[Federal Register Volume 85, Number 210 (Thursday, October 29, 2020)]
[Rules and Regulations]
[Pages 68450-68461]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-19311]


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DEPARTMENT OF JUSTICE

Drug Enforcement Administration

21 CFR Parts 1300, 1309, 1310, 1313, and 1314

[Docket No. DEA-485]
RIN 1117-AB05 and 1117-AB06


Implementation of the Combat Methamphetamine Epidemic Act of 
2005; Retail Sales; Notice of Transfers Following Importation or 
Exportation

AGENCY: Drug Enforcement Administration, Department of Justice.

ACTION: Final rule.

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SUMMARY: In March 2006, the President signed the Combat Methamphetamine 
Epidemic Act of 2005 (CMEA). The Drug Enforcement Administration (DEA) 
promulgated an Interim Final Rule (IFR) on September 26, 2006 (with a 
technical correction on October 13, 2006), under Docket Number DEA-
291I, to implement the retail sales provisions of the CMEA. 
Additionally, on April 9, 2007, DEA promulgated an IFR, under Docket 
Number DEA-292I, to implement section 716 of the CMEA, which required 
additional reporting for import, export, and international transactions 
involving all list I and list II chemicals. DEA is finalizing these 
rulemakings in one action. This final rule adopts, with one technical 
change, the corrected September 2006 IFR, and adopts, without change, 
the April 2007 IFR.

DATES: Effective December 28, 2020. The effective date of December 28, 
2020, for the interim final rules published September 26, 2006 (71 FR 
56009) and April 9, 2007 (72 FR 17401), is confirmed.

FOR FURTHER INFORMATION CONTACT: Scott A. Brinks, Diversion Control 
Division, Drug Enforcement Administration, 8701 Morrissette Drive, 
Springfield, VA 22152, Telephone (571) 362-3261.

SUPPLEMENTARY INFORMATION:

I. Background

    On March 9, 2006, the President signed the Combat Methamphetamine 
Epidemic Act of 2005 (CMEA), which is title VII of the USA PATRIOT 
Improvement and Reauthorization Act of 2005 (Pub. L. 109-177). The Drug 
Enforcement Administration (DEA) published interim final rules (IFRs) 
on September 26, 2006 (71 FR 56008)--with a technical correction on 
October 13, 2006 (71 FR 60609)--and April 9, 2007 (72 FR 17401) to 
implement certain provisions of the CMEA.

[[Page 68451]]

    On December 30, 2016, DEA published a final rule ``Revision of 
Import and Export Requirements for Controlled Substances, Listed 
Chemicals, and Tableting and Encapsulating Machines, Including Changes 
To Implement the International Trade Data System (ITDS); Revision of 
Reporting Requirements for Domestic Transactions in Listed Chemicals 
and Tableting and Encapsulating Machines; and Technical Amendments.'' 
81 FR 96992. This final rule included further amendments to amendments 
implemented by the September 2006 and April 2007 IFRs.

A. September 2006 IFR

    The CMEA established new requirements for the retail sale of 
products containing the list I chemicals ephedrine, pseudoephedrine, 
and phenylpropanolamine which may be marketed or distributed lawfully 
in the United States under the Federal Food, Drug, and Cosmetic Act as 
a nonprescription drug. These products, known under the CMEA as 
scheduled listed chemical products, can be used to manufacture 
methamphetamine illegally. To implement those requirements, the 
September 2006 IFR established daily and 30-day limits on the sales of 
scheduled listed chemical products to individuals, and established 
recordkeeping on most retail sales. More detailed information can be 
found in the preamble to the September 2006 IFR. On October 13, 2006, 
at 71 FR 6069, a technical correction was published for Table 3 on page 
56014 in the September 2006 IFR.

B. April 2007 IFR

    The April 2007 IFR implemented section 716 of the CMEA to require 
additional reporting for import, export, and international transactions 
involving all list I and list II chemicals, and in so doing, closed a 
loophole in the regulatory system. Briefly, section 716 of the CMEA (21 
U.S.C. 971 as amended) extends the current reporting requirements--as 
well as the current exemptions for regular importers and regular 
customers--to post-import and post-export transactions of list I and 
list II chemicals. With implementation of this IFR, importers, 
exporters, brokers, and traders are required to notify DEA, before the 
transaction is to take place, of certain information regarding their 
downstream customers. This person is referred to as the ``transferee'' 
of the United States importer, exporter, broker, or trader. 
Notification occurs on a new DEA Form 486.\1\ If the transferee 
changes, or the quantity of the chemical is increased after initial 
notification to DEA, the importer, exporter, broker, or trader must 
file an amended DEA Form 486 with DEA. Within 30 days after the 
importation, exportation, or international transaction is completed, 
the importer, exporter, broker, or trader must send DEA a return 
declaration containing information regarding the transaction.
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    \1\ DEA Form 486 is titled ``Import/Export Declaration for List 
I and List II Chemicals'' and is available online at 
www.deadiversion.usdoj.gov.
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C. Updates to September 2006 and April 2007 IFRs Due to the ITDS Rule

    On December 30, 2016, DEA published the ITDS rule. 81 FR 96992. The 
ITDS rule was scheduled to become effective January 30, 2017. However, 
the effective date was delayed until March 21, 2017. 82 FR 8688.
    The ITDS rule updated DEA's regulations for the import and export 
of tableting and encapsulating machines, controlled substances, and 
listed chemicals, and its regulations relating to reports required for 
domestic transactions in listed chemicals, gammahydroxybutyric acid, 
and tableting and encapsulating machines. The amendments clarified 
certain policies, reflected current procedures and technological 
advancements, and implemented Executive Order (E.O.) 13659 on 
streamlining the export/import process. The ITDS rule additionally 
implemented changes to the Controlled Substances Import and Export Act 
for reexportation of controlled substances among members of the 
European Economic Area made by the Improving Regulatory Transparency 
for New Medical Therapies Act (Pub. L. 114-89). The rule also included 
additional substantive and technical and stylistic amendments.
    The ITDS rule included further changes to certain amendments 
implemented by the September 2006 and April 2007 IFRs. This current 
final rule does not make any changes to those further amendments.

II. Discussion of Public Comments Received on September 2006 IFR

    DEA received 18 comments on the September 2006 IFR. Commenters 
included trade associations for convenience stores and grocery stores, 
a law firm, a pharmaceutical organization, a non-pharmaceutical 
organization, individual pharmacists, and retailers.
    Logbooks: Five commenters objected to the requirement for a bound 
logbook for paper records. One commenter stated that DEA exceeded its 
authority in requiring that the logbook be bound, because the CMEA 
includes no such mandate. Other commenters focused on practical 
problems with bound logbooks. One chain drug store stated that to 
comply with State requirements to check the logbooks for the past 30 
days, it used alphabetical logs that allowed for pages to be inserted. 
Other commenters stated that available bound logbooks do not meet DEA 
requirements, and that retailers would have to order customized books 
at considerable expense or customize blank logbooks by hand. One 
commenter stated that spiral logbooks should be acceptable if they have 
page numbers. Other commenters recommended that DEA adopt more flexible 
requirements. One suggested that DEA only require that the pages of the 
logbook not be readily removable, altered, or copied without the change 
being detectable. Another commenter stated that DEA should simply 
require tamper-evident logs. This commenter stated that DEA had 
presented no information about why tamper-evident logbooks are 
important to thwart illegal use of scheduled listed chemical products.
    DEA Response: In its regulations implementing the CMEA, DEA 
required bound logbooks for paper logs because the other types of 
logbooks suggested can be tampered with simply by removing pages. 
Tamper-proof paper would prevent alteration of the records, but would 
not prevent removal of pages. DEA noted that pharmacies are required to 
maintain bound logbooks for sales of certain schedule V controlled 
substances. DEA and the CMEA also allowed regulated sellers to maintain 
logs electronically.
    In October 2008, the President signed the Methamphetamine 
Production Prevention Act of 2008 (MPPA) (Pub. L. 110-415). The MPPA 
clarified the information entry and signature requirements for 
electronic logbook systems permitted for the retail sale of scheduled 
listed chemical products. The MPPA allows regulated sellers to choose 
between maintaining a written or electronic logbook. For regulated 
sellers who choose to maintain a written logbook, the MPPA requires 
that the logbook be bound.\2\ However, with respect to electronic 
logbook systems, the MPPA provides greater flexibility for sellers of 
scheduled listed chemical products. DEA implemented the

[[Page 68452]]

provisions of the MPPA in a final rule published December 1, 2011. 76 
FR 74696.
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    \2\ Public Law 110-415, Sec. 2, ``Clarifications Regarding 
Signature Capture and Retention for Electronic Methamphetamine 
Precursor Logbook Systems.''
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    Privacy Issues: Five commenters were concerned about the 
requirements related to protecting information entered into logbooks 
from exposure. As a practical matter, these commenters focused on paper 
logs, where previous customer entries may be seen by subsequent 
purchasers. Commenters asked DEA to define what ``accessed'' and 
``shared'' mean, and to indicate that ``shared'' does not mean 
incidental disclosure to other customers using the same page.
    Associations representing retailers stated that DEA should state 
that the records are not ``protected health information'' subject to 
the Health Insurance Portability and Accountability Act (HIPAA). One 
commenter noted that States have decided that the logs are not HIPAA 
protected. Another commenter stated that the log information is not 
sensitive; customers have been purchasing these products off the 
shelves for years without any expectation of privacy. The products can 
be used for a number of conditions and, therefore, reveal little about 
the purchaser's condition. This commenter also stated that limiting the 
log to a single entry per page would be expensive. An organization 
representing pharmacists stated that the logs should be considered 
subject to HIPAA and that customers should see only their own 
information.
    One retailer asked DEA to clarify what methods are acceptable to 
prevent other customers from seeing the information. One pharmacist 
stated that requesting a form of identification and entering data into 
the log was an invasion of privacy. Two pharmacists noted that the 
process is time consuming.
    DEA Response: The CMEA provides requirements regarding the 
protection of logbook information. In regard to the disclosure of 
collected information, the CMEA established restrictions on disclosure 
of information in logbooks to protect the privacy of individuals who 
purchase scheduled listed chemical products. 21 U.S.C. 830(e)(1)(C).
    The logbook privacy protections set forth by the CMEA are 
implemented by DEA to closely resemble the language in the CMEA.\3\ By 
adopting the statutory language regarding protection of logbooks in the 
regulations virtually without change, DEA has provided regulated 
sellers the greatest flexibility possible to ensure that customer 
information is protected, without dictating specific requirements.
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    \3\ DEA regulations regarding logbook privacy protections also 
include a provision which states that ``[a] regulated seller who in 
good faith releases information in a logbook to Federal, State, or 
local law enforcement authorities is immune from civil liability for 
the release unless the release constitutes gross negligence or 
intentional, wanton, or willful misconduct.'' 21 CFR 1314.45(c).
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    The United States Department of Health and Human Services' Office 
of Civil Rights enforces HIPAA,\4\ and it is the responsibility of 
covered entities (including pharmacies) to ensure that all aspects of 
their business practices are HIPAA compliant.\5\ The covered entity is 
responsible for adequate safeguards and policies to ensure that 
protected health information in logbooks is not disclosed. DEA is not 
responsible for ensuring that such entities have the necessary 
safeguards in place to ensure that protected health information is not 
disclosed. DEA does not have authority to enforce HIPAA. However, 21 
CFR 1314.45 provides privacy protections to purchasers of scheduled 
listed chemical products by restricting the disclosure of information 
collected in logbooks. Scheduled listed chemical products are sold in a 
wide variety of settings, from large retail chains where information is 
captured at general checkout lines to small pharmacies where 
information is captured at the pharmacy counter. To define the terms 
``access'' and ``share'' in relation to logbook information could 
unnecessarily and adversely impact the sales of scheduled listed 
chemical products by regulated sellers.
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    \4\ The HIPPA Privacy Rule implemented national standards to 
protect personal health information which requires covered entities 
to implement appropriate administrative, technical, and physical 
safeguards to reasonably protect personal health information (with 
limited exceptions including information transmitted in writing, 
orally, or electronic form) from intentional or unintentional use or 
disclosure. See 67 FR 53182, 53193 (Aug. 14, 2002).
    \5\ https://www.hhs.gov/hipaa/for-professionals/compliance-enforcement/examples/all-cases/index.html?language=en#case20.
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    Although the process requires additional time, the CMEA required 
that the purchaser sign the logbook, enter the purchaser's name and 
address, the date and time of sale, and that the regulated seller enter 
the name and quantity of the product sold. The CMEA further required 
that the regulated seller determine that the name on the identification 
presented by the purchaser corresponds to the name entered by the 
purchaser in the logbook. DEA had no discretion in the implementation 
of these requirements.
    Other Logbook Issues: One association stated that the log entry 
requirements should be more flexible. Other than the signature, the 
commenter believed that DEA should not specify who has to enter the 
other data. The commenter suggested that stickers could be used to 
identify the product information other than the number of containers. 
Another retail association stated that DEA should allow others to enter 
the data when the purchaser is unable to do so (e.g., because of a 
disability).
    DEA Response: The CMEA required that the purchaser enter certain 
specific information as specified in 21 U.S.C. 830(e). DEA implemented 
those provisions in the September 2006 IFR. DEA sought to balance its 
statutory obligations while recognizing that with electronic logbooks, 
it may be difficult or impossible for some purchasers to enter the 
required information. To ensure that all persons were able to purchase 
scheduled listed chemical products at retail, DEA made an allowance at 
21 CFR 1314.30(c) that if the purchaser were feasibly unable to do so, 
the regulated seller may ask for and enter the information 
electronically. This is similar to the regulated seller entering the 
information when the information must be entered into an electronic 
system that is not easily accessible to the customer.
    Subsequent to DEA's implementation of the CMEA, the MPPA was 
passed, revising the information entry and signature requirements for 
electronic logbook systems permitted for the retail sale of scheduled 
listed chemical products. The MPPA allows for flexibility with its 
provisions relating to log entry requirements. Under the MPPA, 
regulated sellers of scheduled listed chemical products may choose from 
several options relating to how purchaser signatures may be obtained 
and how transactions may be recorded. 21 U.S.C. 830(e)(1)(A)(iv). DEA 
published a final rule on December 1, 2011, which implemented the MPPA. 
76 FR 74696.
    Federal/State Issues: Several commenters raised issues related to 
different Federal and State laws related to retail sales of scheduled 
listed chemical products. One association asked DEA to provide guidance 
on how to reconcile conflicting requirements on logbooks. The commenter 
asked whether a regulated seller would have to maintain two separate 
logbooks if State law requires different information than Federal law. 
Another association stated that DEA should allow the use of a single 
logbook to capture information for both requirements. The association 
asked DEA to provide a State-by-State analysis to let regulated sellers 
know which provisions apply in each State. Another association stated 
that compliance with a State rule that is as stringent or more 
stringent than DEA's should satisfy DEA's requirements. One

[[Page 68453]]

chain pharmacy stated that DEA should allow electronic capture of State 
information and manual capture of additional DEA elements rather than 
require two separate sets of logs.
    DEA Response: Regulated sellers may use a single logbook for 
capturing Federal and State requirements provided that the data entered 
includes all of the elements required under the CMEA. If the data 
required by Federal law and State law is so markedly different that it 
cannot be merged easily, or if regulated sellers wish to do so for 
other reasons, regulated sellers may also use separate systems. If a 
State's requirements include all of the CMEA's requirements, a separate 
logbook need not be created. DEA, however, does not have the authority 
to alter the CMEA requirements.
    Warning Notice: The CMEA requires that regulated sellers post a 
warning notice to inform customers that providing false information is 
a violation of Federal law. One commenter stated that DEA should 
recognize that any of the following meets the requirements for 
providing notice: Displaying the notice under glass near the logbook; 
putting it on the wall behind the logbook; or putting it on the cover 
of the logbook. The commenter also recommended that DEA allow mandated 
State notices to replace the Federal notice, because multiple warning 
notices can be confusing to the customer.
    DEA Response: The CMEA mandated the warning notice; a State notice 
cannot substitute for the statutorily required warning that entering 
false statements or misrepresentations is a violation of Federal law. 
The regulation for placement of the notice provides regulated sellers 
with flexibility on placement of the notice. The only requirement is 
that the notice either be included in the written or electronic 
logbook, or displayed by the logbook. 21 CFR 1314.30(d).
    Photographic Identification: One association stated that DEA should 
clarify that regulated sellers are only required to check the 
photographic identification to ensure that the name entered into the 
log is the same as the name on the identification and that the date and 
time are correct. In addition, the association claimed that the CMEA 
does not require a regulated seller to refuse to sell the product if 
the name is not correct. The commenter noted that there may be 
legitimate reasons for discrepancies (e.g., such as name or address 
change since the issuance of the identification). In addition, clerks 
could be at risk if they challenged a customer.
    DEA Response: The CMEA required that the regulated seller determine 
that the name entered into the logbook matches the name on the 
identification presented. The prospective purchaser must provide an 
appropriate identification card and signature and the seller must 
confirm the identification provided matches the information entered 
into the logbook.\6\
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    \6\ The CMEA provision at 21 U.S.C. 830(e)(1)(A)(iv) stated ``In 
the case of a sale to which the [logbook] requirement . . . applies, 
the seller does not sell such a product unless . . . the prospective 
purchaser . . . presents an identification card that provides a 
photograph and is issued by a State or the Federal Government, or a 
document that, with respect to identification, is considered 
acceptable for purposes of sections 274a.2(b)(1)(v)(A) and 
274a.2(b)(1)(v)(B) of title 8, Code of Federal Regulations (as in 
effect on or after [March 9, 2006]); and . . . signs the logbook and 
enters in the logbook his or her name . . . and the seller . . . 
determines that the name entered in the logbook corresponds to the 
name provided on such identification . . . . .''
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    DEA recognizes that there will be times when names listed on an 
identification may not correspond to information entered into logbooks, 
due to marriage, name change, etc. However, DEA emphasizes that 
regulated sellers are required to comply with the CMEA, including not 
selling a product to customers if the name the customer entered into 
the logbook does not match the identification presented.
    The MPPA amended section 310(e)(1)(A) of the CSA (21 U.S.C. 
830(e)(1)(A)) to provide flexibility in the creation and maintenance of 
electronic logbooks, while retaining the CMEA's basic requirement that 
the regulated seller determine that the name entered into the logbook 
matches the name on the identification presented: In the case of a sale 
to which the [logbook requirement] applies, the seller does not sell 
such a product unless the sale is made in accordance with the 
following: The logbook maintained by the seller includes the 
prospective purchaser's name, address, and the date and time of the 
sale, as follows:
    If the purchaser enters the information, the seller must determine 
that the name entered in the logbook corresponds to the name provided 
on such identification. If the seller enters the information, the 
prospective purchaser must verify that the information is correct.\7\
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    \7\ Public Law 110-415, Sec. 2, ``Clarifications Regarding 
Signature Capture and Retention for Electronic Methamphetamine 
Precursor Logbook Systems.''
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    Identification for Mail-Order Distributors: An internet pharmacy 
stated that requiring a photographic identification for mail-order 
sales was not helpful. The retailer collects the purchaser's name, 
credit card name, billing address, shipping address, and email address. 
The retailer is not in a position to verify the photographic 
identification. In addition, a copy of a photographic identification 
can be manipulated to change information. The commenter believed that 
the requirement is an unreasonable burden on the consumer that does 
little to prevent illicit sales.
    DEA Response: The CMEA intends for the retailer to verify the 
identity of the customer, whether that retailer is a regulated seller 
or a mail-order distributor. For regulated sellers, the CMEA was clear 
and specific in its requirements.\8\ The purchaser is required to 
present a photographic identification or other permissible form of 
identification. 21 U.S.C. 830(e)(1)(A)(iv)(I)(aa). The regulated seller 
must then ``determine that the name entered in the logbook corresponds 
to the name provided on such identification . . .'' 21 U.S.C. 
830(e)(1)(A)(iv)(III)(aa).\9\
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    \8\ In addition to the CMEA, section 2 of the Combat 
Methamphetamine Enhancement Act of 2010 (MEA) (Pub. L. 111-268) 
requires that ``the Attorney General shall by regulation establish 
criteria for certifications of mail-order distributors that are 
consistent with the criteria established for certifications of 
regulated sellers . . . .'' DEA published an IFR on April 13, 2011, 
which implemented this MEA section. 76 FR 20518.
    \9\ This statutory cite denotes the provision in the MPPA. This 
requirement in the CMEA was denoted at 21 U.S.C. 
830(e)(1)(A)(iv)(II)(aa).
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    Mail-order distributors are no less regulated. While mail-order 
distributors do not conduct face-to-face transactions, they still need 
to confirm purchaser identity. The CMEA states that mail-order 
distributors ``shall, prior to shipping the product, confirm the 
identity of the purchaser in accordance with procedures established by 
the Attorney General.'' 21 U.S.C. 830(e)(2)(A). In its regulations 
implementing the CMEA, DEA interpreted the requirement to ``confirm the 
identity of the purchaser'' to mean that mail-order distributors must 
``receive from the purchaser a copy'' of a photographic identification 
or other permissible form of identification. 21 CFR 1314.105(a).
    The requirement that mail-order distributors receive a copy of the 
purchaser's photographic identification is perhaps even more important 
due to the anonymity of the transactions. Providing a copy of a 
photographic identification issued by a Federal or the State 
government, or a copy of another document permissible for 
identification purposes, lends credence to the name and address given 
by phone, fax, or internet during the order process. It is

[[Page 68454]]

no more unreasonable to require the mail-order distributor to compare 
the name and address on the identification with the name and address 
given on the order, than it is for a regulated seller to compare the 
information presented by the purchaser with the information entered 
into the logbook as part of the face-to-face transaction.
    Daily and 30-day Limits: Two commenters raised questions about the 
daily and 30-day limits set in the CMEA. Both stated that DEA should 
include the CMEA language to clarify that retailers are not expected to 
check the logbooks to determine if a customer is exceeding the daily or 
30-day limits. One of the commenters stated that the 30-day limit 
applies only to the purchaser, not the retailer. The same commenter 
stated that DEA should waive the 30-day and daily limits for mail-order 
sales if the retailer has a system in place to prevent a customer from 
exceeding the CMEA limits in a year with monthly reports to DEA. This 
commenter also recommended that the daily limit should be a calendar 
day, not any 24-hour period.
    DEA Response: DEA has not included the language from the statute 
because it is part of the penalty provisions, which are not included in 
the regulations. DEA has no authority to waive the requirements for 
mail-order distributors, including the daily and 30-day sales limits, 
regardless of any steps the mail-order distributor chooses to take 
regarding sales of scheduled listed chemical products. Finally, as 
discussed in the September 2006 IFR, DEA has set the 24-hour period as 
a calendar day.
    Certification: Four associations commented on the self-
certification process. Two supported the annual certification versus a 
more frequent process. One association noted that turnover of staff was 
about 130 percent a year; updating the certification for each new staff 
would be unnecessarily burdensome. One association suggested allowing 
small rural stores to submit certifications through state associations. 
Another association asked that companies with many stores be allowed to 
select a single renewal date so that the stores are not recertifying at 
different times. One association asked DEA to clarify whether chains 
had the option to certify stores individually or in batches. One 
association noted that many small businesses do not have computers or 
internet access, making the web-based certification a burden for them.
    DEA Response: The self-certification requires that the regulated 
seller attest to the truthfulness of its certification; the regulated 
seller is liable for misstatements. Therefore, DEA cannot allow third-
party associations to file the certification statements on behalf of 
regulated sellers. Chain stores, however, may file on behalf of their 
individual store locations. If a chain batch files for its stores, they 
will all have the same recertification date. Where regulated sellers 
self-certifying with DEA pursuant to the CMEA are also DEA registrants, 
DEA has worked to ensure that the certification expires in the same 
month, but not necessarily the same year, as DEA registration. DEA will 
continue to handle the certification process through the internet. Even 
a small business owner will have a way to access the internet through a 
business, home, or public computer.
    Certification Signer: One retailer stated that the location manager 
was the appropriate person to sign the certification on behalf of the 
regulated seller. An association stated that DEA should revise its 
certification website, which includes the controlled substance rules 
for who is allowed to sign a registration. The commenter also 
recommended that a person should be allowed to sign if the person is in 
a position to certify that the particular location is in compliance 
with the requirements of the CMEA. Another association stated that DEA 
should clarify the level of knowledge the signer needs and provide 
flexibility on who is authorized to sign. Another commenter stated that 
the rule language regarding the person allowed to sign should be ``on 
behalf of the regulated person or distributor'' not the ``regulated 
seller,'' which is narrower.
    DEA Response: DEA appreciates the comments regarding who should 
sign the certification on behalf of the regulated seller. Regarding the 
regulatory language, only regulated sellers, not regulated persons, 
were required to self-certify under the CMEA. The regulatory text is 
correct as written. In its rule implementing the Combat Methamphetamine 
Enhancement Act of 2010 (CMEA) (Pub. L. 111-268), DEA amended the CFR 
to include three new sections pertaining to mail-order sales (1314.101, 
1314.102, and 1314.103) which included the phrase ``regulated person.'' 
76 FR 20518.
    Certification Fee: Three commenters opposed a fee for 
certification. One pharmacist stated that pharmacies would not carry 
the products if they had to pay a fee. An association stated that a fee 
would disproportionately affect small businesses and sole proprietors, 
which operate on small margins. Another association objected to paying 
DEA to file information that DEA requires them to file.
    DEA Response: DEA appreciates these comments. DEA published a final 
rule establishing self-certification fees for regulated sellers selling 
scheduled listed chemical products at retail on December 29, 2008 (73 
FR 79318). In that rulemaking, DEA waived the self-certification fee 
for persons holding a current, valid DEA registration as a pharmacy to 
dispense controlled substances, and established a $21 self-
certification fee for regulated sellers of scheduled listed chemical 
products that are not DEA pharmacy registrants. In the final rule, DEA 
certified that the rule will not have a significant economic impact on 
a substantial number of small entities whose interests must be 
considered under the Regulatory Flexibility Act (RFA).
    Training: Three associations raised issues related to employee 
training. Two indicated that DEA training material does not recognize 
that not all employees require training; only those who handle the 
product do. The commenter noted that in some stores, the information is 
collected at one location; the checkout clerk merely takes the payment. 
The commenter believed the current training is confusing. One 
association stated that the training implies, improperly, that the 
regulated seller must check the logs for daily and 30-day limits, which 
the CMEA does not require. The commenter also asked DEA to remove the 
reference to phenylpropanolamine, which is not sold at retail as an 
over-the-counter drug. Another association claimed the training 
material needs to be revised to state that the limits apply to 
ephedrine and pseudoephedrine base, not to the product. An association 
stated that DEA should scale back the training record requirements. The 
commenter indicated that the CMEA does not require that all records be 
maintained or that employees sign an acknowledgement of training, let 
alone that the signed acknowledgement be maintained in the personnel 
record.
    DEA Response: DEA appreciates the comments on the training content. 
DEA believes that no changes are needed to the training and the 
training content, as written, is necessary to ensure that employees of 
regulated sellers are properly trained to meet the requirements of the 
CMEA. In addition, DEA does not believe that the discussion of 
phenylpropanolamine should be removed from the training as it is a 
chemical covered by the CMEA. The training content provided by DEA has 
been utilized by industry for over 10 years. Furthermore, to reiterate 
CMEA requirements, all persons who either are responsible for 
delivering scheduled listed chemical products into the

[[Page 68455]]

custody of purchasers or who deal directly with purchasers by obtaining 
payments for the products must receive training regarding the 
requirements of the CMEA. 21 U.S.C. 830(e)(1)(A)(vii). Regulated 
sellers are required to use training provided by DEA, but may augment 
that training with their own information if they so choose. DEA 
disagrees that sellers do not need to retain records of the training. 
Without such records, the regulated seller would not be able to 
document, for itself or for law enforcement that the regulated seller 
had complied with the rule and the CMEA by training its employees.
    Availability: Two pharmacists claimed that the rule had impeded 
access to customers with legitimate needs. The commenters believed that 
most stores are not informing customers of behind-the-counter 
availability. One pharmacist stated that the substitutes were inferior 
with more side effects. The commenter claimed that the rule has not 
reduced illicit methamphetamine production given the internet and other 
sources of the products. One individual stated that distributors are 
limiting the products they supply. One pharmacy customer had asked the 
pharmacy for a prescription for a nonprescription product; another 
pharmacy refused to carry them because of the logbook hassle. The 
commenter asked DEA to require pharmacies and distributors to provide 
the products.
    DEA Response: DEA has no authority to require regulated sellers or 
distributors to carry products or to require stores to inform customers 
of product availability.
    Costs: One chain pharmacy stated that compliance had cost it $2.4 
million to move products behind-the-counter, change signage, train 
workers, and print logs. An association stated that stores would need 
to train more than two people a year. The commenter noted that 
estimates of space costs ignored the limited availability of such 
space. The commenter noted that States require retailers to store 
cigarettes and lottery tickets behind the counter. Many stores have 
marketing and display agreements with cigarette companies. The 
commenter claimed that DEA rule can hurt store sales and marketing 
revenues. In addition, over-the-counter sales of the products spur 
impulse purchases of other products so that, even if the products are a 
small percentage of sales, loss of these sales will have a considerable 
impact on in-store sales. Another association stated that the rule 
would affect a substantial number of small entities, which have fewer 
resources to devote to compliance.
    One commenter raised issues related to the cost of complying with 
the CMEA requirements, such as training, store reconfigurations, and 
logbooks, and estimated the total cost of implementation to be 
approximately $2.26 million for a large chain pharmacy and almost 
$600,000 for a medium-sized pharmacy chain. Another commenter stated 
that DEA's assumptions and estimates regarding annual certification and 
employee training, as well as for behind-the-counter storage and its 
effect on impulse purchases, were inadequate.
    DEA Response: While the placement of these products behind-the-
counter may displace some items, it opens up space on the counter and 
shelves for others. Similarly, while some purchasers of these products 
may then decide to purchase other products, the reverse is also true; 
for some purchasers, these would be the impulse purchases. Finally, DEA 
recognized the impact on small entities, but the CMEA provided no 
discretion to apply different rules to small businesses.
    DEA has no authority to alter the behind-the-counter requirement. 
DEA also notes that the costs mentioned by these commenters are 
generalized and actual costs are unknown. For these reasons, DEA 
continues to believe that this rule will not have a significant 
economic impact on a substantial number of small entities, and has 
certified accordingly pursuant to the RFA, referenced below.
    Other Issues: One association stated that DEA should add provisions 
to the rule to clarify that all retail sellers, not just registrants, 
are subject to the rule. The association also asked for explicit rule 
language to specify that prescription products are not subject to the 
rule.
    DEA Response: The rule is already clear on both these points. The 
CSA, as amended by the CMEA, defines a ``scheduled listed chemical 
product'' in part as ``a product that may be marketed or distributed 
lawfully in the United States under the Federal Food, Drug, and 
Cosmetic Act as a nonprescription drug.'' 21 U.S.C. 802(45)(A)(ii); 21 
CFR 1300.02. Thus, DEA believes no further clarification is necessary. 
Nothing in the definitions of ``regulated seller'' (21 U.S.C. 802(46)) 
or ``retail distributor'' (21 U.S.C. 802(49)), upon which the 
definition of regulated seller is based, discusses or stipulates 
requirements regarding registration. Again, DEA does not believe that 
further clarification is warranted.
    Definition of ``unusual or excessive loss.'' One commenter asked 
for a definition of ``unusual or excessive loss.'' The commenter stated 
that DEA should suspend enforcement until it has clarified loss 
reporting in another rule.
    DEA Response: DEA regulation at 21 CFR 1314.15(a) does not define 
unusual or excessive loss. The phrase applies to a wide range of 
regulated persons, from small stores, to large-scale distributors, to 
manufacturers. The definition of unusual and excessive loss will vary 
too much to develop a single standard or definition applicable to a 
wide range of regulated persons.
    Definition of retail distributor: One commenter stated that the 
definition of retail distributor as codified in the regulations should 
include ephedrine, as it does in the CSA.
    DEA Response: DEA appreciates the commenter noting this 
inconsistency. The CSA definition of ``retail distributor,'' as amended 
by the CMEA, does include ephedrine.\10\ The September 2006 IFR revised 
the definition of ``retail distributor'' at 21 CFR 1300.02(b)(29) to 
conform with the CMEA provision; however, this regulatory definition 
inadvertently omitted ``ephedrine.'' In January 2012, DEA issued a 
technical amendments rule which removed the numbers for each definition 
in 21 CFR 1300.02(b). 77 FR 4228. This final rule revises the 
definition of ``retail distributor'' at 21 CFR 1300.02(b) to include 
ephedrine.
---------------------------------------------------------------------------

    \10\ ``Retail distributor'' is defined as a grocery store, 
general merchandise store, drug store, or other entity or person 
whose activities as a distributor relating to ephedrine, 
pseudoephedrine, or phenylpropanolamine products are limited almost 
exclusively to sales for personal use, both in sales and volume of 
sales, either directly to walk-in customers or in face-to-face 
transactions by direct sales. 21 U.S.C. 802(49)(A).
---------------------------------------------------------------------------

    Lack of notice and comment: An internet retailer objected to the 
lack of notice and comment. The commenter stated that Congress did not 
intend to require photographic identification of purchasers for mail-
order, so the rule was not an extension of Congressional intent. The 
commenter believed that notice and comment would also have given 
retailers time to prepare for compliance; the commenter indicated that 
the requirement for photographic identification requires software and 
process changes that take time. The commenter believed that it is 
unfair to the company and consumers to make this change without 
comment. Another commenter noted that the IFR was published only four 
days before the compliance date, which did not give sellers time to 
comply.
    DEA Response: In regards to mail-orders, the CMEA requires the 
purchaser to present a Federal or State government issued 
identification card that provides a photograph or a

[[Page 68456]]

document that with respect to identification is considered acceptable 
pursuant to 8 CFR 274a.2(b)(1)(v)(A) and 274a.2(b)(1)(v)(B). The 
regulated person must verify that the name and address on the 
identification correspond to the information provided by the purchaser. 
DEA had a very limited period to conform its regulations to the CMEA 
requirements; the law was signed March 9, 2006, with a statutory 
deadline of September 30, 2006. The requirements of the CMEA would have 
gone into effect regardless of the regulations. If DEA had not 
published regulations when it did, procedures would not have been in 
place permitting persons to self-certify; thus, persons could not have 
legally sold scheduled listed chemical products at retail. 
Consequently, there was no time to seek comment prior to the CMEA 
deadlines, nor would comments have altered the requirements that the 
CMEA established. DEA conducted outreach activities to inform industry 
of the statutory requirements prior to the rulemaking, so they had time 
to come into compliance by the statutory deadlines.
    Limitation of sales: One commenter suggested that sales be limited 
to pharmacies; internet sales should be banned. Another commenter 
stated that DEA should control distributors. One asked if liquids could 
be used to make methamphetamine illicitly and suggested that if they 
cannot, sales should be limited to liquids. One pharmacist suggested 
that scheduled listed chemical products be listed as controlled 
substances.
    DEA Response: The CMEA did not provide DEA authority to limit sales 
of scheduled listed chemical products to pharmacies. DEA already 
regulates distributors of scheduled listed chemical products as, prior 
to their retail sale, they are considered list I chemicals. As DEA has 
discussed in other rulemakings regarding implementation of the 
CMEA,\11\ liquid forms of scheduled listed chemical products can be 
used to manufacture methamphetamine illicitly, which is why Congress 
included all forms under the CMEA requirements. Congress did not choose 
to place scheduled listed chemical products in the schedules of 
controlled substances.
---------------------------------------------------------------------------

    \11\ See DEA final rule titled ``Removal of Thresholds for the 
List I Chemicals Pseudoephedrine and Phenylpropanolamine,'' 
published in the Federal Register on November 20, 2007, at 73 FR 
65248.
---------------------------------------------------------------------------

    Small businesses: One commenter representing small to midsize 
businesses that engage in the manufacture, distribution, and sales of 
scheduled listed chemical products and other over-the-counter 
pharmaceuticals, stated that implementation of the CMEA will have a 
significant impact on small business. The commenter noted that small 
enterprises have fewer financial and material resources than their 
larger counterparts, thus making compliance a more expensive business 
expense, and that hundreds of thousands of small retailers, and their 
distributors, will be impacted.
    DEA Response: Although DEA agrees with the commenter that the rule 
affects a substantial number of small entities, for the reasons 
previously discussed, DEA continues to believe that the rule does not 
have a significant economic impact on a substantial number of small 
entities, and has certified accordingly pursuant to the RFA, referenced 
below.

III. Discussion of Public Comments Received on April 2007 IFR

Request for Delay of Effective Date

    DEA received comments from the regulated industry requesting the 
delay of the effective date of the rulemaking to allow industry more 
time to fully comply with the new provisions. The rule originally 
became effective on May 9, 2007. However, after careful consideration 
of the comments received, DEA temporarily stayed the provisions of the 
IFR by 30 days, from May 9, 2007 to June 8, 2007. 72 FR 28601, May 22, 
2007.

Other Comments Received

    DEA received five substantive comments on the IFR. Commenters 
included chemical manufacturers and distributors and national 
associations representing manufacturers of chemicals and flavorings and 
fragrances. DEA has determined that no changes are necessary to the 
rule as implemented as a result of the comments received. Therefore 
this final rule finalizes the IFR without change. The following 
discussion summarizes the issues raised by commenters and DEA's 
response to these issues.

Interpretation of the CMEA

    One commenter disagreed with DEA's requirement that the transferee 
be identified before the import or export can take place. This 
commenter agreed that, while it is clear that Congress intended that 
the transferee be identified before a transfer to a new customer takes 
place, the CMEA does not require the transferee be identified before an 
import or export can take place.
    DEA Response: DEA disagrees with the commenter's interpretation of 
new section 716. Section 716 of the CMEA amended 21 U.S.C. 971 by 
adding a new subsection (d)(1)(A) which states that ``[i]nformation 
provided in a notice under subsection (a) or (b) shall include the name 
of the person to whom the importer or exporter involved intends to 
transfer the listed chemical involved, and the quantity of such 
chemical to be transferred.'' Paragraph (a) of section 971 requires 
each regulated person who imports or exports a listed chemical to 
notify the Attorney General of the importation or exportation not later 
than 15 days before the transaction is to take place. Paragraph (b)(1) 
of section 971 requires the regulated person to notify the Attorney 
General of an importation by a regular importer or an exportation to a 
regular customer at the time the transaction is to take place. Thus, 
paragraph (d)(1)(A) requires the identification of the transferee at 
the time of the provision of DEA Form 486 to DEA.

Request for Extension of Effective Date

    Three commenters objected to the lack of opportunity to comment on 
procedures before the IFR was issued and on the 30-day effective date 
imposed by the IFR, stating that it would not allow industry enough 
time to thoroughly review the new requirements, seek clarification 
regarding unclear provisions, and implement procedures to comply with 
the new requirements. One commenter indicated that it needed additional 
time to modify its computer programming logic to accommodate the 
revisions to DEA Form 486. One commenter believed that DEA's failure to 
conduct notice and comment rulemaking violates the Administrative 
Procedure Act (APA). Two commenters requested a 90-day extension to the 
effective date to allow the industry more time to come into compliance 
with the new rules.
    DEA Response: After careful consideration of the concerns expressed 
by these commenters, DEA temporarily stayed certain provisions of the 
IFR published April 9, 2007. The temporary stay of certain provisions 
was published May 22, 2007 (72 FR 28601). Specifically, DEA temporarily 
stayed the following provisions:
     The waiver of the 15-day advance notification requirement 
for importations of a listed chemical for which the importer intends to 
transfer the listed chemical to a person who is a regular customer of 
the chemical;
     The requirement that importers, exporters, brokers, and 
traders notify DEA of the transferee of the listed chemical;

[[Page 68457]]

     The requirement that importers, exporters, brokers, and 
traders amend DEA Form 486 if the transferee changes or the quantity of 
the chemical to be transferred increases; and
     The requirement that importers, exporters, brokers, and 
traders file return declarations regarding importations, exportations, 
and international transactions with DEA.
    These provisions were already in effect because of their inclusion 
in the CMEA; however, their implementation was temporarily stayed until 
June 8, 2007. The temporary stay applied only to those provisions 
implemented by section 716 of the CMEA. All other provisions regarding 
the importation, exportation, and international transactions involving 
list I and list II chemicals remained in full force and effect.
    DEA did not conduct a Notice of Proposed Rulemaking (NPRM) with an 
opportunity for comment because the CMEA set forth the provisions in 
such detail as to be self-implementing and gave no discretion in its 
implementation. DEA is merely codifying the statutory provisions. Also, 
Congress was clear in its intent that these provisions be implemented 
quickly, which precluded full notice and comment rulemaking. DEA did 
seek comments in the IFR and is responding to these comments in this 
Final Rule.
    With respect to the commenter's allegation that DEA violated the 
notice and comment requirement of the APA, DEA notes that it provided 
an extensive discussion of the ``good cause'' exception to this 
requirement in its April 2007 IFR. DEA acknowledged that the good cause 
exception to the APA's notice and comment procedures is to be 
``narrowly construed and only reluctantly countenanced.'' 72 FR 17405. 
DEA reiterates its position that because the CMEA's provisions 
regarding additional reporting for import, export, and international 
transactions involving list I and list II chemicals were so specific, 
DEA had no discretion in their implementation. DEA merely codified in 
its regulations that which had been explicitly required by Congress in 
section 716 of the CMEA. DEA believes that its use of the good cause 
exception to the APA's notice and comment requirements was entirely 
appropriate in this case.

Transferee Information

    Three commenters stated that the IFR did not address the situation 
where, at the time of import or export, the importer or exporter does 
not intend to transfer the listed chemical to any person. Instead, the 
importer or exporter intends to transfer it to themselves either for 
stock purposes or for later distribution to transferees (downstream 
customers) that will be identified. One commenter described its (first 
in, first out) method of handling inventory and requested clarification 
on whether it can continue to follow that practice, since the exact 
material imported for a particular customer may not always be 
distributed to that customer. Another commenter speculated that DEA 
intended that the importer could list as the transferee another legal 
entity or listed chemical business activity. In this case importers 
could list their own manufacturer or distributor registration 
information. Another commenter suggested that, at the time of import or 
export of listed chemicals, if a transferee (downstream customer) has 
not been identified, DEA Form 486 space for transferee should be 
completed with the name of the importer. This would reflect the 
importer's intention to hold the listed chemicals in inventory. When 
the importer, exporter, broker, or trader later identifies a proposed 
transferee, then they must file an amended DEA Form 486 reporting the 
name of the person to whom the importer or exporter involved intends to 
transfer the listed chemical, and the quantity of such chemical to be 
transferred. Commenters requested that DEA clarify precisely when and 
how the identity of the transferee (downstream customer) must be 
provided if it is not known at the time of import.
    DEA Response: The CMEA is clear in its plain language. As discussed 
above, at the time the advance notification (DEA Form 486) is provided 
to DEA, the importer, exporter, broker, or trader ``shall include the 
name of the person to whom the importer or exporter involved intends to 
transfer the listed chemical involved, and the quantity of such 
chemical to be transferred.'' DEA cannot change this requirement. 
However, DEA notes that the importer or exporter can change the name of 
the transferee included on DEA Form 486 simply by submitting an amended 
DEA Form 486 to DEA. For exports, a chemical may be exported from a 
United States facility of a company to a foreign facility of the same 
company; in that instance, the foreign facility is the transferee of 
the export. For imports, the importer may not list its own name as the 
transferee; however, it may list the name of an affiliated 
manufacturer, or its own manufacturing facility if it holds a separate 
registration as a manufacturer, who will process, repackage, or relabel 
the listed chemical. This is because an importer is permitted to 
distribute that which it imports, but is not permitted to distribute a 
chemical which it imported but which has been processed, packaged, 
labeled, repackaged, or relabeled, subsequent to import. Those 
activities are defined by the CSA as manufacturing activities (21 
U.S.C. 802(15)) and such manufacturing activities may only be carried 
out by a DEA-registered manufacturer.
    DEA recognizes that the exact material imported for a particular 
customer may not always be distributed to that customer. For example, 
DEA does not expect an importer to empty a large vat of liquid 
chemicals based on the order in which DEA Forms 486 were submitted to 
DEA. DEA would also not expect an importer to segment chemicals stored 
in its warehouse based on the specific transferee designated on a 
particular DEA Form 486. So long as all chemicals imported are 
accounted for in terms of importation and distribution to transferees, 
this satisfies the requirements of the CMEA.

Return of Chemicals

    A related issue raised by two commenters addressed how to handle a 
return of a product exported to a foreign customer. One of the 
commenters asked how the supplier (the original exporter), who is now 
an importer, is to deal with the reporting of the transfer. The 
commenter noted that in circumstances involving returns, the 
disposition of the goods may not be decided until they are received 
back into the supplier's inventories.
    DEA Response: In DEA's experience, the return of a product exported 
to a foreign customer is not a routine occurrence; however, when such 
instances arise, the return of such products will be treated as 
imports. Like with all imports, DEA Form 486 must be filed in 
compliance with DEA regulations. DEA further notes that this issue is 
not specific to implementation of the CMEA.

Importation for Exportation

    A commenter requested clarification about a situation where a 
United States company imports listed chemicals for the purpose of 
export. This commenter asked whether it could list a foreign customer 
as the transferee on an import declaration.
    DEA Response: The importation and exportation of the listed 
chemical are separate transactions conducted under separate DEA 
registrations. If a United States importer imports a listed chemical 
for exportation, the United States importer submits to DEA a DEA Form 
486 providing information concerning the United States exporter,

[[Page 68458]]

the United States importer's transferee of the listed chemical. For the 
United States exporter, the transferee is the foreign importer. The 
United States exporter submits a separate DEA Form 486 providing 
information regarding the exportation. Both the importation and 
exportation of the listed chemical require the subsequent submission of 
return declarations for each transaction. Note that the requirement to 
submit separate DEA Forms 486 for the importation and exportation of 
the listed chemical has not been affected by the CMEA.

Regular Customer Status

    One commenter stated that, under the rule, for a customer to obtain 
regular customer status, they must have an established business 
relationship for a specified listed chemical or chemicals that has been 
reported to DEA. The commenter believed that if it has transferred a 
regulated transaction either once in six months or twice in a year and 
the transfer has been reported to DEA, no matter what the chemical 
class, the 15-day advance notice should be able to be waived. If this 
were not the case, the commenter believed that its delivery time to its 
customers would be negatively impacted.
    DEA Response: The requirement that an importer or exporter must 
establish a business relationship with a customer on a chemical-by-
chemical basis to obtain regular customer status was not changed by the 
CMEA or the IFR. DEA views not only each customer independently, but 
also each chemical. There may be cases where a regular customer for one 
chemical may not be approved as a regular customer for a different 
chemical.
    Another commenter requested that DEA clarify whether the 15-day 
advance notification requirement applies to the transfer of a listed 
chemical to regular customers in quantities greater than that indicated 
on the original form. The commenter believed that it is clear that the 
notice applies to new customers in this case. The commenter noted that 
as the transfer of quantities less than that originally reported can be 
transferred to regular customers without advance notification to DEA, 
and only needs to be reported on the return declaration, inventory may 
exist that will allow an importer to transfer a greater quantity than 
originally indicated to regular customers.
    DEA Response: Notification is required for the transfer of a listed 
chemical to regular customers in quantities greater than that indicated 
on the original form; however, the notice need not be sent 15 days in 
advance if the regular customer status has been established. Section 
971(d)(1)(C) states that after a notice under subsection (a) or (b) is 
submitted to the Attorney General, if circumstances change and the 
importer or exporter . . . will be transferring a greater quantity of 
the chemical than specified in the notice, the importer or exporter 
shall update the notice to identify . . . the most recent quantity . . 
. and may not transfer the listed chemical until after the expiration 
of the 15-day period beginning on the date on which the update is 
submitted to the Attorney General, except that such 15-day restriction 
does not apply if the prospective transferee identified in the update 
is a regular customer.

15-Day Advance Notification for Importation of Ephedrine and 
Pseudoephedrine

    One commenter requested clarification regarding the waiver of the 
15-day advance notification requirement for regular importers and 
regular customers with respect to the listed chemicals ephedrine and 
pseudoephedrine. Section 1313.12 of the IFR states that the 15-day 
advance notification can be waived for a regulated person who has 
qualified as a regular importer if the listed chemical is transferred 
to a regular customer. The commenter noted that in 1995 DEA 
disqualified regular importer status for the listed chemicals ephedrine 
and pseudoephedrine; all imports of these chemicals have been subject 
to the advance 15-day notification requirement. The commenter requested 
that DEA confirm whether this disqualification would still be in effect 
after the implementation of the IFR.
    DEA Response: The disqualification of regular importer status for 
ephedrine and pseudoephedrine remains in effect. DEA sent out a 
separate notice to all DEA-registered importers reiterating the 
disqualification of regular importer and regular customer status for 
all importations of the list I chemicals ephedrine, pseudoephedrine, 
and phenylpropanolamine and drug products containing those three list I 
chemicals in May 2007. This notice stated that the disqualification 
from regular importer and regular customer status of the United States 
importer and its transferees is necessary to enforce the provisions of 
the CMEA. The CMEA places stringent controls on the importation, 
manufacture, and retail sale of the list I chemicals ephedrine, 
pseudoephedrine, and phenylpropanolamine because these chemicals--and 
drug products containing them--are used domestically to illicitly 
manufacture methamphetamine and amphetamine, both schedule II 
controlled substances.

Early Submission of Transferee Information

    One commenter requested clarification on how Sec. Sec.  1313.15 and 
1313.08 would apply to future imports. To eliminate the 15-day waiting 
period on all future imports, the commenter requested that it be able 
to submit transferee information to allow for the 15-day advance notice 
to be waived on future imports.
    DEA Response: Importers, exporters, brokers, and traders must 
follow DEA notification requirements for each planned import, export, 
or international transaction, so that DEA can closely monitor imports, 
exports, and international transactions of listed chemicals that may be 
used in the illicit manufacture of controlled substances. The 
submission of transferee information not affiliated with a specific 
importation, exportation, or international transaction is not permitted 
and does not negate any advance notification requirements in effect for 
the transferee.

DEA Form 486, Import/Export Declaration for List I and List II 
Chemicals

    One commenter supported the change of return paperwork 
responsibility being transferred from United States Customs and Border 
Protection to the exporter or importer; however, another commenter 
requested clarification of this change to the procedures for 
distributing the form. Another commenter noted that the instructions 
for DEA Form 486 state that Copy 3 of the export declaration must be 
returned to DEA, while Sec.  1313.23(c) states that ``Copy 3 shall be 
presented to the U.S. Customs Service.''
    Two commenters requested clarification of the requirements for DEA 
Form 486 when a planned importation or exportation does not take place. 
Sections 1313.17 and 1313.27 state that an amended DEA Form 486 must be 
filed, but one commenter suggested that the form should be 
``withdrawn'' and that Sec. Sec.  1313.17 and 1313.27 should be amended 
accordingly.
    DEA Response: The distribution requirements for DEA Form 486 have 
not changed and the importer/exporter must send an original copy of DEA 
Form 486 to the U.S. Customs Service. This has been corrected in the 
instructions for DEA Form 486. The change is that the U.S. Customs 
Service no longer has to certify what is being

[[Page 68459]]

imported or exported. The new return declarations serve as this 
certification.
    Regarding the commenters seeking clarification on DEA Form 486, DEA 
considers any change to a previously submitted form an ``amendment'' 
whether specific information is being amended in the form or the form 
is being withdrawn. When a planned importation or exportation does not 
take place, the importer or exporter must submit an amended DEA Form 
486, marked ``withdrawn'' in the fields provided for that purpose on 
the form.

International Transactions

    One commenter asked how the new requirements apply to international 
transactions, i.e., shipments from a United States-based company's 
facilities in a foreign country to a customer within that country or in 
a different foreign country. Similarly, the commenter asked whether 
shipping a product from the United States to a foreign entity of the 
same company would trigger the requirement to submit a DEA Form 486.
    DEA Response: The definition of ``international transaction'' did 
not change with enactment of the CMEA. The CSA defines an international 
transaction as follows: ``The term `international transaction' means a 
transaction involving the shipment of a listed chemical across an 
international border (other than a United States border) in which a 
broker or trader located in the United States participates.'' 21 U.S.C. 
802(42). DEA has never regulated the shipment of listed chemicals from 
a United States-based company's foreign facilities to other entities 
within the country in which the United States-based company's foreign 
facility is located. If, however, any foreign entity ships a listed 
chemical from one foreign country to another foreign country, and that 
transaction is arranged by a United States broker or trader, the CSA 
and its implementing regulations apply for purposes of international 
transactions. As noted previously, shipping a product from the United 
States to a foreign entity of the same company is an export and must be 
handled as such.

IV. Summary of the Final Rule

    This final rule adopts the September 2006 IFR, with one technical 
change, and the April 2007 IFR, without change, as amended by the ITDS 
rule. The technical amendment to the September 2006 IFR involves the 
definition of the term ``retail distributor.'' The definition of 
``retail distributor'' in 21 CFR 1300.02(b) is being amended to include 
ephedrine so that it will mirror the definition of ``retail 
distributor'' found in the CSA at 21 U.S.C. 802(49)(A). The September 
2006 IFR inadvertently omitted ephedrine from the definition of 
``retail distributor.''

V. Regulatory Analyses

Administrative Procedure Act

    This final rule, with one change to the September 2006 IFR, and 
without change to the April 2007 IFR, affirms the amendments made by 
both IFRs that are already in effect. The APA generally requires that 
agencies, prior to issuing a new rule, publish an NPRM in the Federal 
Register. The APA also provides, however, that agencies may be excepted 
from this requirement when ``the agency for good cause finds (and 
incorporates the finding and a brief statement of reasons therefore in 
the rules issued) that notice and public procedure thereon are 
impracticable, unnecessary, or contrary to the public interest.'' 5 
U.S.C. 553(b)(B).
    As discussed in the September 2006 and April 2007 IFRs, DEA invoked 
this ``good cause'' exception to the APA's notice and comment 
requirements. For the September 2006 IFR, DEA determined that public 
notice and comment were impracticable and contrary to the public 
interest. As for the April 2007 IFR, DEA determined that public notice 
and comment were unnecessary and impracticable. With the publication of 
this final rule, DEA is making a technical amendment to the definition 
of the term ``retail distributor.'' The definition of ``retail 
distributor'' in 21 CFR 1300.02(b), which was set forth in the 
September 2006 IFR, is being amended to include ephedrine so that it 
will mirror the definition of ``retail distributor'' found in the CSA 
at 21 U.S.C. 802(49)(A). The CMEA set forth this definition in such 
detail as to be self-implementing. As explained above in section II, 
DEA inadvertently omitted ephedrine when it set forth the definition of 
``retail distributor'' in the September 2006 IFR. As this definition is 
already in effect, DEA finds that notice and opportunity for comment 
for this technical amendment are unnecessary under the APA (5 U.S.C. 
553(b)(B).

Regulatory Flexibility Act

    The RFA (5 U.S.C. 601-612) applies to rules that are subject to 
notice and comment under section 553(b) of the APA. As noted in the 
above discussion regarding the applicability of the APA, DEA was not 
required to publish a general NPRM prior to this final rule for either 
the September 2006 IFR or the April 2007 IFR. Consequently, the RFA 
does not apply.
    Furthermore, in the September 2006 IFR, although the RFA was 
determined to not apply, DEA reviewed the potential impacts of the IFR. 
The IFR was estimated to affect a substantial number of small entities, 
but DEA did not believe that it would have significant economic impacts 
on small entities. In the IFR, DEA sought comments where DEA had 
discretion in the way in which provisions of the CMEA were implemented 
and regarding impact on manufacturers and distributors. DEA received no 
information that could be used to quantify any impacts and notes that 
reports in trade publications have indicated that sales of cold 
medications, which is where most scheduled listed chemical products are 
classified, have continued to grow. It seems unlikely, therefore, that 
regulated sellers have been significantly impacted by the CMEA 
requirements.

Executive Orders 12866, Regulatory Planning and Review, 13563, 
Improving Regulation and Regulatory Review, and 13771, Reducing 
Regulation and Controlling Regulatory Costs

    This final rule was developed in accordance with the principles of 
E.O. 12866 and 13563. E.O. 12866 directs agencies to assess all costs 
and benefits of available regulatory alternatives and, if regulation is 
necessary, to select regulatory approaches that maximize net benefits 
(including potential economic, environmental, public health, and safety 
effects; distributive impacts; and equity). E.O. 13563 is supplemental 
to and reaffirms the principles, structures, and definitions governing 
regulatory review as established in E.O. 12866. E.O. 12866 classifies a 
``significant regulatory action,'' requiring review by the Office of 
Management and Budget (OMB), as any regulatory action that is likely to 
result in a rule that may: (1) Have an annual effect on the economy of 
$100 million or more or adversely affect in a material way the economy, 
a sector of the economy, productivity, competition, jobs, the 
environment, public health or safety, or State, local, or tribal 
governments or communities; (2) create a serious inconsistency or 
otherwise interfere with an action taken or planned by another agency; 
(3) materially alter the budgetary impact of entitlements, grants, user 
fees, or loan programs or the rights and obligations of recipients 
thereof; or (4) raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or

[[Page 68460]]

the principles set forth in the Executive order.
    DEA had determined that the September 2006 and April 2007 IFRs were 
``significant regulatory action[s]'' under E.O. 12866, section 3(f), 
Regulatory Planning and Review, and accordingly the IFRs were reviewed 
by OMB. DEA estimated that the statutory changes enacted under the 
April 2007 IFR imposed minimal costs on United States importers, 
exporters, brokers, and traders.
    As discussed above, this final rule finalizes the IFRs and makes 
one technical revision to the definition of ``retail distributor,'' 
provided in the September 2006 IFR, to mirror the statutory definition 
of ``retail distributor'' as set forth by the CMEA. Therefore, this 
final rule imposes no cost beyond the costs imposed by the IFRs. OMB 
has determined that this final rule is not a ``significant regulatory 
action'' under E.O. 12866, section 3(f), Regulatory Planning and 
Review, and accordingly this rule has not been reviewed by OMB.
    This final rule is not a significant regulatory action under E.O. 
12866, it does not impose a cost greater than zero. Therefore, this 
final rule is not an E.O. 13771 regulatory action.

Paperwork Reduction Act of 1995

    As stated in the September 2006 and April 2007 IFRs, DEA identified 
information collections and submitted those collection requests to OMB 
for review and clearance in accordance with review procedures of the 
Paperwork Reduction Act of 1995.
    The September 2007 IFR updated DEA regulations for the requirements 
of the CMEA, ``Self-certification, Training and Logbooks for Regulated 
Seller of Scheduled Listed Chemical Products'' (OMB control number 
1117-0046). The CMEA mandated a number of new information collections 
and recordkeeping. Regulated sellers are required to train any employee 
who will be involved in selling scheduled listed chemical products and 
to document the training. Regulated sellers must also self-certify to 
DEA that all affected employees have been trained and that the seller 
is in compliance with all CMEA provisions. Finally, the CMEA mandates 
that each sale at retail be documented in a written or electronic 
logbook and that the logbooks be retained for two years.
    In the April 2007 IFR, DEA revised the information collected on DEA 
Form 486: Import/Export Declaration for list I and list II Chemicals 
[OMB information collection 1117-0023]. Those changes were discussed in 
the IFR and were necessary for DEA to implement the provisions of the 
CMEA.
    DEA received OMB clearance for the information collections in the 
two IFRs. In addition, DEA did not receive any comments to the 
Paperwork Reduction Act aspect of these IFRs and is finalizing that 
aspect of the IFRs without change.

Executive Order 12988, Civil Justice Reform

    This regulation meets the applicable standards set forth in 
sections 3(a) and 3(b)(2) of E.O. 12988 to eliminate drafting errors 
and ambiguity, minimizes litigation, provides a clear legal standard 
for affected conduct, and promotes simplification and burden reduction.

Executive Order 13132, Federalism

    This rulemaking does not have federalism implications warranting 
the application of E.O. 13132. The final rules does not have 
substantial direct effects on the States, on the relationship between 
the national government and the States, or the distribution of power 
and responsibilities among the various levels of government. The rule 
does preempt State laws that are less stringent than the statutory 
requirements. These requirements, however, are mandated under the CMEA 
and DEA has no authority to alter them or change the preemption. 
Accordingly, this rulemaking does not have federalism implications 
warranting the application of E.O. 13132.

Executive Order 13175, Consultation and Coordination With Indian Tribal 
Governments

    This final rule does not have substantial direct effects on the 
States, on the relationship between the national government and the 
States, or the distribution of power and responsibilities between the 
Federal Government and Indian tribes.

Unfunded Mandates Reform Act of 1995

    DEA has determined pursuant to the Unfunded Mandates Reform Act 
(UMRA) of 1995, 2 U.S.C. 1501 et seq., that this action would not 
result in any Federal mandate that may result in the expenditure by 
State, local, and tribal governments, in the aggregate, or by the 
private sector, of $100,000,000 or more (adjusted for inflation) in any 
one year. Therefore, neither a Small Government Agency Plan nor any 
other action is required under provisions of the UMRA of 1995.

Congressional Review Act

    This is a major rule as defined by section 804 of the Small 
Business Regulatory Enforcement Fairness Act of 1996 (Congressional 
Review Act) (CRA). As explained in the September 2006 and April 2007 
IFRs, the April 2007 IFR was not a major rule; however, the September 
2006 IFR was a major rule. This final rule finalizes the IFRs and makes 
one technical revision to the definition of ``retail distributor'' in 
the September 2006 IFR to mirror the statutory definition of ``retail 
distributor.'' Therefore, this final rule imposes no cost beyond the 
costs imposed by the IFRs. Pursuant to the CRA, DEA has delivered 
copies of this rule to both Houses of Congress and to the Comptroller 
General.
    A major rule generally cannot take effect until 60 days after the 
date on which the rule is published in the Federal Register. 5 U.S.C. 
801(a)(3). However, the CRA provides that ``any rule for which an 
agency for good cause finds (and incorporates the finding and a brief 
statement of reasons therefor in the rule issued) that notice and 
public procedure thereon are impracticable, unnecessary, or contrary to 
the public interest, shall take effect at such time as the Federal 
agency promulgating the rule determines.'' 5 U.S.C. 808. As noted in 
the above discussion regarding the applicability of the APA, DEA was 
not required to publish a general NPRM. Therefore, this final rule 
takes effect as outlined in the ``Dates'' section of this final rule.

List of Subjects

21 CFR Part 1300

    Chemicals, traffic control.

21 CFR Part 1309

    Administrative practice and procedure, Drug traffic control, 
Exports, Imports, Security measures.

21 CFR Part 1310

    Drug traffic control, exports, imports, reporting and recordkeeping 
requirements.

21 CFR Part 1314

    Drug traffic control, Reporting and recordkeeping requirements.

    For the reasons stated in the preamble, the IFR amending 21 CFR 
parts 1300 and 1313, which was published at 72 FR 17401 on April 9, 
2007, is adopted as a final rule, without change, and the IFR amending 
21 CFR parts 1300, 1309, 1310, 1313, and 1314, which was published at 
71 FR 56008 on September 26, 2006 (correction at 71 FR 60609 on October 
13, 2006), is adopted as a final rule, with the following change, as 
amended by the final rule published on December 30, 2016 (81 FR

[[Page 68461]]

96992), effective January 30, 2017, and delayed on January 30, 2017 (82 
FR 8688), until March 21, 2017 (82 FR 8688):

PART 1300--DEFINITIONS

0
1. The authority citation for part 1300 continues to read as follows:

    Authority: 21 U.S.C. 802, 821, 822, 829, 871(b), 951, 958(f).


0
2. Amend Sec.  1300.02(b) by removing ``pseudoephedrine or 
phenylpropanolamine'' from the definition of ``Retail distributor'' and 
adding in its place ``ephedrine, pseudoephedrine, or 
phenylpropanolamine''.

Timothy J. Shea,
Acting Administrator.
[FR Doc. 2020-19311 Filed 10-28-20; 8:45 am]
BILLING CODE 4410-09-P