Comprehensive Methamphetamine Control Act of 1996; Possession of List I Chemicals, Definitions, Record Retention, and Temporary Exemption From Chemical Registration for Distributors of Combination Ephedrine Products

DEPARTMENT OF JUSTICE

Drug Enforcement Administration

21 CFR Parts 1309, 1310, and 1313

[DEA Number 154I]

RIN 1117-AA42

Comprehensive Methamphetamine Control Act of 1996; Possession of

List I Chemicals, Definitions, Record Retention, and Temporary

Exemption From Chemical Registration for Distributors of Combination

Ephedrine Products

AGENCY: Drug Enforcement Administration (DEA), Justice.

ACTION: Interim rule with request for comments.

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SUMMARY: DEA is amending its regulations to incorporate certain

amendments of the Controlled Substances Act (CSA) made by the

Comprehensive Methamphetamine Control Act of 1996 (MCA) and to provide

temporary exemption from registration for persons who distribute

combination ephedrine drug products. The MCA amends the CSA with

respect to: possession of listed chemicals following suspension or

revocation of registration; the record retention requirements for List

I chemical transactions; certain definitions; and establishes the

requirement that, effective October 3, 1996, persons that distribute

combination ephedrine products shall be subject to the chemical

registration requirement. To avoid interruption in the legitimate

distribution of combination ephedrine products, DEA is amending its

regulations to provide certain temporary exemptions from the

registration requirement pending promulgation of final regulations.

DATES: Effective February 10, 1997. Written comments or objections must

be submitted on or before April 11, 1997.

ADDRESSES: Comments and objections should be submitted in quintuplicate

to the Deputy Assistant Administrator, Office of Diversion Control,

Drug Enforcement Administration, Washington, D.C. 20537, Attention: DEA

Federal Register Representative/CCR.

FOR FURTHER INFORMATION CONTACT: G. Thomas Gitchel, Chief, Liaison and

Policy Section, Office of Diversion Control, Drug Enforcement

Administration, Washington, D.C. 20537, Telephone (202) 307-7297.

SUPPLEMENTARY INFORMATION: The Comprehensive Methamphetamine Control

Act of 1996 was enacted on October 3, 1996. Among its provisions, the

MCA contained revisions of the Controlled Substances Act (CSA) with

respect to possession of listed chemicals following revocation or

suspension of registration, the record retention requirements for

transactions involving List I chemicals and tableting or encapsulating

machines, and definitions, of ``regulated transaction'', ``retail

distributor'', and ``combination ephedrine product''. To accommodate

the amendments made by the MCA, DEA is making the following changes to

Title 21, Code of Federal Regulations (CFR):

21 CFR 1309.43 Suspension or Revocation of Registration

The MCA amends Section 404 of the CSA (21 U.S.C. 844) to make it

unlawful for any person to knowingly or intentionally possess any list

I chemical obtained under the authority of a registration or an

exemption from registration granted by the Administrator by regulation,

if that registration or exemption has been revoked or suspended. The

revised language also makes it illegal to possess list I chemicals

obtained under the authority of a registration or an exemption granted

by regulation by the Administrator, if the registration has expired or

if the registrant has ceased to do business as originally intended

under that registration.

To reflect the amendments in the law, DEA is revising 21 CFR

1309.43, to include seizure and forfeiture instructions. Persons whose

registrations or exemptions have been revoked or suspended shall be

required, upon service of the notice of revocation or suspension, to

surrender all List I

[[Page 5915]]

chemicals in their possession obtained under the authority of a

registration or an exemption from registration granted by the

Administrator by regulation, to the nearest office of the

Administration or authorized agent of the Administration, or place such

List I chemicals under seal as described in 21 U.S.C. 824(f). When the

suspension or revocation is limited to certain chemicals, the

registrant shall surrender those chemicals affected by the revocation

or suspension as indicated above.

21 CFR 1309.02, 1310.01 & 1313.02 Definitions

The definition of ``retail distributor'' found in Sec. 1309.02(f)

has been amended by the MCA. As defined by the MCA, the term refers to

persons, such as grocery stores, general merchandise stores, drug

stores, etc., that engage in sales of pseudoephedrine,

phenylpropanolamine, and combination ephedrine drug products almost

exclusively to individuals for personal use in face-to-face

transactions. The new definition will apply to all retail distributors

of regulated drug products, including single entity ephedrine products.

The MCA also amends the definition of ``regulated transaction'' to

make all ephedrine products and certain drug products containing

pseudoephedrine and phenylpropanolamine subject to regulation. However,

because the provisions relating to pseudoephedrine and

phenylpropanolamine products will not become effective until October 3,

1997, the definition of ``regulated transaction'', as found in 21 CFR

1310.01(f) and 1313.02(d), is being amended only with respect to

ephedrine products at this time. The MCA also defines ``combination

ephedrine product''; that definition, together with the appropriate

guidelines clarifying the specific criteria established by the

definition, has been added to Secs. 1309.02 and 1310.01.

As a result of the amendment to the definition of ``regulated

transaction'', persons who distribute, import, or export combination

ephedrine products are now subject to the chemical registration,

recordkeeping, and reporting requirements. As noted later in this

document, DEA is establishing certain temporary exemptions from the

registration requirement pending promulgation of regulations, subject

to notice and comment, relating to the control of combination ephedrine

products.

21 CFR 1310.02 Substances Covered and 21 CFR 1310.04 Maintenance of

Records

The MCA amends Section 802(34) of the CSA to correct the spelling

of ``Isosafrole'' and ``hydriodic acid'' and Section 830(a) to modify

the record retention period from the current 4 years to 2 years for all

transactions involving a listed chemical or a tableting or

encapsulating machine. The corresponding amendments are being made in

the regulations. With respect to the change in the record retention

period, the new language of the law does not distinguish between

records created before and after the change in the retention

requirement. Thus, effective October 3, 1996, a regulated person's

records must only contain records of those regulated transactions that

occurred within the past two years; records of transactions that are

more than two years old are no longer required.

Temporary Exemptions From Registration Pending Promulgation, With

Notice and Comment, of Regulations

As noted earlier, combination ephedrine products became subject to

the CSA's chemical registration, recordkeeping, and reporting

provisions effective October 3, 1996. Under this new requirement, any

person who distributes, imports, or exports combination ephedrine

products must first obtain a DEA registration. Because implementation

of this provision will require amendment to DEA's regulations, DEA is

establishing temporary exemptions from the registration requirement for

persons handling combination ephedrine products, to allow for

continuation of legitimate commerce in the products. In addition, the

existing exemptions from chemical registration for persons registered

with DEA to handle controlled substances, which is contained in 21 CFR

1309.25 and for distributors of prescription drug products, which is

contained in 21 CFR 1309.28, are continued for combination ephedrine

products.

The first new exemption applies to retail distributors of

combination ephedrine products. A single transaction limit of 24 grams

has been established by the MCA for combination ephedrine products in

retail distributions. Consistent with previous proposals regarding the

regulation of retail distributions of drug products that contain List I

chemicals, DEA is temporarily exempting retail distributors from the

registration requirement. This interim rule is subject to public

comment. Under this exemption, retail distributors will not be required

to obtain a registration if they engage exclusively in distributions of

combination ephedrine products below the 24 gram limit in a single

transaction for legitimate medical use either directly to walk-in

customers or in face-to-face transactions by direct sales. This

exemption is set out in the new section 21 CFR 1309.29. Retail

distributors that operate under this exemption are reminded that they

will be subject to civil penalties for violations of the 24 gram single

transaction limit, as set out in Section 401(f)(2) of the MCA.

The second exemption applies to those persons (other than retail

distributors, as described above, or persons subject to the existing

exemptions regarding CSA registrants and prescription drug products)

who are required to obtain a registration. Any such person who submits

an application for registration for activities involving combination

ephedrine products on or before May 12, 1997 will be exempt from the

registration requirement for their lawful activities with combination

ephedrine products until the Administration has taken final action with

respect to that application. This exemption is set out in 21 CFR

1310.09.

DEA recognizes that, unlike the second exemption, which provides a

general benefit to all affected persons, the first exemption is limited

in its benefit. Therefore, while the regulatory changes in this interim

rule take effect upon publication, the notice is open for public

comment or objection until May 12, 1997. Further, the exemptions are

temporary and may be subject to change, based on the comments or

objections received.

The Deputy Assistant Administrator for the Office of Diversion

Control hereby certifies that this interim rulemaking will not have a

significant economic impact upon a substantial number of entities whose

interests must be considered under the Regulatory Flexibility Act, 5

U.S.C. 601 et seq. This interim rulemaking is an administrative action

to make the regulations consistent with the law and to avoid

interruption of legitimate commerce by granting temporary exemptions

from registration pending promulgation, through notice and comment, of

the regulations necessary to implement the provisions of the MCA

pertaining to combination ephedrine products. Further, since this is a

temporary action which provides affected persons with a means to comply

with the law pending promulgation of regulations implementing the MCA,

this action is

[[Page 5916]]

not a significant regulatory action and therefore has not been reviewed

by the Office of Management and Budget pursuant to Executive Order

12866. Consideration of the significance and impact of the new

requirements of the MCA will be addressed as part of a future proposed

rulemaking by DEA proposing regulations to implement the MCA.

This action has been analyzed in accordance with the principles and

criteria in Executive Order 12612, and it has been determined that this

interim rule does not have sufficient federalism implications to

warrant the preparation of a Federalism Assessment.

List of Subjects

21 CFR Part 1309

Administrative practice and procedure, Drug traffic control, List I

and List II chemicals, Security measures.

21 CFR 1310

Drug traffic control, List I and List II chemicals, Reporting and

recordkeeping requirements.

21 CFR Part 1313

Drug traffic control, Exports, Imports, list I and List II

chemicals, Transshipment and in-transit shipments.

For the reasons set out above, 21 CFR Parts 1309, 1310, and 1313

are to be amended as follows:

PART 1309--REGISTRATION OF MANUFACTURERS, DISTRIBUTORS, IMPORTERS

AND EXPORTERS OF LIST I CHEMICALS

1. The authority citation for part 1309 continues to read as

follows:

Authority: 21 U.S.C. 821, 822, 823, 824, 830, 871(b), 875, 877,

958.

2. Section 1309.29 is added to read as follows:

Sec. 1309.29 Exemption of retail distributors of combination ephedrine

drug products.

The requirement of registration is waived for any retail

distributor whose activities with respect to List I chemicals are

restricted to the distribution of below-threshold quantities of a

combination ephedrine drug product in a single transaction to an

individual for legitimate medical use. The threshold for a distribution

of a combination ephedrine drug product in a single transaction to an

individual for legitimate medical use is 24 grams of ephedrine base.

2. Section 1309.43 is amended by revising paragraph (d) and adding

a new paragraph (e) to read as follows:

Sec. 1309.43 Suspension or revocation of registration.

* * * * *

(d) Upon service of the order of the Administrator suspending or

revoking registration, the registrant shall immediately deliver his or

her Certificate of Registration to the nearest office of the

Administration. Also, upon service of the order of the Administrator

revoking or suspending registration, the registrant shall, as

instructed by the Administrator:

(1) Deliver all List I chemicals in his or her possession that were

obtained under the authority of a registration or an exemption from

registration granted by the Administrator by regulation, to the nearest

office of the Administration or to authorized agents of the

Administration; or

(2) Place all such List I chemicals in his or her possession under

seal as described in section 304(f) of the Act (21 U.S.C. 824(f)).

(e) In the event that revocation or suspension is limited to a

particular chemical or chemicals, the registrant shall be given a new

Certificate of Registration for all substances not affected by such

revocation or suspension; no fee shall be required for the new

Certificate of Registration. The registrant shall deliver the old

Certificate of Registration to the nearest office of the

Administration. Also, upon service of the order of the Administrator

revoking or suspending registration with respect to a particular

chemical or chemicals, the registrant shall, as instructed by the

Administrator:

(1) Deliver to the nearest office of the Administration or to

authorized agents of the Administration all of the particular chemical

or chemicals in his or her possession that were obtained under the

authority of a registration or an exemption from registration granted

by the Administrator by regulation, which are affected by the

revocation or suspension; or

(2) Place all of such chemicals under seal as described in section

304(f) of the Act (21 U.S.C. 824(f)).

3. Section 1309.44 is amended by revising paragraph (b) to read as

follows:

Sec. 1309.44 Suspension of registration pending final order.

* * * * *

(b) Upon service of the order of immediate suspension, the

registrant shall promptly return his Certificate of Registration to the

nearest office of the Administration. Also, upon service of the order

of immediate suspension, the registrant shall, as instructed by the

Administrator:

(1) Deliver to the nearest office of the Administration or to

authorized agents of the Administration all of the particular chemical

or chemicals in his or her possession that were obtained under the

authority of a registration or an exemption from registration granted

by the Administrator by regulation, which are affected by the

revocation or suspension; or

(2) Place all of such chemicals under seal as described in section

304(f) of the Act (21 U.S.C. 824(f)).

* * * * *

4. Section 1309.62 is to be amended by revising the existing text

and redesignating it as paragraph (a) and adding a new paragraph (b) to

read as follows:

Sec. 1309.62 Termination of registration.

(a) The registration of any person shall terminate if and when such

person dies, ceases legal existence, or discontinues business or

professional practice. Any registrant who cases legal existence or

discontinues business or professional practice shall promptly notify

the Special Agent in Charge of the Administration in the area in which

the person is located of such fact and seek authority and instructions

to dispose of any List I chemicals obtained under the authority of that

registration.

(b) The Special Agent in Charge shall authorize and instruct the

person to dispose of the List I chemical in one of the following

manners:

(1) By transfer to person registered under the Act and authorized

to possess the substances;

(2) By delivery to an agent of the Administration or to the nearest

office of the Administration;

(3) By such other means as the Special Agent in Charge may

determine to assure that the substance does not become available to

unauthorized persons.

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

MACHINES

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

follows:

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

2. Section 1310.01 is amended by revising paragraphs (f)(1)(iv)(A)

and (B) redesignating paragraphs (g) through (l) as paragraphs (h)

through (m), redesignating paragraph (m) as paragraph (o), and adding

new paragraphs (g) and (n) to read as follows:

Sec. 1310.01 Definitions.

* * * * *

(f) * * *

(1) * * *

[[Page 5917]]

(iv) * * *

(A) (1) the drug contains ephedrine or its salts, optical isomers,

or salts of optical isomers; or

(2) The Administrator has determined pursuant to the criteria in

1310.10 that the drug or group of drugs is being diverted to obtain the

listed chemical for use in the illicit production of a controlled

substance; and

(B) The quantity of ephedrine or other listed chemical contained in

the drug included in the transaction or multiple transactions equals or

exceeds the threshold established for that chemical.

* * * * *

(g) The term combination ephedrine product means a drug product

containing ephedrine or its salts, optical isomers, or salts of optical

isomers and therapeutically significant quantities of another active

medicinal ingredient. The term ``therapeutically significant

quantities'' shall apply if the product formulation (i.e., the

qualitative and quantitative composition of active ingredients within

the product) is listed in American Pharmaceutical Association (APHA)

Handbook of NonPrescription Drugs; Drug Facts and Comparisons

(published by Wolters Kluwer Company); or USP DI (published by

authority of the United States Pharmacopeial Convention, Inc.); or the

product is listed in Sec. 1310.15 as an exempt drug product. For drug

products having formulations not found in the above compendiums, the

Administrator shall determine, pursuant to a written request as

specified in Sec. 1310.14 whether the active medicinal ingredients are

present in quantities considered therapeutically significant for

purposes of this paragraph.

* * * * *

(n) The term retail distributor means a grocery store, general

merchandise store, drug store, or other entity or person whose

activities as a distributor relating to drug products containing

pseudeophedrine, phenylpropanolamine, or ephedrine are limited almost

exclusively to sales for personal use, both in number of sales and

volume of sales, either directly to walk-in customers or in face-to-

face transactions by direct sales. For the purposes of this paragraph,

sale for personal use means the distribution of below-threshold

quantities in a single transaction to an individual for legitimate

medical use. Also for the purposes of this paragraph, a grocery store

is an entity within Standard Industrial Classification (SIC) code 5411,

a general merchandise store is an entity within SIC codes 5300 through

5399 and 5499, and a drug store is an entity within SIC code 5912.

* * * * *

3. Section 1310.02 is amended by revising paragraphs (a)(16) and

(a)(21) to read as follows:

Sec. 1310.02 Substances covered.

* * * * *

(a) * * *

(16) Isosafrole.................................................. 8704

* * * * *

(21) Hydriodic Acid.............................................. 6695

* * * * *

4. Section 1310.04 is amended by revising paragraph (a) to read as

follows:

Sec. 1310.04 Maintenance of records.

(a) Every record required to be kept subject to Sec. 1310.03 for a

List I chemical, a tableting machine, or an encapsulating machine shall

be kept by the regulated person for two years after the date of the

transaction.

* * * * *

5. Section 1310.09 is revised to read as follows:

Sec. 1310.09 Temporary exemption from registration.

Each person required by section 302 of the Act (21 U.S.C. 822) to

obtain a registration to distribute, import, or export an combination

ephedrine product is temporarily exempted from the registration

requirement, provided that the person submits a proper application for

registration on or before May 12, 1997. 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.

PART 1313--IMPORTATION AND EXPORTATION OF PRECURSORS AND ESSENTIAL

CHEMICALS

1. The authority citation for part 1313 continues to read as

follows:

Authority: 21 U.S.C. 802, 830, 871(b), 971.

2. Section 1313.02 is amended by revising paragraphs (d)(1)(iv)(A)

and (B), to read as follows:

Sec. 1313.02 Definitions.

* * * * *

(d) * * *

(1) * * *

(iv) * * *

(A)(1) the drug contains ephedrine or its salts, optical isomers,

or salts of optical isomers; or

(2) The Administrator has determined pursuant to the criteria in

1310.10 that the drug or group of drugs is being diverted to obtain the

listed chemical for use in the illicit production of a controlled

substance; and

(B) The quantity of ephedrine or other listed chemical contained in

the drug included in the transaction or multiple transactions equals or

exceeds the threshold established for that chemical.

* * * * *

Dated: January 28, 1997.

Gene R. Haislip,

Deputy Assistant Administrator, Office of Diversion Control.

[FR Doc. 97-3086 Filed 2-7-97; 8:45 am]

BILLING CODE 4410-09-M