not be significantly impacted 
by this rulemaking and supported the mixture criteria proposed in the 
rule. Furthermore, the comment commended DEA for taking a reasonable 
approach.
    DEA Response. DEA appreciates this comment and believes that the 
concentration limits finalized in this

[[Page 31827]]

rule are reasonable based on the illicit uses of phosphorus mixtures.
    The second comment was from an association representing full-
service wholesale healthcare distributors. Their members distribute 
more than 9 million prescription and healthcare products. The comment 
stated that they reached out to their members in an attempt to identify 
specific products containing phosphorus which would be subject to the 
proposed regulatory controls. Their review indicated that they do not 
believe that any healthcare product distributors' products are subject 
to the proposed rule. However, the association expressed concern that 
wholesale distributors may be subjected to a rule without sufficient 
ability to provide meaningful public comment. The commenter posited 
that, during the comment period, other public comments may be received 
that would contain further information about products that could be 
subject to the rule and which may also pertain to products distributed 
by healthcare product distributors. The association recommended that 
DEA reopen the rule's comment period if the notice and comment period 
resulted in DEA obtaining further information relevant to the chemical 
mixtures or products potentially subject to the rule.
    DEA Response. As DEA did not receive other comments to the NPRM 
identifying chemical mixtures containing listed forms of phosphorus, 
DEA believes that it has thoroughly examined the number and types of 
mixtures potentially affected by this rule and has adequately addressed 
the impact of this rule on the regulated community. DEA notes, in fact, 
that the only other commenter to this rule supported the rule as 
proposed. This conclusion is consistent with information developed by 
DEA, through DEA's research and comments received in response to the 
Advanced Notice of Proposed Rulemaking published January 31, 2003, (68 
FR 4968) which specifically sought such information from interested 
parties. DEA does not believe that any products distributed by 
healthcare distributors will fall under the regulatory controls being 
finalized here. Therefore, DEA does not believe that this final rule 
will have any impact on this association's members.
    After careful consideration of the comments received, DEA is hereby 
finalizing these regulatory controls exactly as proposed in the June 
25, 2010, Notice of Proposed Rulemaking (75 FR 36306).

Exemption by Application Process

    DEA recognizes that the concentration limits established in this 
rule may not identify all phosphorus 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 the Final Rule (68 FR 23195) published May 1, 2003. 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)(vi)). An application may be for a single or a 
multiple number of formulations. All chemical mixtures which are 
granted exemption via the application process will be listed in 21 CFR 
1310.13(i).
    This rulemaking also establishes changes to the existing 
application process. 21 CFR 1310.13(e) provides that within 30 days 
after the receipt of an application for an exemption, the Administrator 
will notify the applicant of acceptance or rejection of the 
application. This paragraph is being modified in order to clarify that 
this acceptance or rejection only pertains to the acceptance or 
rejection of the application ``for filing'' and does not pertain to the 
granting or denial of the application based upon the merits of the 
application. Furthermore, DEA is modifying this paragraph by removing 
the 30 day timeframe for notification, and instead, specify that such 
notification be ``in writing'' and ``within a reasonable period of 
time''.

Thresholds and Excluded Transactions for Regulated Phosphorus Chemical 
Mixtures

    Regulated phosphorus compounds do not have a threshold as described 
in 21 CFR 1310.04(g)(1). Thus, all transactions in regulated 
phosphorus, including its regulated chemical mixtures, are regulated 
transactions. Certain transactions, described in 21 CFR 1310.08 are 
excluded from the definition of a regulated transaction. These are 
domestic and international return shipments of reusable containers from 
customer to producer containing residual quantities of red phosphorus 
or white phosphorus in rail cars and intermodal tank containers which 
conform to International Standards Organization specifications (with 
capacities greater than or equal to 2500 gallons in a single 
container). This exclusion also applies to regulated chemical mixtures 
containing red phosphorus or white phosphorus.

Requirements That Apply to Regulated List I Chemical Mixtures

    Persons interested in handling List I chemicals, including 
regulated chemical mixtures containing List I chemicals, must comply 
with the following:
    Registration. Any person who manufactures, distributes, imports, or 
exports a List I chemical, or proposes to engage in the manufacture, 
distribution, importation, or exportation of a List I chemical, must 
obtain a registration pursuant to the CSA (21 U.S.C. 823, 957). 
Regulations describing registration for List I chemical handlers are 
set forth in 21 CFR part 1309.
    Separate registration is required for manufacturing, distribution, 
importing, and exporting. Different locations operated by a single 
entity require separate registration if any location is involved with 
the manufacture, distribution, import, or export of a List I chemical. 
Any person manufacturing, distributing, importing, or exporting a 
regulated List I chemical mixture is subject to the registration 
requirement under the CSA. DEA recognizes, however, that it is not 
possible for persons who manufacture, distribute, import, or export 
regulated phosphorus compounds to immediately complete and submit an 
application for registration and for DEA to issue registrations 
immediately for those activities. Therefore, to allow continued 
legitimate commerce in the compounds, DEA is establishing in 21 CFR 
1310.09 a temporary exemption from the registration requirement for 
persons desiring to manufacture, distribute, import, or export 
regulated phosphorus compounds, provided that DEA receives a properly 
completed application for registration on or before July 5, 2011. The 
temporary exemption for such persons will remain in effect until DEA 
takes final action on their application for registration.
    The temporary exemption applies solely to the registration 
requirement; all other chemical control requirements, including 
recordkeeping and reporting, will remain in effect. Additionally, the 
temporary exemption does not suspend applicable Federal criminal laws 
relating to the phosphorus compounds, nor does it supersede state or 
local laws or regulations. All handlers of these materials must comply 
with their state and local requirements in addition to the CSA and 
other Federal regulatory controls.

[[Page 31828]]

    DEA notes that warehouses are exempt from the requirement of 
registration and may lawfully possess List I chemicals, if the 
possession of those chemicals is in the usual course of business (21 
U.S.C. 822(c)(2), 21 U.S.C. 957(b)(1)(B)). For purposes of this 
exemption, the warehouse must receive the List I chemical from a DEA 
registrant and shall only distribute the List I chemical back to the 
DEA registrant and registered location from which it was received. All 
other activities conducted by a warehouse do not fall under this 
exemption; a warehouse that distributes List I chemicals to persons 
other than the registrant and registered location from which they were 
obtained is conducting distribution activities and is required to 
register as such (21 U.S.C. 802(39)(A)(ii)).
    Records and Reports. The CSA (21 U.S.C. 830) requires that certain 
records be kept and reports be made that involve 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 transaction involving a listed chemical, 
provided the transaction is a regulated transaction.
    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.
    Title 21 CFR 1310.05 requires that each regulated person shall 
report to DEA any regulated transaction involving an extraordinary 
quantity of a listed chemical, an uncommon method of payment or 
delivery, or any other circumstance that the regulated person believes 
may indicate that the listed chemical will be used in violation of the 
CSA. Regulated persons are also required to report to DEA any proposed 
regulated transaction with a person whose description or other 
identifying information has been furnished to the regulated person. 
Finally, regulated persons are required to report any unusual or 
excessive loss or disappearance of a listed chemical.
    Import/Export. All imports/exports of a listed chemical shall 
comply with the CSA (21 U.S.C. 957 and 971). Regulations for 
importation and exportation of List I chemicals are described in 21 CFR 
Part 1313. Separate registration is necessary for each activity (21 CFR 
1309.22).
    Security. All applicants and registrants shall provide effective 
controls against theft and diversion of chemicals as described in 21 
CFR 1309.71.
    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 regulated chemical/chemical mixture, 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.
    The goal of this rulemaking is to deny traffickers access to 
regulated phosphorus compounds while minimizing the burden on 
legitimate industry. Persons who obtain a regulated chemical, but do 
not distribute the chemical, are end users. End users are not subject 
to CSA chemical regulatory control provisions such as registration or 
recordkeeping requirements. Some examples of end users are those who 
chemically react phosphorus compounds and change them into non-listed 
chemicals, formulate phosphorus compounds into exempt chemical mixtures 
or consume them in industrial processes.

Technical Revision to 21 CFR 1310.12(a) and 1310.13(i)

    While preparing the June 25, 2010 Notice of Proposed Rulemaking, 
DEA became aware that references to Section 1018 of the Act (21 U.S.C. 
971) were inadvertently omitted from 21 CFR 1310.12(a) and 1310.13(i). 
Therefore, DEA proposed the amendment of these sections by adding this 
citation. This Final Rule implements that modification. This insertion 
is a clarification and does not alter the current treatment of exempt 
chemical mixtures under the CSA.
    As DEA discussed in its December 15, 2004, Final Rule (specifically 
69 FR 74963, comment 10) all chemical mixtures not exempt from CSA 
regulatory controls are subject to all aspects of those controls, 
including importation and exportation requirements. Thus, chemical 
mixtures that are exempt under 21 CFR 1310.12 and 1310.13 are also 
exempt from the requirements of Section 1018 of the Act (21 U.S.C. 
971). The requirements of 21 U.S.C. 971 apply to ``each regulated 
person, who imports or exports a listed chemical.'' Since a person 
distributing an exempt chemical mixture is not a ``regulated person'' 
as defined by 21 U.S.C. 802(38), that person is exempt from the 
requirements of 21 U.S.C. 971.
    DEA notes that this is a technical correction only. All exempt 
chemical mixtures have been treated as such for import and export 
purposes, and all regulated mixtures have been treated as regulated 
transactions for import and export purposes. DEA is merely including a 
reference which was inadvertently omitted from this regulatory 
language.

Regulatory Analyses

Regulatory Flexibility and Small Business Concerns

    The Administrator hereby certifies that this rulemaking has been 
drafted in accordance with the Regulatory Flexibility Act (5 U.S.C. 
601-612). The RFA requires agencies to determine whether a rulemaking 
could have a significant economic impact on a substantial number of 
small entities. DEA sought comment on two separate occasions regarding 
this action. On January 31, 2003, DEA published in the Federal Register 
an ANPRM (68 FR 4968) to solicit input from industry regarding chemical 
mixtures containing regulated phosphorus. DEA received three responses 
to this request, all from industrial firms. In addition, DEA obtained 
information on types of formulations containing regulated phosphorus 
and their uses separate from the ANPRM. All three commenters to the 
ANPRM informed DEA of commercial applications for their chemical 
mixtures containing regulated phosphorus. The commenters also informed 
DEA of concentration ranges for red phosphorus and salts of 
hypophosphorous acid (e.g. hypophosphite salts). In the NPRM, DEA 
sought information from manufacturers about the impact of setting 
concentration limits for chemical mixtures containing phosphorus. Only 
two comments were received in response to the NPRM. Neither of these 
comments noted information to change DEA's belief that the cost of 
compliance with this rule is low and is unlikely to impose a 
significant cost on any manufacturing, distributing, importing, or 
exporting firm. DEA has not identified any chemical mixtures containing 
hypophosphorous acid or white phosphorus either through industry 
comments or as a result of DEA research. It is possible, therefore, 
that there are no entities that will be subject to DEA's requirements 
because of this

[[Page 31829]]

rule. Nonetheless, DEA provides the following discussion describing 
small businesses that might potentially handle these chemical mixtures.
    The rules for listed chemicals apply to chemical manufacturers, 
distributors, importers, and exporters. The chemical manufacturers that 
would handle mixtures containing phosphorus would probably be 
classified in the all other basic inorganic chemical manufacturers 
sector (NAICS 325188). The average value of shipments for chemical 
manufacturers in this sector with 1-9 employees ranges from $2 million 
to $5.6 million. Because the recordkeeping requirements can be met with 
standard business records and most firms maintain adequate security to 
meet DEA's regulations, the only cost directly associated with this 
rule for a chemical manufacturer would be the DEA registration fee of 
$2,293, which represents approximately 0.1 percent of the value of 
shipments for the smallest firm. DEA assumes that chemical 
distributors, importers, and exporters that would handle mixtures 
containing phosphorus fall into the other chemical and allied products 
merchant wholesalers sector (NAICS 424690). The average revenue of 
chemical wholesalers with 1-4 employees is approximately $2.5 million. 
The only cost directly associated with this rule for a chemical 
distributor, importer, or exporter would be the DEA registration fee of 
$1,147, which represents approximately 0.04 percent of revenue for the 
smallest chemical wholesalers. Based on both the lack of entities 
identified that may be subject to this regulation and the low cost of 
the rule, DEA certifies that the rule will not have a significant 
economic impact on a substantial number of small entities.

Executive Orders 13563 and 12866

    This regulation has been developed in accordance with the 
principles of Executive Orders 13563 and 12866 and has been reviewed by 
the Office of Management and Budget. The information DEA received in 
response to the ANPRM and NPRM indicate that few phosphorus mixtures 
will be subject to the regulation. Those mixtures appear to be produced 
by current DEA registrants on whom the rule will impose no new 
requirements.
    As stated earlier in this rulemaking the vast majority of the 
chemical mixtures that will become subject to this rulemaking have 
large industrial uses. Regulated chemical mixtures are not items having 
common household uses. Although concerned about the diversion of 
matchbook striker plates, DEA determined that the regulation of 
matchbook striker plates is impractical and will create undue 
administrative burdens for both law enforcement and the regulated 
sector.
    Benefits. Phosphorus is a chemical important in the clandestine 
manufacture of methamphetamine and amphetamine. This rule seeks to 
eliminate the use of certain chemical mixtures whose high 
concentrations of phosphorus make them valued by traffickers seeking 
this chemical for their clandestine laboratory operations.
    The surge in methamphetamine abuse and the manufacture of the drug 
in clandestine laboratories have caused serious law enforcement and 
environmental problems, particularly in rural communities.
    This rule is intended to continue the trend of reducing the number 
of clandestine laboratories. This trend will reduce the cost to state 
and local governments as well as the hazard to law enforcement officers 
and others from exposure to the toxic chemicals left behind.

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 
to eliminate ambiguity, minimize litigation, establish clear legal 
standards and reduce burden.

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 
$126,400,000 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.

Congressional Review Act

    This rule is not a major rule as defined by Section 804 of the 
Small Business Regulatory Enforcement Fairness Act of 1996 
(Congressional Review Act). This rule will not result in an annual 
effect on the economy of $100,000,000 or more; a major increase in cost 
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.

Executive Order 13175

    This rule will not have Tribal implications and will not impose 
substantial direct compliance costs on Indian Tribal governments.

Paperwork Reduction Act

    This rule establishes regulations stating that chemical mixtures 
containing 80 percent and less of red phosphorus or 30 percent and less 
of hypophosphorous acid or its salts are automatically exempt from CSA 
regulatory controls pertaining to chemicals and that no automatic 
exemption be established for chemical mixtures containing white 
phosphorus. Under this method of automatic exemption, persons who 
handle these exempt chemical mixtures will not be subject to CSA 
regulatory controls, including the requirement to register with DEA, 
the requirement to report manufacturing activities to DEA annually, and 
the requirement to file importation and exportation advance 
notification and return declaration information with DEA. For persons 
handling regulated chemical mixtures, DEA anticipates granting some of 
these mixtures exempt status by the application process (21 CFR 
1310.13).
    Given comments received in response to the NPRM, DEA does not 
believe that the impact will be significant. DEA anticipates that some 
chemical mixtures would be granted exemptions based on the application 
process.

List of Subjects in 21 CFR Part 1310

    Drug traffic control, List I and List II chemicals, reporting 
requirements.

    For the 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, 827(h), 830, 871(b), 890.



0
2. Section 1310.09 is amended by adding paragraph (m) to read as 
follows:


Sec.  1310.09  Temporary exemption from registration.

* * * * *
    (m)(1) Each person required by Sections 302 or 1007 of the Act (21

[[Page 31830]]

U.S.C. 822, 957) to obtain a registration to manufacture, distribute, 
import, or export regulated chemical mixtures which contain red 
phosphorus, white phosphorus, hypophosphorous acid (and its salts), 
pursuant to Sec. Sec.  1310.12 and 1310.13, is temporarily exempted 
from the registration requirement, provided that DEA receives a 
properly completed application for registration or application for 
exemption on or before July 5, 2011. The exemption will remain in 
effect for each person who has made such application until the 
Administration has approved or denied that application. This exemption 
applies only to registration; all other chemical control requirements 
set forth in parts 1309, 1310, and 1313 of this chapter remain in full 
force and effect.
    (2) Any person who manufactures, distributes, imports, or exports a 
chemical mixture which contains red phosphorus, white phosphorus, 
hypophosphorous acid (and its salts) whose application for exemption is 
subsequently denied by DEA must obtain a registration with DEA. A 
temporary exemption from the registration requirement will also be 
provided for those persons whose applications are denied, provided that 
DEA receives a properly completed application for registration on or 
before 30 days following the date of official DEA notification that the 
application for exemption has not been approved. The temporary 
exemption for such persons will remain in effect until DEA takes final 
action on their registration application.

0
3. Section 1310.12 is amended by revising paragraph (a) and by amending 
the Table of Concentration Limits in paragraph (c) by adding entries 
for ``hypophosphorous acid and its salts'', ``red phosphorus'', and 
``white phosphorus'' in alphabetical order under ``List I Chemicals'' 
to read as follows:


Sec.  1310.12  Exempt chemical mixtures.

    (a) The chemical mixtures meeting the criteria in paragraphs (c) or 
(d) of this section are exempted by the Administrator from application 
of sections 302, 303, 310, 1007, 1008, and 1018 of the Act (21 U.S.C. 
822, 823, 830, 957, 958, and 971) to the extent described in paragraphs 
(b) and (c) of this section.
* * * * *
    (c) * * *

                                          Table of Concentration Limits
----------------------------------------------------------------------------------------------------------------
                                      DEA chemical       Concentration
                                        code No.           (percent)                 Special conditions
----------------------------------------------------------------------------------------------------------------
                                                List I Chemicals
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
Hypophosphorous acid and its salts.            6797  30% by weight if a     The weight is determined by
                                                      solid, weight or       measuring the mass of
                                                      volume if a liquid.    hypophosphorous acid and its salts
                                                                             in the mixture, the concentration
                                                                             limit is calculated by summing the
                                                                             concentrations of all forms of
                                                                             hypophosphorous acid and its salts
                                                                             in the mixture. The Administration
                                                                             does not consider a chemical
                                                                             mixture to mean the combination of
                                                                             a listed chemical and an inert
                                                                             carrier. Therefore, any solution
                                                                             consisting of hypophosphorous acid
                                                                             (and its salts), dispersed in
                                                                             water, alcohol, or another inert
                                                                             carrier, is not considered a
                                                                             chemical mixture and is therefore
                                                                             subject to chemical regulatory
                                                                             controls at all concentrations.
 
                                                  * * * * * * *
Red Phosphorus.....................            6795  80% by weight.         ....................................
 
                                                  * * * * * * *
White phosphorus...................            6796  Not exempt at any      Chemical mixtures containing any
                                                      concentration.         amount of white phosphorus are not
                                                                             exempt due to concentration, unless
                                                                             otherwise exempted.
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------

* * * * *

0
4. Section 1310.13 is amended by revising paragraph (e) and paragraph 
(i) introductory text to read as follows:


Sec.  1310.13  Exemption of chemical mixtures; application.

* * * * *
    (e) Within a reasonable period of time after the receipt of an 
application for an exemption under this section, the Administrator will 
notify the applicant in writing of the acceptance or rejection of the 
application for filing. If the application is not accepted for filing, 
an explanation will be provided. The Administrator is not required to 
accept an application if any information required pursuant to paragraph 
(c) of this section or requested pursuant to paragraph (d) of this 
section is lacking or not readily understood. The applicant may, 
however, amend the application to meet the requirements of paragraphs 
(c) and (d) of this section. If the exemption is subsequently granted, 
the applicant shall again be notified in writing and the Administrator 
shall issue, and publish in the Federal Register, an order on the 
application. This order shall specify the date on which it shall take 
effect. The Administrator shall permit any interested person to file 
written comments on or objections to the order. If any comments or 
objections raise significant issues regarding any findings of fact or 
conclusions of law upon which the order is based, the Administrator may 
suspend the effectiveness of the order until he has reconsidered the 
application in light of the comments and objections filed. Thereafter, 
the Administrator shall reinstate, terminate, or amend the original 
order as deemed appropriate.
* * * * *
    (i) The following chemical mixtures, in the form and quantity 
listed in the application submitted (indicated as the ``date'') are 
designated as exempt chemical mixtures for the purposes set forth in 
this section and are exempted by the Administrator from application of 
Sections 302, 303, 310, 1007, 1008, and 1018 of the Act (21 U.S.C. 822, 
823, 830, 957, 958, and 971):
* * * * *


[[Page 31831]]


    Dated: May 16, 2011.
Michele M. Leonhart,
Administrator.
[FR Doc. 2011-13686 Filed 6-1-11; 8:45 am]
BILLING CODE 4410-09-P