Reexportation of Controlled Substances, 61436-61441 [E6-17275]
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61436
Federal Register / Vol. 71, No. 201 / Wednesday, October 18, 2006 / Proposed Rules
FOR FURTHER INFORMATION CONTACT:
William Arvin, Office of Exporter
Services, at warvin@bis.doc.gov, fax
202–482–3355 or telephone 202–482–
2440.
SUPPLEMENTARY INFORMATION:
rmajette on PROD1PC67 with PROPOSALS
Background
On October 13, 2004, BIS published a
proposed rule to amend the EAR by
revising the definition of ‘‘knowledge’’
that applies throughout most of the
regulations, to revise its ‘‘red flag’’
guidance and to create a safe harbor
with respect to certain violations that
have ‘‘knowledge’’ as one of the
elements of the offense (69 FR 60829,
October 13, 2004; Comment period
reopened 69 FR 65555, November 15,
2004).
The proposed rule would have
revised the definition of knowledge in
§ 772.1 of the EAR in four ways. It
would have incorporated a ‘‘reasonable
person’’ standard, replaced the phrase
‘‘high probability’’ with the phrase
‘‘more likely than not,’’ added the
phrase ‘‘inter alia’’ to the description of
the facts and circumstances that could
make a person aware of the existence or
future occurrence of a fact, and
eliminated the phrase ‘‘known to a
person’’ from the sentence in the
knowledge definition that states that
knowledge may be inferred from
‘‘conscious disregard of facts known to
a person.’’ The proposed rule also
would have limited the applicability of
the definition to certain actors in
transactions subject to the Export
Administration Regulations (EAR) and
excluded certain usages from the
definition.
The proposed rule would have
increased from 12 to 23 the number of
circumstances explicitly set forth as
‘‘red flags’’ in Supplement No. 3 to part
732 of the EAR.
The proposed rule would have
created a ‘‘safe harbor’’ from knowledge
based violations. To take advantage of
the safe harbor, a party would have to
commit no violations of the EAR, in
connection with the transaction,
identify and resolve any ‘‘red flags’’
present in the transaction and report the
red flags found and the resolution to
BIS. BIS would have been required to
acknowledge receipt of all such reports.
Thereafter, if BIS responded to the
party’s report by stating that it
concurred that the party had adequately
addressed red flags or by advising the
party that BIS would not be responding
to the report, the party would have been
able to take advantage of the safe harbor,
assuming the party had accurately
disclosed all relevant information to
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BIS. The proposed rule stated BIS’s
intention to respond to most reports
within 45 days. However, the response
might consist of a notice that BIS
needed more time to evaluate the party’s
report. If BIS did not respond to the
party’s report by the date stated in the
acknowledgment provided to the party,
the party could have contacted BIS to
inquire about the status of the report.
BIS received 18 comments on this
proposed rule. Nine of these comments
were filed by associations that have
multiple members.
With regard to revising the definition
of knowledge, the most frequently
expressed opinion was that the
revisions were, in fact, substantive
changes to the definition rather than
mere clarifications. Commenters also
stated that BIS had not offered any
reason as to why any change in the
knowledge definition was necessary.
Although the revisions to the ‘‘red
flags’’ were criticized less than other
proposed changes, commenters made
suggestions for revisions or elimination
of 12 specific ‘‘red flags.’’ In addition,
some commenters asserted that the
proposal increased the number of
circumstances that could be red flags
without providing adequate guidance as
to the circumstances when any
particular ‘‘red flag’’ would be
applicable. The notice did state (as does
current Supplement No. 3 to part 732 of
the EAR) that not all red flags are
applicable in all circumstances.
A number of commenters criticized
the safe harbor proposal, stating that it
was too complex and lengthy. Several
predicted that few, if any, firms would
be inclined to use it. Some suggested
that submitting a license application for
the transaction would be simpler and
probably faster than waiting to see if BIS
approved of the manner in which the
party resolved the ‘‘red flags.’’
Withdrawal of Proposal
BIS has considered the comments on
the proposed rule. BIS has also
reviewed the proposed rule as compared
to the corresponding existing provisions
of the EAR and has considered several
possible modifications of the proposed
rule. As a result of this consideration,
BIS has concluded that utilizing this
proposed rule as a basis for amending
the EAR would neither clarify the
public’s responsibilities under the EAR
nor make the regulations more effective.
Accordingly, BIS is withdrawing this
proposal.
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Dated: October 11, 2006.
Christopher A. Padilla,
Assistant Secretary for Export
Administration.
[FR Doc. E6–17265 Filed 10–17–06; 8:45 am]
BILLING CODE 3510–33–P
DEPARTMENT OF JUSTICE
Drug Enforcement Administration
21 CFR Part 1312
[Docket No. DEA–276P]
RIN 1117–AB00
Reexportation of Controlled
Substances
Drug Enforcement
Administration (DEA), Department of
Justice.
ACTION: Notice of proposed rulemaking.
AGENCY:
SUMMARY: The Controlled Substances
Export Reform Act of 2005 amended the
Controlled Substances Import and
Export Act to provide authority for the
Drug Enforcement Administration
(DEA) to authorize the export of
controlled substances from the United
States to another country for subsequent
export from that country to a second
country, if certain conditions and
safeguards are satisfied. DEA is hereby
proposing to amend its regulations to
implement the new legislation.
DATES: Written comments must be
postmarked, and electronic comments
must be sent, on or before December 18,
2006.
ADDRESSES: Please submit comments,
identified by ‘‘Docket No. DEA–276,’’ by
one of the following methods:
1. Regular mail: Deputy Assistant
Administrator, Office of Diversion
Control, Drug Enforcement
Administration, Washington, DC 20537,
Attention: DEA Federal Register
Representative/ODL.
2. Express mail: DEA Headquarters,
Attention: DEA Federal Register
Representative/ODL, 2401 JeffersonDavis Highway, Alexandria, VA 22301.
3. E-mail comments directly to
agency: dea.diversion.policy@usdoj.gov.
4. Federal eRulemaking portal: https://
www.regulations.gov. Follow the online
instructions for submitting comments.
Anyone planning to comment should
be aware that all comments received
before the close of the comment period
will be made available in their entirety
for public inspection, including any
personal information submitted. For
those submitting comments
electronically, DEA will accept
attachments only in the following
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formats: Microsoft Word, WordPerfect,
Adobe PDF, or Excel.
FOR FURTHER INFORMATION CONTACT:
Mark W. Caverly, Chief, Liaison and
Policy Section, Office of Diversion
Control, Drug Enforcement
Administration, Washington, DC 20537,
Telephone (202) 307–7297.
SUPPLEMENTARY INFORMATION:
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Background
The Controlled Substances Export
Reform Act of 2005 (Pub. L. 109–57)
was enacted on August 2, 2005. The Act
amended the Controlled Substances
Import and Export Act to provide
authority for the Attorney General (and
DEA, by delegation) 1 to authorize the
export of controlled substances from the
United States to another country for
subsequent export from that country to
a second country, if certain conditions
and safeguards are satisfied.
Previously under the Controlled
Substances Import and Export Act (prior
to the 2005 legislation), there were no
circumstances in which it was
permissible to export a controlled
substance in Schedules I and II, or a
narcotic controlled substance in
Schedules III and IV, for the purpose of
reexport to another country. Such
controlled substances could lawfully be
exported only to the immediate country
where they would be consumed.
With the passage of the Controlled
Substances Export Reform Act of 2005,
Congress added a new provision,
designated Section 1003(f) of the
Controlled Substances Import and
Export Act (21 U.S.C. 953(f)), which
states:
Notwithstanding [21 U.S.C. 953]
subsections (a)(4) and (c)(3), the Attorney
General may authorize any controlled
substance that is in schedule I or II, or is a
narcotic drug in schedule III or IV, to be
exported from the United States to a country
for subsequent export from that country to
another country, if each of the following
conditions is met:
(1) Both the country to which the
controlled substance is exported from the
United States (referred to in this subsection
as the ’first country’) and the country to
which the controlled substance is exported
from the first country (referred to in this
subsection as the ’second country’) are
parties to the Single Convention on Narcotic
Drugs, 1961, and the Convention on
Psychotropic Substances, 1971.
(2) The first country and the second
country have each instituted and maintain, in
conformity with such Conventions, a system
of controls of imports of controlled
substances which the Attorney General
deems adequate.
(3) With respect to the first country, the
controlled substance is consigned to a holder
1 28
CFR 0.100(b).
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of such permits or licenses as may be
required under the laws of such country, and
a permit or license to import the controlled
substance has been issued by the country.
(4) With respect to the second country,
substantial evidence is furnished to the
Attorney General by the person who will
export the controlled substance from the
United States that—
(A) The controlled substance is to be
consigned to a holder of such permits or
licenses as may be required under the laws
of such country, and a permit or license to
import the controlled substance is to be
issued by the country; and
(B) The controlled substance is to be
applied exclusively to medical, scientific, or
other legitimate uses within the country.
(5) The controlled substance will not be
exported from the second country.
(6) Within 30 days after the controlled
substance is exported from the first country
to the second country, the person who
exported the controlled substance from the
United States delivers to the Attorney
General documentation certifying that such
export from the first country has occurred.
(7) A permit to export the controlled
substance from the United States has been
issued by the Attorney General.
Note: The above text of the Act is
published for the convenience of the reader,
given that the Act sets forth what are
essentially regulatory requirements that must
be directly incorporated into this proposed
rule. The official text is published at 21
U.S.C. 953(f).
DEA Proposed Implementation of the
Controlled Substances Export Reform
Act of 2005
The rule being proposed here would
amend DEA regulations to implement
this new legislation. Most of the
amendments to the regulations being
proposed here either reiterate the new
statutory provisions added by the 2005
Act or specify the procedural details for
complying with the new statutory
provisions. In three respects, however,
the proposed rule contains substantive
requirements not contained in the
statute. The first additional proposed
requirement is that the reexporter notify
DEA when the shipment leaves the
United States. The second additional
proposed requirement is that the
reexport from the first country to the
second country take place within 90
days after the shipment leaves the
United States. The third additional
proposed requirement is that bulk
materials undergo further
manufacturing in the first country prior
to being shipped to the second country.
This is the same requirement contained
in existing DEA regulations for
reexports of nonnarcotic controlled
substances in Schedules III and IV and
Schedule V controlled substances (21
CFR 1312.27(b)(5)).
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It is proposed that these three
additional requirements would entail
minimal regulatory burden yet allow the
agency to carry out the 2005 Act more
effectively. Under the 2005 Act
(subsection (6)), Congress mandated that
the reexporter notify DEA within 30
days after the controlled substance is
shipped from the first country to the
second country. It can be inferred that
one purpose of this provision is to
provide a means for DEA to maintain an
awareness of the status of shipments
leaving the United States for reexport
and thereby enhance the agency’s ability
to monitor and prevent diversion of
such shipments. The three additional
proposed requirements listed above
further this same goal by eliminating the
possibility that DEA would be unable to
ascertain the status of an approved
reexport for an indefinite period of time.
Without the requirements being
proposed here, a scenario could arise in
which DEA has issued a permit
authorizing a reexport, yet be without
sufficient documentation to determine
whether the shipment (i) has remained
for many months in the first country
without being reexported, (ii) has been
improperly reexported to a different
second country than that indicated on
the reexport application, or (iii) was
properly reexported to the second
country but the reexporter failed to
notify DEA within 30 days as required
by the statute. The proposed additional
notification requirement and the 90-day
time limit for reexports is intended to
minimize the likelihood of such
uncertainties regarding the status of
reexport shipments and thereby
minimize the likelihood of diversion.
Requiring that reexports be completed
within a finite time frame is also
consistent with the historical approach
in the DEA regulations that export
permits be of a finite duration. See 21
CFR 1312.25 (setting forth expiration
dates for export permits and providing
maximum duration of six months).
Finally, it is anticipated that it will
not be unduly burdensome for
reexporters to notify DEA within 30
days after the shipment has left the
United States or to complete the
reexport within 90 days thereafter. DEA
notes that the statute requires the
reexporter (as a condition of obtaining
an export permit from DEA) to specify
both the first and the second countries,
and to provide substantial evidence
that, with respect to the second country,
the controlled substance is to be
consigned to a holder of such permits or
licenses as may be required under the
laws of such country, and a permit or
license to import the controlled
substance is to be issued by the country.
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Further, the statute requires the exporter
to provide substantial evidence that the
controlled substance is to be applied
exclusively to medical, scientific, or
other legitimate uses within the second
country. Therefore, DEA anticipates that
reexporters will, themselves, seek to
complete the reexport well within 90
days of arriving within the first country.
DEA welcomes comments on these and
any other relevant considerations.
Treaty Considerations
The first two subsections of the 2005
Act pertain to the Single Convention on
Narcotic Drugs, 1961 (Single
Convention), and the Convention on
Psychotropic Substances, 1971
(Psychotropic Convention). Under these
provisions, a reexport may take place
only if both the first and second country
are parties to both treaties and only if
the Attorney General (DEA) determines
that both the first country and the
second country maintain an adequate
system of controls in conformity with
the treaties.
Thus, Congress expressly intended
that reexports take place in accordance
with the treaties. The control measures
imposed under the 2005 Act, along with
the regulations being proposed here, are
intended to work in tandem with the
international control regimes under the
treaties. The ultimate goal of the 2005
Act and this proposed rule is to permit
exportation of controlled substances in
Schedules I and II and narcotic
controlled substances in Schedules III
and IV from the United States to a first
country for subsequent exportation to
one or more second countries while
preventing international diversion
resulting from reexports. Whenever
considering safeguards against diversion
of international shipments, one must
bear in mind the backdrop of the
treaties. Toward this end, the following
treaty principles are noted.
Under the Single Convention, each
country that is a party to the treaty is
required to furnish the International
Narcotics Control Board (INCB) with
annual estimates of, among other things,
the quantities of narcotic drugs on hand,
the anticipated amounts that will be
consumed by the party for legitimate
purposes, and the anticipated
production quantities. The Single
Convention also requires parties to
furnish the INCB with statistical returns
for the prior year, indicating the
amounts of drugs produced, utilized,
consumed, imported, exported, seized,
disposed of, and in stock. The
Psychotropic Convention requires the
parties to provide the INCB with
statistical reports and assessments
containing similar information with
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respect to psychotropic substances.
Through the collection of this
information, the INCB provides
exporting countries with information on
the legitimate requirements of the
importing countries and can take steps
to reduce the likelihood of international
diversion. For example, the INCB may
notify parties if the quantity of drugs
exported to a particular country
exceeded the estimates for that country.
Parties that receive such notification
from the INCB are prohibited from
authorizing further exports of the drug
concerned to that country.
The United States has always viewed
as critical its obligation to work with the
INCB closely to monitor imports and
exports, and to take additional
appropriate measures to safeguard
against diversion. Therefore, based on
the principles of the Single Convention
and Psychotropic Convention pertaining
to international drug control, and based
on the requirements of the Controlled
Substances Export Reform Act regarding
the reporting of reexportations, DEA is
proposing the additional requirements
discussed above to ensure that DEA has
the information necessary to determine
whether controlled substances
shipments intended for reexportation
are occurring as initially reported to
DEA or being diverted to illicit
purposes.
Issuance of Permits
Under the 2005 Act, before a
controlled substance can be exported for
subsequent reexport, the exporter must
obtain from DEA a permit that
authorizes the export for this purpose.
Consistent with the 2005 Act, DEA may
only issue such permit if each of the
conditions specified in the Act is met.
Each of these conditions is restated in
the proposed rule. Although most of
these conditions are self-explanatory,
some additional explanation is
warranted.
First, as the proposed rule indicates,
DEA will be issuing a new application
form, DEA Form 161–r, for a permit to
export controlled substances for
subsequent reexport in accordance with
the 2005 Act. The proposed rule also
indicates what will constitute
‘‘substantial evidence’’ for purposes of
subsection (4) of the 2005 Act.
Specifically, if on the completed DEA
161–r, the applicant has identified an
appropriately licensed or permitted
consignee in the second country and
certified that the second country is a
party to the Conventions and maintains
a system of controls of imports
consistent with the requirements of the
treaties, and so affirmed in the affidavit
section of the application, DEA will
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consider this substantial evidence that a
permit or license to import the
controlled substance will be issued by
the second country.
Reexportation to More Than One
Second Country
DEA believes it is consistent with the
text, structure, and purpose of the 2005
Act to allow a shipment of controlled
substances to be exported from the
United States to a ‘‘first country’’ for
reexport to more than one ‘‘second
country,’’ (but not further export from
any second country to a third country)
provided the exporter notifies DEA of
such intent in the application for export
permit, and provided further that the
statute is fully complied with in all
other respects. The proposed rule
expressly provides for reexport to more
than one second country, and the new
Form 161–r will be structured
accordingly. For example, DEA must be
able to determine, based on information
contained in the permit application
(DEA Form 161–r), that each named
second country is a party to the Single
Convention and Psychotropic
Convention and that each such country
has instituted and maintains, in
conformity with such treaties, a system
of controls that DEA deems adequate.
Refused Shipments
Under current DEA regulations, 21
CFR 1312.27(b)(5), it is permissible
under the conditions specified therein
to reexport non-narcotic controlled
substances in Schedules III and IV, and
controlled substances in Schedule V.
Subsection 1312.27(b)(5)(iv) of this
existing regulation addresses the
situation where a shipment has been
exported from the United States but is
refused by the consignee in the country
of destination (the second country), or is
otherwise unacceptable or
undeliverable. The rule being proposed
here would apply the same type of
procedures set forth in subsection
1312.27(b)(5)(iv) to reexports under the
2005 Act, whereby the exporter may
seek permission from DEA, in
appropriate circumstances, to return the
shipment to the registered exporter in
the United States.
Regulatory Certifications
Regulatory Flexibility Act
The Deputy Assistant Administrator
hereby certifies that this rulemaking has
been drafted in accordance with the
Regulatory Flexibility Act (5 U.S.C.
605(b)), has reviewed this regulation,
and by approving it certifies that this
regulation will not have a significant
economic impact on a substantial
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number of small entities. This
rulemaking permits Schedule I and II
controlled substances, and narcotic
controlled substances in Schedules III
and IV, to be exported from the United
States to the first country for subsequent
reexport to second countries for
consumption. Previously such
reexportation was not permitted within
DEA law and regulations.
Executive Order 12866
The Deputy Assistant Administrator
further certifies that this rulemaking has
been drafted in accordance with the
principles in Executive Order 12866
§ 1(b). DEA has determined that this is
a significant regulatory action.
Therefore, this action has been reviewed
by the Office of Management and
Budget.
Executive Order 12988
This regulation meets the applicable
standards set forth in §§ 3(a) and 3(b)(2)
of Executive Order 12988 Civil Justice
Reform.
Executive Order 13132
This rulemaking does not preempt or
modify any provision of state law; nor
does it impose enforcement
responsibilities on any state; nor does it
diminish the power of any state to
enforce its own laws. Accordingly, this
rulemaking does not have federalism
implications warranting the application
of Executive Order 13132.
Unfunded Mandates Reform Act of 1995
This rule will not result in the
expenditure by State, local, and tribal
governments, in the aggregate, or by the
private sector, of $118,000,000 or more
in any one year, and will not
significantly or uniquely affect small
governments. Therefore, no actions were
deemed necessary under the provisions
of the Unfunded Mandates Reform Act
of 1995.
Paperwork Reduction Act of 1995
The Department of Justice, Drug
Enforcement Administration, is revising
the information collection entitled
‘‘Application for Permit to Export
Controlled Substances’’, by adding a
new DEA Form 161–r to be used by
persons applying for a permit to
reexport controlled substances in
Schedules I and II, and narcotic
controlled substances in Schedules III
and IV. DEA has submitted the new
DEA Form 161–r and the information
collection request to the Office of
Management and Budget for review and
clearance in accordance with review
procedures of the Paperwork Reduction
Act of 1995. The proposed information
collection is published to obtain
comments from the public and affected
agencies.
All comments and suggestions, or
questions regarding additional
information, to include obtaining a copy
of the proposed information collection
instrument with instructions, should be
directed to Mark W. Caverly, Chief,
Liaison and Policy Section, Office of
Diversion Control, Drug Enforcement
Administration, Washington, DC 20537,
Telephone: (202) 307–7297. Written
comments and suggestions from the
public and affected agencies concerning
the proposed collection of information
are encouraged. Comments should
address one or more of the following
four points:
(1) Evaluate whether the proposed
collection of information is necessary
for the proper performance of the
functions of the agency, including
whether the information will have
practical utility;
(2) Evaluate the accuracy of the
agency’s estimate of the burden of the
proposed collection of information,
including the validity of the
methodology and assumptions used;
(3) Enhance the quality, utility, and
clarity of the information to be
collected; and
(4) Minimize the burden of the
collection of information on those who
Number of
responses
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are to respond, including through the
use of appropriate automated,
electronic, mechanical, or other
technological collection techniques or
other forms of information technology,
e.g., permitting electronic submission of
responses.
Overview of this information
collection:
(1) Type of Information Collection:
Revision of an existing collection.
(2) Title of the Form/Collection:
Application for Permit to Export
Controlled Substances.
(3) Agency form number, if any, and
the applicable component of the
Department of Justice sponsoring the
collection:
Form Number: DEA Form 161,
Application for Permit to Export
Controlled Substances; DEA Form 161–
r, Application for Permit to Export
Controlled Substances for Subsequent
Reexport.
Office of Diversion Control, Drug
Enforcement Administration, U.S.
Department of Justice.
(4) Affected public who will be asked
or required to respond, as well as a brief
abstract:
Primary: Business or other for-profit.
Other: None.
Abstract: Title 21 CFR 1312.21 and
1312.22 require persons who export
controlled substances in Schedules I
and II and who reexport controlled
substances in Schedules I and II and
narcotic controlled substances in
Schedules III and IV to obtain a permit
from DEA. Information is used to issue
export permits, exercise control over
exportation of controlled substances,
and compile data for submission to the
United Nations to comply with treaty
requirements.
(5) An estimate of the total number of
respondents and the amount of time
estimated for an average respondent to
respond: It is estimated that 90
respondents will respond, with
submissions as follows:
Average time per response
DEA Form 161 (exportation only) ..............................................................
DEA Form 161–r (reexportation) ...............................................................
Certification of exportation from United States to first country .................
Certification of reexportation from first country to second country* ..........
2,200
400
400
1,200
30
45
15
15
(0.5 hours) ....................
(0.75 hours) ..................
(0.25 hours) ..................
(0.25 hours) ..................
1,100
300
100
300
Total ....................................................................................................
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minutes
minutes
minutes
minutes
Total
(hours)
4,200
..........................................................
1,800
*Assumes three separate reexports to second countries.
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(6) An estimate of the total public
burden (in hours) associated with the
collection: The total public burden (in
hours) for this collection is estimated to
be 1,800 hours.
Small Business Regulatory Enforcement
Fairness Act of 1996
This rule is not a major rule as
defined by Section 804 of the Small
Business Regulatory Enforcement
Fairness Act of 1996. This rule will not
result in an annual effect on the
economy of $100,000,000 or more; a
major increase in costs or prices; or
significant adverse effects on
competition, employment, investment,
productivity, innovation, or on the
ability of United States-based
companies to compete with foreignbased companies in domestic and
export markets.
List of Subjects in 21 CFR Part 1312
Administrative practice and
procedure, Drug traffic control, Exports,
Imports, Reporting and recordkeeping
requirements.
For the reasons set out above, 21 CFR
part 1312 is proposed to be amended as
follows:
PART 1312—IMPORTATION AND
EXPORTATION OF CONTROLLED
SUBSTANCES [AMENDED]
1. The authority citation for part 1312
continues to read as follows:
Authority: 21 U.S.C. 952, 953, 954, 957,
958.
2. § 1312.22 is proposed to be
amended by revising paragraph (a) and
adding paragraphs (c) through (e) to
read as follows:
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§ 1312.22
Application for export permit.
(a) An application for a permit to
export controlled substances shall be
made on DEA Form 161, and an
application for a permit to reexport
controlled substances shall be made on
DEA Form 161–r. Forms may be
obtained from, and shall be filed with,
the Drug Enforcement Administration,
Import/Export Unit, Washington, DC
20537. Each application shall show the
exporter’s name, address, and
registration number; a detailed
description of each controlled substance
desired to be exported including the
drug name, dosage form, National Drug
Code (NDC) number, the Administration
Controlled Substance Code Number as
set forth in Part 1308 of this chapter, the
number and size of packages or
containers, the name and quantity of the
controlled substance contained in any
finished dosage units, and the quantity
of any controlled substance (expressed
VerDate Aug<31>2005
17:02 Oct 17, 2006
Jkt 211001
in anhydrous acid, base, or alkaloid)
given in kilograms or parts thereof. The
application shall include the name,
address, and business of the consignee,
foreign port of entry, the port of
exportation, the approximate date of
exportation, the name of the exporting
carrier or vessel (if known, or if
unknown it should be stated whether
shipment will be made by express,
freight, or otherwise, exports of
controlled substances by mail being
prohibited), the date and number, if any,
of the supporting foreign import license
or permit accompanying the
application, and the authority by whom
such foreign license or permit was
issued. The application shall also
contain an affidavit that the packages
are labeled in conformance with
obligations of the United States under
international treaties, conventions, or
protocols in effect on May 1, 1971. The
affidavit shall further state that to the
best of affiant’s knowledge and belief,
the controlled substances therein are to
be applied exclusively to medical or
scientific uses within the country to
which exported, will not be reexported
therefrom and that there is an actual
need for the controlled substance for
medical or scientific uses within such
country, unless the application is
submitted for reexport in accordance
with paragraphs (c) and (d) of this
section. In the case of exportation of
crude cocaine, the affidavit may state
that to the best of affiant’s knowledge
and belief, the controlled substances
will be processed within the country to
which exported, either for medical or
scientific use within that country or for
reexportation in accordance with the
laws of that country to another for
medical or scientific use within that
country. The application shall be signed
and dated by the exporter and shall
contain the address from which the
substances will be shipped for
exportation.
*
*
*
*
*
(c) Notwithstanding paragraphs (a)
and (b) of this section, the
Administration may authorize any
controlled substance listed in Schedule
I or II, or any narcotic drug listed in
Schedule III or IV, to be exported from
the United States to a country for
subsequent export from that country to
another country, if each of the following
conditions is met, in accordance with
§ 1003(f) of the Controlled Substances
Import and Export Act (21 U.S.C.
953(f)):
(1) Both the country to which the
controlled substance is exported from
the United States (referred to in this
section as the ‘‘first country’’) and the
PO 00000
Frm 00014
Fmt 4702
Sfmt 4702
country to which the controlled
substance is exported from the first
country (referred to in this section as the
‘‘second country’’) are parties to the
Single Convention on Narcotic Drugs,
1961, and the Convention on
Psychotropic Substances, 1971;
(2) The first country and the second
country have each instituted and
maintain, in conformity with such
Conventions, a system of controls of
imports of controlled substances which
the Administration deems adequate;
(3) With respect to the first country,
the controlled substance is consigned to
a holder of such permits or licenses as
may be required under the laws of such
country, and a permit or license to
import the controlled substance has
been issued by the country;
(4) With respect to the second
country, substantial evidence is
furnished to the Administration by the
applicant for the export permit that—
(i) The controlled substance is to be
consigned to a holder of such permits or
licenses as may be required under the
laws of such country, and a permit or
license to import the controlled
substance is to be issued by the country;
and
(ii) The controlled substance is to be
applied exclusively to medical,
scientific, or other legitimate uses
within the country;
(5) The controlled substance will not
be exported from the second country;
(6) The person who exported the
controlled substance from the United
States has complied with paragraph (d)
of this section and a permit to export the
controlled substance from the United
States has been issued by the
Administration; and
(7) Within 30 days after the controlled
substance is exported from the first
country to the second country, the
person who exported the controlled
substance from the United States must
deliver to the Administration
documentation certifying that such
export from the first country has
occurred. If the permit issued by the
Administration authorized the reexport
of a controlled substance from the first
country to more than one second
country, notification of each individual
reexport shall be provided. This
documentation shall be submitted on
company letterhead, signed by the
responsible company official, and shall
include the following information:
(i) Name of second country;
(ii) Actual quantity shipped;
(iii) Actual date shipped; and
(iv) DEA export permit number for the
original export.
(d) Where a person is seeking to
export a controlled substance for
E:\FR\FM\18OCP1.SGM
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rmajette on PROD1PC67 with PROPOSALS
Federal Register / Vol. 71, No. 201 / Wednesday, October 18, 2006 / Proposed Rules
reexport in accordance with paragraph
(c) of this section, the following
requirements shall apply in addition to
(and not in lieu of) the requirements of
paragraphs (a) and (b) of this section:
(1) Bulk substances will not be
reexported in the same form as exported
from the United States, i.e., the material
must undergo further manufacturing
process. This further manufactured
material may only be reexported to a
country of ultimate consumption.
(2) Finished dosage units, if
reexported, must be in a commercial
package, properly sealed and labeled for
legitimate medical use in the country of
destination (the second country);
(3) Any proposed reexportation must
be made known to the Administration at
the time the initial DEA Form 161–r is
submitted. In addition, the following
information must also be provided
where indicated on the form:
(i) Whether the drug or preparation
will be reexported in bulk or finished
dosage units;
(ii) The product name, dosage
strength, commercial package size, and
quantity;
(iii) The name of consignee, complete
address, and expected shipment date, as
well as the name and address of the
ultimate consignee in the country to
where the substances will be
reexported.
(4) The application (DEA Form 161–
r) must also contain an affidavit that the
consignee in the country of ultimate
destination (the second country) is
authorized under the laws and
regulations of the country of ultimate
destination to receive the controlled
substances. The affidavit must also
contain the following statement, in
addition to the statements required
under paragraph (a) of this section:
(i) That the packages are labeled in
conformance with the obligations of the
United States under the Single
Convention on Narcotic Drugs, 1961, the
Convention on Psychotropic
Substances, 1971, and any amendments
to such treaties;
(ii) That the controlled substances are
to be applied exclusively to medical or
scientific uses within the country to
which reexported (the second country);
(iii) That the controlled substances
will not be further reexported from the
second country, and
(iv) That there is an actual need for
the controlled substances for medical or
scientific uses within the second
country.
(5) If the applicant proposes that the
shipment of controlled substances will
be separated into parts after it arrives in
the first country and then reexported to
more than one second country, the
VerDate Aug<31>2005
15:22 Oct 17, 2006
Jkt 211001
applicant shall so indicate on the DEA
Form 161-r, providing all the
information required in this section for
each second country.
(6) Within 30 days after the controlled
substance is exported from the United
States, the person who exported the
controlled substance shall deliver to the
Administration documentation on the
DEA Form 161-r initially completed for
the transaction certifying that such
export occurred. This documentation
shall be signed by the responsible
company official and shall include the
following information:
(i) Actual quantity shipped;
(ii) Actual date shipped; and
(iii) DEA export permit number.
(7) The controlled substance will be
reexported from the first country to the
second country (or second countries) no
later than 90 days after the controlled
substance was exported from the United
States.
(8) Shipments that have been
exported from the United States and are
refused by the consignee in the country
of destination (the second country), or
are otherwise unacceptable or
undeliverable, may be returned to the
registered exporter in the United States
upon authorization of the
Administration. In these circumstances,
the exporter in the United States shall
file a written request for the return of
the controlled substances to the United
States with a brief summary of the facts
that warrant the return, along with a
completed DEA Form 357, Application
for Import Permit, with the Drug
Enforcement Administration, Import/
Export Unit, Washington, DC 20537.
The Administration will evaluate the
request after considering all the facts as
well as the exporter’s registration status
with the Administration. If the exporter
provides sufficient documentation, the
Administration will issue an import
permit for the return of these drugs, and
the exporter can then obtain an export
permit from the country of original
importation. The substance may be
returned to the United States only after
affirmative authorization is issued in
writing by the Administration.
(e) In considering whether to grant an
application for a permit under
paragraphs (c) and (d) of this section,
the Administration shall consider
whether the applicant has previously
obtained such a permit and, if so,
whether the applicant complied fully
with the requirements of this section.
3. Section 1312.23 is proposed to be
amended by revising paragraphs (a) and
(f) to read as follows:
PO 00000
Frm 00015
Fmt 4702
Sfmt 4702
§ 1312.23
61441
Issuance of export permit.
(a) The Administration may authorize
exportation of any controlled substance
listed in Schedule I or II or any narcotic
controlled substance listed in Schedule
III or IV if he finds that such exportation
is permitted by subsections 1003(a), (b),
(c), (d), or (f) of the Act (21 U.S.C.
§ 953(a), (b), (c), (d), or (f).
*
*
*
*
*
(f) No export permit shall be issued
for the exportation, or reexportation, of
any controlled substance to any country
when the Administration has
information to show that the estimates
or assessments submitted with respect
to that country for the current period,
under the Single Convention on
Narcotic Drugs, 1961, or the Convention
on Psychotropic Substances, 1971, have
been, or, considering the quantity
proposed to be imported, will be
exceeded. If it shall appear through
subsequent advice received from the
International Narcotics Control Board of
the United Nations that the estimates or
assessments of the country of
destination have been adjusted to
permit further importation of the
controlled substance, an export permit
may then be issued if otherwise
permissible.
Dated: October 10, 2006.
Joseph T. Rannazzisi,
Deputy Assistant Administrator, Office of
Diversion Control.
[FR Doc. E6–17275 Filed 10–17–06; 8:45 am]
BILLING CODE 4410–09–P
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
[REG–141901–05]
RIN 1545–BE92
Exchanges of Property for an Annuity
Internal Revenue Service (IRS),
Treasury.
ACTION: Notice of proposed rulemaking
and notice of public hearing.
AGENCY:
SUMMARY: This document contains
proposed regulations that provide
guidance on the taxation of the
exchange of property for an annuity
contract. These regulations are
necessary to outline the proper taxation
of these exchanges and will affect
participants in transactions involving
these exchanges. This document also
provides notice of public hearing.
DATES: Written or electronic comments
must be received by January 16, 2007.
E:\FR\FM\18OCP1.SGM
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]]>Agencies
[Federal Register Volume 71, Number 201 (Wednesday, October 18, 2006)]
[Proposed Rules]
[Pages 61436-61441]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-17275]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF JUSTICE
Drug Enforcement Administration
21 CFR Part 1312
[Docket No. DEA-276P]
RIN 1117-AB00
Reexportation of Controlled Substances
AGENCY: Drug Enforcement Administration (DEA), Department of Justice.
ACTION: Notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: The Controlled Substances Export Reform Act of 2005 amended
the Controlled Substances Import and Export Act to provide authority
for the Drug Enforcement Administration (DEA) to authorize the export
of controlled substances from the United States to another country for
subsequent export from that country to a second country, if certain
conditions and safeguards are satisfied. DEA is hereby proposing to
amend its regulations to implement the new legislation.
DATES: Written comments must be postmarked, and electronic comments
must be sent, on or before December 18, 2006.
ADDRESSES: Please submit comments, identified by ``Docket No. DEA-
276,'' by one of the following methods:
1. Regular mail: Deputy Assistant Administrator, Office of
Diversion Control, Drug Enforcement Administration, Washington, DC
20537, Attention: DEA Federal Register Representative/ODL.
2. Express mail: DEA Headquarters, Attention: DEA Federal Register
Representative/ODL, 2401 Jefferson-Davis Highway, Alexandria, VA 22301.
3. E-mail comments directly to agency:
dea.diversion.policy@usdoj.gov.
4. Federal eRulemaking portal: https://www.regulations.gov. Follow
the online instructions for submitting comments.
Anyone planning to comment should be aware that all comments
received before the close of the comment period will be made available
in their entirety for public inspection, including any personal
information submitted. For those submitting comments electronically,
DEA will accept attachments only in the following
[[Page 61437]]
formats: Microsoft Word, WordPerfect, Adobe PDF, or Excel.
FOR FURTHER INFORMATION CONTACT: Mark W. Caverly, Chief, Liaison and
Policy Section, Office of Diversion Control, Drug Enforcement
Administration, Washington, DC 20537, Telephone (202) 307-7297.
SUPPLEMENTARY INFORMATION:
Background
The Controlled Substances Export Reform Act of 2005 (Pub. L. 109-
57) was enacted on August 2, 2005. The Act amended the Controlled
Substances Import and Export Act to provide authority for the Attorney
General (and DEA, by delegation) \1\ to authorize the export of
controlled substances from the United States to another country for
subsequent export from that country to a second country, if certain
conditions and safeguards are satisfied.
---------------------------------------------------------------------------
\1\ 28 CFR 0.100(b).
---------------------------------------------------------------------------
Previously under the Controlled Substances Import and Export Act
(prior to the 2005 legislation), there were no circumstances in which
it was permissible to export a controlled substance in Schedules I and
II, or a narcotic controlled substance in Schedules III and IV, for the
purpose of reexport to another country. Such controlled substances
could lawfully be exported only to the immediate country where they
would be consumed.
With the passage of the Controlled Substances Export Reform Act of
2005, Congress added a new provision, designated Section 1003(f) of the
Controlled Substances Import and Export Act (21 U.S.C. 953(f)), which
states:
Notwithstanding [21 U.S.C. 953] subsections (a)(4) and (c)(3),
the Attorney General may authorize any controlled substance that is
in schedule I or II, or is a narcotic drug in schedule III or IV, to
be exported from the United States to a country for subsequent
export from that country to another country, if each of the
following conditions is met:
(1) Both the country to which the controlled substance is
exported from the United States (referred to in this subsection as
the 'first country') and the country to which the controlled
substance is exported from the first country (referred to in this
subsection as the 'second country') are parties to the Single
Convention on Narcotic Drugs, 1961, and the Convention on
Psychotropic Substances, 1971.
(2) The first country and the second country have each
instituted and maintain, in conformity with such Conventions, a
system of controls of imports of controlled substances which the
Attorney General deems adequate.
(3) With respect to the first country, the controlled substance
is consigned to a holder of such permits or licenses as may be
required under the laws of such country, and a permit or license to
import the controlled substance has been issued by the country.
(4) With respect to the second country, substantial evidence is
furnished to the Attorney General by the person who will export the
controlled substance from the United States that--
(A) The controlled substance is to be consigned to a holder of
such permits or licenses as may be required under the laws of such
country, and a permit or license to import the controlled substance
is to be issued by the country; and
(B) The controlled substance is to be applied exclusively to
medical, scientific, or other legitimate uses within the country.
(5) The controlled substance will not be exported from the
second country.
(6) Within 30 days after the controlled substance is exported
from the first country to the second country, the person who
exported the controlled substance from the United States delivers to
the Attorney General documentation certifying that such export from
the first country has occurred.
(7) A permit to export the controlled substance from the United
States has been issued by the Attorney General.
Note: The above text of the Act is published for the convenience
of the reader, given that the Act sets forth what are essentially
regulatory requirements that must be directly incorporated into this
proposed rule. The official text is published at 21 U.S.C. 953(f).
DEA Proposed Implementation of the Controlled Substances Export Reform
Act of 2005
The rule being proposed here would amend DEA regulations to
implement this new legislation. Most of the amendments to the
regulations being proposed here either reiterate the new statutory
provisions added by the 2005 Act or specify the procedural details for
complying with the new statutory provisions. In three respects,
however, the proposed rule contains substantive requirements not
contained in the statute. The first additional proposed requirement is
that the reexporter notify DEA when the shipment leaves the United
States. The second additional proposed requirement is that the reexport
from the first country to the second country take place within 90 days
after the shipment leaves the United States. The third additional
proposed requirement is that bulk materials undergo further
manufacturing in the first country prior to being shipped to the second
country. This is the same requirement contained in existing DEA
regulations for reexports of nonnarcotic controlled substances in
Schedules III and IV and Schedule V controlled substances (21 CFR
1312.27(b)(5)).
It is proposed that these three additional requirements would
entail minimal regulatory burden yet allow the agency to carry out the
2005 Act more effectively. Under the 2005 Act (subsection (6)),
Congress mandated that the reexporter notify DEA within 30 days after
the controlled substance is shipped from the first country to the
second country. It can be inferred that one purpose of this provision
is to provide a means for DEA to maintain an awareness of the status of
shipments leaving the United States for reexport and thereby enhance
the agency's ability to monitor and prevent diversion of such
shipments. The three additional proposed requirements listed above
further this same goal by eliminating the possibility that DEA would be
unable to ascertain the status of an approved reexport for an
indefinite period of time. Without the requirements being proposed
here, a scenario could arise in which DEA has issued a permit
authorizing a reexport, yet be without sufficient documentation to
determine whether the shipment (i) has remained for many months in the
first country without being reexported, (ii) has been improperly
reexported to a different second country than that indicated on the
reexport application, or (iii) was properly reexported to the second
country but the reexporter failed to notify DEA within 30 days as
required by the statute. The proposed additional notification
requirement and the 90-day time limit for reexports is intended to
minimize the likelihood of such uncertainties regarding the status of
reexport shipments and thereby minimize the likelihood of diversion.
Requiring that reexports be completed within a finite time frame is
also consistent with the historical approach in the DEA regulations
that export permits be of a finite duration. See 21 CFR 1312.25
(setting forth expiration dates for export permits and providing
maximum duration of six months).
Finally, it is anticipated that it will not be unduly burdensome
for reexporters to notify DEA within 30 days after the shipment has
left the United States or to complete the reexport within 90 days
thereafter. DEA notes that the statute requires the reexporter (as a
condition of obtaining an export permit from DEA) to specify both the
first and the second countries, and to provide substantial evidence
that, with respect to the second country, the controlled substance is
to be consigned to a holder of such permits or licenses as may be
required under the laws of such country, and a permit or license to
import the controlled substance is to be issued by the country.
[[Page 61438]]
Further, the statute requires the exporter to provide substantial
evidence that the controlled substance is to be applied exclusively to
medical, scientific, or other legitimate uses within the second
country. Therefore, DEA anticipates that reexporters will, themselves,
seek to complete the reexport well within 90 days of arriving within
the first country. DEA welcomes comments on these and any other
relevant considerations.
Treaty Considerations
The first two subsections of the 2005 Act pertain to the Single
Convention on Narcotic Drugs, 1961 (Single Convention), and the
Convention on Psychotropic Substances, 1971 (Psychotropic Convention).
Under these provisions, a reexport may take place only if both the
first and second country are parties to both treaties and only if the
Attorney General (DEA) determines that both the first country and the
second country maintain an adequate system of controls in conformity
with the treaties.
Thus, Congress expressly intended that reexports take place in
accordance with the treaties. The control measures imposed under the
2005 Act, along with the regulations being proposed here, are intended
to work in tandem with the international control regimes under the
treaties. The ultimate goal of the 2005 Act and this proposed rule is
to permit exportation of controlled substances in Schedules I and II
and narcotic controlled substances in Schedules III and IV from the
United States to a first country for subsequent exportation to one or
more second countries while preventing international diversion
resulting from reexports. Whenever considering safeguards against
diversion of international shipments, one must bear in mind the
backdrop of the treaties. Toward this end, the following treaty
principles are noted.
Under the Single Convention, each country that is a party to the
treaty is required to furnish the International Narcotics Control Board
(INCB) with annual estimates of, among other things, the quantities of
narcotic drugs on hand, the anticipated amounts that will be consumed
by the party for legitimate purposes, and the anticipated production
quantities. The Single Convention also requires parties to furnish the
INCB with statistical returns for the prior year, indicating the
amounts of drugs produced, utilized, consumed, imported, exported,
seized, disposed of, and in stock. The Psychotropic Convention requires
the parties to provide the INCB with statistical reports and
assessments containing similar information with respect to psychotropic
substances. Through the collection of this information, the INCB
provides exporting countries with information on the legitimate
requirements of the importing countries and can take steps to reduce
the likelihood of international diversion. For example, the INCB may
notify parties if the quantity of drugs exported to a particular
country exceeded the estimates for that country. Parties that receive
such notification from the INCB are prohibited from authorizing further
exports of the drug concerned to that country.
The United States has always viewed as critical its obligation to
work with the INCB closely to monitor imports and exports, and to take
additional appropriate measures to safeguard against diversion.
Therefore, based on the principles of the Single Convention and
Psychotropic Convention pertaining to international drug control, and
based on the requirements of the Controlled Substances Export Reform
Act regarding the reporting of reexportations, DEA is proposing the
additional requirements discussed above to ensure that DEA has the
information necessary to determine whether controlled substances
shipments intended for reexportation are occurring as initially
reported to DEA or being diverted to illicit purposes.
Issuance of Permits
Under the 2005 Act, before a controlled substance can be exported
for subsequent reexport, the exporter must obtain from DEA a permit
that authorizes the export for this purpose. Consistent with the 2005
Act, DEA may only issue such permit if each of the conditions specified
in the Act is met. Each of these conditions is restated in the proposed
rule. Although most of these conditions are self-explanatory, some
additional explanation is warranted.
First, as the proposed rule indicates, DEA will be issuing a new
application form, DEA Form 161-r, for a permit to export controlled
substances for subsequent reexport in accordance with the 2005 Act. The
proposed rule also indicates what will constitute ``substantial
evidence'' for purposes of subsection (4) of the 2005 Act.
Specifically, if on the completed DEA 161-r, the applicant has
identified an appropriately licensed or permitted consignee in the
second country and certified that the second country is a party to the
Conventions and maintains a system of controls of imports consistent
with the requirements of the treaties, and so affirmed in the affidavit
section of the application, DEA will consider this substantial evidence
that a permit or license to import the controlled substance will be
issued by the second country.
Reexportation to More Than One Second Country
DEA believes it is consistent with the text, structure, and purpose
of the 2005 Act to allow a shipment of controlled substances to be
exported from the United States to a ``first country'' for reexport to
more than one ``second country,'' (but not further export from any
second country to a third country) provided the exporter notifies DEA
of such intent in the application for export permit, and provided
further that the statute is fully complied with in all other respects.
The proposed rule expressly provides for reexport to more than one
second country, and the new Form 161-r will be structured accordingly.
For example, DEA must be able to determine, based on information
contained in the permit application (DEA Form 161-r), that each named
second country is a party to the Single Convention and Psychotropic
Convention and that each such country has instituted and maintains, in
conformity with such treaties, a system of controls that DEA deems
adequate.
Refused Shipments
Under current DEA regulations, 21 CFR 1312.27(b)(5), it is
permissible under the conditions specified therein to reexport non-
narcotic controlled substances in Schedules III and IV, and controlled
substances in Schedule V. Subsection 1312.27(b)(5)(iv) of this existing
regulation addresses the situation where a shipment has been exported
from the United States but is refused by the consignee in the country
of destination (the second country), or is otherwise unacceptable or
undeliverable. The rule being proposed here would apply the same type
of procedures set forth in subsection 1312.27(b)(5)(iv) to reexports
under the 2005 Act, whereby the exporter may seek permission from DEA,
in appropriate circumstances, to return the shipment to the registered
exporter in the United States.
Regulatory Certifications
Regulatory Flexibility Act
The Deputy Assistant Administrator hereby certifies that this
rulemaking has been drafted in accordance with the Regulatory
Flexibility Act (5 U.S.C. 605(b)), has reviewed this regulation, and by
approving it certifies that this regulation will not have a significant
economic impact on a substantial
[[Page 61439]]
number of small entities. This rulemaking permits Schedule I and II
controlled substances, and narcotic controlled substances in Schedules
III and IV, to be exported from the United States to the first country
for subsequent reexport to second countries for consumption. Previously
such reexportation was not permitted within DEA law and regulations.
Executive Order 12866
The Deputy Assistant Administrator further certifies that this
rulemaking has been drafted in accordance with the principles in
Executive Order 12866 Sec. 1(b). DEA has determined that this is a
significant regulatory action. Therefore, this action has been reviewed
by the Office of Management and Budget.
Executive Order 12988
This regulation meets the applicable standards set forth in
Sec. Sec. 3(a) and 3(b)(2) of Executive Order 12988 Civil Justice
Reform.
Executive Order 13132
This rulemaking does not preempt or modify any provision of state
law; nor does it impose enforcement responsibilities on any state; nor
does it diminish the power of any state to enforce its own laws.
Accordingly, this rulemaking does not have federalism implications
warranting the application of Executive Order 13132.
Unfunded Mandates Reform Act of 1995
This rule will not result in the expenditure by State, local, and
tribal governments, in the aggregate, or by the private sector, of
$118,000,000 or more in any one year, and will not significantly or
uniquely affect small governments. Therefore, no actions were deemed
necessary under the provisions of the Unfunded Mandates Reform Act of
1995.
Paperwork Reduction Act of 1995
The Department of Justice, Drug Enforcement Administration, is
revising the information collection entitled ``Application for Permit
to Export Controlled Substances'', by adding a new DEA Form 161-r to be
used by persons applying for a permit to reexport controlled substances
in Schedules I and II, and narcotic controlled substances in Schedules
III and IV. DEA has submitted the new DEA Form 161-r and the
information collection request to the Office of Management and Budget
for review and clearance in accordance with review procedures of the
Paperwork Reduction Act of 1995. The proposed information collection is
published to obtain comments from the public and affected agencies.
All comments and suggestions, or questions regarding additional
information, to include obtaining a copy of the proposed information
collection instrument with instructions, should be directed to Mark W.
Caverly, Chief, Liaison and Policy Section, Office of Diversion
Control, Drug Enforcement Administration, Washington, DC 20537,
Telephone: (202) 307-7297. Written comments and suggestions from the
public and affected agencies concerning the proposed collection of
information are encouraged. Comments should address one or more of the
following four points:
(1) Evaluate whether the proposed collection of information is
necessary for the proper performance of the functions of the agency,
including whether the information will have practical utility;
(2) Evaluate the accuracy of the agency's estimate of the burden of
the proposed collection of information, including the validity of the
methodology and assumptions used;
(3) Enhance the quality, utility, and clarity of the information to
be collected; and
(4) Minimize the burden of the collection of information on those
who are to respond, including through the use of appropriate automated,
electronic, mechanical, or other technological collection techniques or
other forms of information technology, e.g., permitting electronic
submission of responses.
Overview of this information collection:
(1) Type of Information Collection: Revision of an existing
collection.
(2) Title of the Form/Collection: Application for Permit to Export
Controlled Substances.
(3) Agency form number, if any, and the applicable component of the
Department of Justice sponsoring the collection:
Form Number: DEA Form 161, Application for Permit to Export
Controlled Substances; DEA Form 161-r, Application for Permit to Export
Controlled Substances for Subsequent Reexport.
Office of Diversion Control, Drug Enforcement Administration, U.S.
Department of Justice.
(4) Affected public who will be asked or required to respond, as
well as a brief abstract:
Primary: Business or other for-profit.
Other: None.
Abstract: Title 21 CFR 1312.21 and 1312.22 require persons who
export controlled substances in Schedules I and II and who reexport
controlled substances in Schedules I and II and narcotic controlled
substances in Schedules III and IV to obtain a permit from DEA.
Information is used to issue export permits, exercise control over
exportation of controlled substances, and compile data for submission
to the United Nations to comply with treaty requirements.
(5) An estimate of the total number of respondents and the amount
of time estimated for an average respondent to respond: It is estimated
that 90 respondents will respond, with submissions as follows:
----------------------------------------------------------------------------------------------------------------
Number of
responses Average time per response Total (hours)
----------------------------------------------------------------------------------------------------------------
DEA Form 161 (exportation only)............... 2,200 30 minutes (0.5 hours).......... 1,100
DEA Form 161-r (reexportation)................ 400 45 minutes (0.75 hours)......... 300
Certification of exportation from United 400 15 minutes (0.25 hours)........ 100
States to first country.
Certification of reexportation from first 1,200 15 minutes (0.25 hours)......... 300
country to second country*.
---------------- ---------------
Total..................................... 4,200 ................................ 1,800
----------------------------------------------------------------------------------------------------------------
*Assumes three separate reexports to second countries.
[[Page 61440]]
(6) An estimate of the total public burden (in hours) associated
with the collection: The total public burden (in hours) for this
collection is estimated to be 1,800 hours.
Small Business Regulatory Enforcement Fairness Act of 1996
This rule is not a major rule as defined by Section 804 of the
Small Business Regulatory Enforcement Fairness Act of 1996. This rule
will not result in an annual effect on the economy of $100,000,000 or
more; a major increase in costs or prices; or significant adverse
effects on competition, employment, investment, productivity,
innovation, or on the ability of United States-based companies to
compete with foreign-based companies in domestic and export markets.
List of Subjects in 21 CFR Part 1312
Administrative practice and procedure, Drug traffic control,
Exports, Imports, Reporting and recordkeeping requirements.
For the reasons set out above, 21 CFR part 1312 is proposed to be
amended as follows:
PART 1312--IMPORTATION AND EXPORTATION OF CONTROLLED SUBSTANCES
[AMENDED]
1. The authority citation for part 1312 continues to read as
follows:
Authority: 21 U.S.C. 952, 953, 954, 957, 958.
2. Sec. 1312.22 is proposed to be amended by revising paragraph
(a) and adding paragraphs (c) through (e) to read as follows:
Sec. 1312.22 Application for export permit.
(a) An application for a permit to export controlled substances
shall be made on DEA Form 161, and an application for a permit to
reexport controlled substances shall be made on DEA Form 161-r. Forms
may be obtained from, and shall be filed with, the Drug Enforcement
Administration, Import/Export Unit, Washington, DC 20537. Each
application shall show the exporter's name, address, and registration
number; a detailed description of each controlled substance desired to
be exported including the drug name, dosage form, National Drug Code
(NDC) number, the Administration Controlled Substance Code Number as
set forth in Part 1308 of this chapter, the number and size of packages
or containers, the name and quantity of the controlled substance
contained in any finished dosage units, and the quantity of any
controlled substance (expressed in anhydrous acid, base, or alkaloid)
given in kilograms or parts thereof. The application shall include the
name, address, and business of the consignee, foreign port of entry,
the port of exportation, the approximate date of exportation, the name
of the exporting carrier or vessel (if known, or if unknown it should
be stated whether shipment will be made by express, freight, or
otherwise, exports of controlled substances by mail being prohibited),
the date and number, if any, of the supporting foreign import license
or permit accompanying the application, and the authority by whom such
foreign license or permit was issued. The application shall also
contain an affidavit that the packages are labeled in conformance with
obligations of the United States under international treaties,
conventions, or protocols in effect on May 1, 1971. The affidavit shall
further state that to the best of affiant's knowledge and belief, the
controlled substances therein are to be applied exclusively to medical
or scientific uses within the country to which exported, will not be
reexported therefrom and that there is an actual need for the
controlled substance for medical or scientific uses within such
country, unless the application is submitted for reexport in accordance
with paragraphs (c) and (d) of this section. In the case of exportation
of crude cocaine, the affidavit may state that to the best of affiant's
knowledge and belief, the controlled substances will be processed
within the country to which exported, either for medical or scientific
use within that country or for reexportation in accordance with the
laws of that country to another for medical or scientific use within
that country. The application shall be signed and dated by the exporter
and shall contain the address from which the substances will be shipped
for exportation.
* * * * *
(c) Notwithstanding paragraphs (a) and (b) of this section, the
Administration may authorize any controlled substance listed in
Schedule I or II, or any narcotic drug listed in Schedule III or IV, to
be exported from the United States to a country for subsequent export
from that country to another country, if each of the following
conditions is met, in accordance with Sec. 1003(f) of the Controlled
Substances Import and Export Act (21 U.S.C. 953(f)):
(1) Both the country to which the controlled substance is exported
from the United States (referred to in this section as the ``first
country'') and the country to which the controlled substance is
exported from the first country (referred to in this section as the
``second country'') are parties to the Single Convention on Narcotic
Drugs, 1961, and the Convention on Psychotropic Substances, 1971;
(2) The first country and the second country have each instituted
and maintain, in conformity with such Conventions, a system of controls
of imports of controlled substances which the Administration deems
adequate;
(3) With respect to the first country, the controlled substance is
consigned to a holder of such permits or licenses as may be required
under the laws of such country, and a permit or license to import the
controlled substance has been issued by the country;
(4) With respect to the second country, substantial evidence is
furnished to the Administration by the applicant for the export permit
that--
(i) The controlled substance is to be consigned to a holder of such
permits or licenses as may be required under the laws of such country,
and a permit or license to import the controlled substance is to be
issued by the country; and
(ii) The controlled substance is to be applied exclusively to
medical, scientific, or other legitimate uses within the country;
(5) The controlled substance will not be exported from the second
country;
(6) The person who exported the controlled substance from the
United States has complied with paragraph (d) of this section and a
permit to export the controlled substance from the United States has
been issued by the Administration; and
(7) Within 30 days after the controlled substance is exported from
the first country to the second country, the person who exported the
controlled substance from the United States must deliver to the
Administration documentation certifying that such export from the first
country has occurred. If the permit issued by the Administration
authorized the reexport of a controlled substance from the first
country to more than one second country, notification of each
individual reexport shall be provided. This documentation shall be
submitted on company letterhead, signed by the responsible company
official, and shall include the following information:
(i) Name of second country;
(ii) Actual quantity shipped;
(iii) Actual date shipped; and
(iv) DEA export permit number for the original export.
(d) Where a person is seeking to export a controlled substance for
[[Page 61441]]
reexport in accordance with paragraph (c) of this section, the
following requirements shall apply in addition to (and not in lieu of)
the requirements of paragraphs (a) and (b) of this section:
(1) Bulk substances will not be reexported in the same form as
exported from the United States, i.e., the material must undergo
further manufacturing process. This further manufactured material may
only be reexported to a country of ultimate consumption.
(2) Finished dosage units, if reexported, must be in a commercial
package, properly sealed and labeled for legitimate medical use in the
country of destination (the second country);
(3) Any proposed reexportation must be made known to the
Administration at the time the initial DEA Form 161-r is submitted. In
addition, the following information must also be provided where
indicated on the form:
(i) Whether the drug or preparation will be reexported in bulk or
finished dosage units;
(ii) The product name, dosage strength, commercial package size,
and quantity;
(iii) The name of consignee, complete address, and expected
shipment date, as well as the name and address of the ultimate
consignee in the country to where the substances will be reexported.
(4) The application (DEA Form 161-r) must also contain an affidavit
that the consignee in the country of ultimate destination (the second
country) is authorized under the laws and regulations of the country of
ultimate destination to receive the controlled substances. The
affidavit must also contain the following statement, in addition to the
statements required under paragraph (a) of this section:
(i) That the packages are labeled in conformance with the
obligations of the United States under the Single Convention on
Narcotic Drugs, 1961, the Convention on Psychotropic Substances, 1971,
and any amendments to such treaties;
(ii) That the controlled substances are to be applied exclusively
to medical or scientific uses within the country to which reexported
(the second country);
(iii) That the controlled substances will not be further reexported
from the second country, and
(iv) That there is an actual need for the controlled substances for
medical or scientific uses within the second country.
(5) If the applicant proposes that the shipment of controlled
substances will be separated into parts after it arrives in the first
country and then reexported to more than one second country, the
applicant shall so indicate on the DEA Form 161-r, providing all the
information required in this section for each second country.
(6) Within 30 days after the controlled substance is exported from
the United States, the person who exported the controlled substance
shall deliver to the Administration documentation on the DEA Form 161-r
initially completed for the transaction certifying that such export
occurred. This documentation shall be signed by the responsible company
official and shall include the following information:
(i) Actual quantity shipped;
(ii) Actual date shipped; and
(iii) DEA export permit number.
(7) The controlled substance will be reexported from the first
country to the second country (or second countries) no later than 90
days after the controlled substance was exported from the United
States.
(8) Shipments that have been exported from the United States and
are refused by the consignee in the country of destination (the second
country), or are otherwise unacceptable or undeliverable, may be
returned to the registered exporter in the United States upon
authorization of the Administration. In these circumstances, the
exporter in the United States shall file a written request for the
return of the controlled substances to the United States with a brief
summary of the facts that warrant the return, along with a completed
DEA Form 357, Application for Import Permit, with the Drug Enforcement
Administration, Import/Export Unit, Washington, DC 20537. The
Administration will evaluate the request after considering all the
facts as well as the exporter's registration status with the
Administration. If the exporter provides sufficient documentation, the
Administration will issue an import permit for the return of these
drugs, and the exporter can then obtain an export permit from the
country of original importation. The substance may be returned to the
United States only after affirmative authorization is issued in writing
by the Administration.
(e) In considering whether to grant an application for a permit
under paragraphs (c) and (d) of this section, the Administration shall
consider whether the applicant has previously obtained such a permit
and, if so, whether the applicant complied fully with the requirements
of this section.
3. Section 1312.23 is proposed to be amended by revising paragraphs
(a) and (f) to read as follows:
Sec. 1312.23 Issuance of export permit.
(a) The Administration may authorize exportation of any controlled
substance listed in Schedule I or II or any narcotic controlled
substance listed in Schedule III or IV if he finds that such
exportation is permitted by subsections 1003(a), (b), (c), (d), or (f)
of the Act (21 U.S.C. Sec. 953(a), (b), (c), (d), or (f).
* * * * *
(f) No export permit shall be issued for the exportation, or
reexportation, of any controlled substance to any country when the
Administration has information to show that the estimates or
assessments submitted with respect to that country for the current
period, under the Single Convention on Narcotic Drugs, 1961, or the
Convention on Psychotropic Substances, 1971, have been, or, considering
the quantity proposed to be imported, will be exceeded. If it shall
appear through subsequent advice received from the International
Narcotics Control Board of the United Nations that the estimates or
assessments of the country of destination have been adjusted to permit
further importation of the controlled substance, an export permit may
then be issued if otherwise permissible.
Dated: October 10, 2006.
Joseph T. Rannazzisi,
Deputy Assistant Administrator, Office of Diversion Control.
[FR Doc. E6-17275 Filed 10-17-06; 8:45 am]
BILLING CODE 4410-09-P
