Elimination of Exemptions for Chemical Mixtures Containing the List I Chemicals Ephedrine and/or Pseudoephedrine, 40738-40745 [E7-14295]

Agencies

• Drug Enforcement Administration
• Department of Justice

[Federal Register Volume 72, Number 142 (Wednesday, July 25, 2007)]
[Rules and Regulations]
[Pages 40738-40745]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-14295]


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DEPARTMENT OF JUSTICE

Drug Enforcement Administration

21 CFR Part 1310

[Docket No. DEA-284I]
RIN 1117-AB11


Elimination of Exemptions for Chemical Mixtures Containing the 
List I Chemicals Ephedrine and/or Pseudoephedrine

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

ACTION: Interim rule with request for comments.

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SUMMARY: This Interim Rule removes the Controlled Substances Act (CSA) 
exemptions for chemical mixtures containing ephedrine and/or 
pseudoephedrine with concentration limits at or below five percent. The 
Combat Methamphetamine Epidemic Act of 2005 (CMEA) added additional 
controls on ephedrine and pseudoephedrine and mandated that DEA limit 
the domestic production and importation of materials containing 
ephedrine and pseudoephedrine to quantities necessary for medical, 
scientific and other legitimate purposes (21 U.S.C. 952(a)(1) as 
amended). DEA is eliminating exemptions for these chemical mixtures. As 
such, all ephedrine and pseudoephedrine chemical mixtures, regardless 
of concentration and form, shall be subject to the regulatory 
provisions of the CSA.
    DEA is not prohibiting the importation, exportation, manufacture, 
or distribution of chemical mixtures containing ephedrine or 
pseudoephedrine in concentrations less than or equal to five percent. 
Rather, DEA is regulating the importation, exportation, manufacture, 
and distribution of these chemical mixtures by requiring persons who 
handle these chemical mixtures to register with DEA, maintain certain 
records common to business practice, and file certain reports, 
regarding these chemical mixtures. Chemical mixtures containing the 
List I chemicals ephedrine and pseudoephedrine will still be available 
for use.

DATES: Effective August 24, 2007.
    Persons seeking registration must apply on or before August 24, 
2007 in order to continue their business pending final action by DEA on 
their application. Written comments must be postmarked, and electronic 
comments must be sent, on or before September 24, 2007.

ADDRESSES: To ensure proper handling of comments, please reference 
``Docket No. DEA-284I'' on all written and electronic correspondence. 
Written comments being sent via regular mail should be sent to the 
Deputy Administrator, Drug Enforcement Administration, Washington, DC 
20537, Attention: DEA Federal Register Representative/ODL. Written 
comments sent via express mail should be sent to DEA Headquarters, 
Attention: DEA Federal Register Representative/ODL, 2401 Jefferson-
Davis Highway, Alexandria, VA 22301. Comments may be sent directly to 
DEA electronically by sending an electronic message to 
dea.diversion.policy@usdoj.gov. Comments may also be sent 
electronically through https://www.regulations.gov using the electronic 
comment form provided on that site. An electronic copy of this document 
is also available at the https://www.regulations.gov Web site. DEA will 
accept attachments to electronic comments in Microsoft Word, 
WordPerfect, Adobe PDF, or Excel file formats only. DEA will not accept 
any file format other than those specifically listed here.
    Posting of Public Comments: Please note that all comments received 
are considered part of the public record and made available for public 
inspection online at https://www.regulations.gov. Such information 
includes personal identifying information (for example, name, address, 
etc.) voluntarily submitted by the commenter.
    If you want to submit personal identifying information (such as 
your name, address, etc.) as part of your comment, but do not want it 
to be posted online, you must include the phrase ``PERSONAL IDENTIFYING 
INFORMATION'' in the first paragraph of your comment. You must also 
place all the personal identifying information you do not want posted 
online in the first paragraph of your comment and identify the 
information you want redacted.
    If you want to submit confidential business information as part of 
your comment but do not want it to be posted online, you must include 
the phrase ``CONFIDENTIAL BUSINESS INFORMATION'' in the first paragraph 
of your comment. You must also prominently identify confidential 
business information to be redacted within the comment. If a comment 
has so much confidential business information that it cannot be 
effectively redacted, all or part of that comment may not be posted on 
https://www.regulations.gov.
    Personal identifying information and confidential business 
information identified and located as set forth above will be redacted 
and placed in the agency's public docket file, and, where possible, 
posted online. If you wish to inspect the agency's public docket file 
in person by appointment, please see the FOR FURTHER INFORMATION 
paragraph.

FOR FURTHER INFORMATION CONTACT: Christine A. Sannerud, PhD, Chief, 
Drug & Chemical Evaluation Section, Office of Diversion Control, Drug 
Enforcement Administration, Washington, DC 20537, telephone (202) 307-
7183, fax (202) 353-1263, or e-mail ode@dea.usdoj.gov.

SUPPLEMENTARY INFORMATION: 

I. Background

Status of Dietary Supplements Containing Ephedrine and/or 
Pseudoephedrine

    Dietary supplements containing the List I chemicals ephedrine or 
pseudoephedrine are regulated as chemical mixtures under the Controlled 
Substances Act (CSA). DEA originally exempted these products from CSA 
regulatory control if the total concentration of the ephedrine and/or 
pseudoephedrine was at or below five percent, in an effort to reduce 
the regulatory burden on the dietary and nutritional supplement 
industry (68 FR 23195, May 1, 2003). However, on February 11, 2004, the 
Food and Drug Administration (FDA) issued a Final Rule (69 FR 6787) 
declaring dietary supplements containing ephedrine alkaloids 
adulterated under the Federal Food, Drug, and Cosmetic Act (the FFD&C 
Act) because these dietary supplements present an unreasonable risk of 
illness or injury. Effective April 12, 2004, the rule prohibits the 
sale of dietary supplements containing ephedrine alkaloids such as 
ephedra (also known as Ma Huang, sida cordifolia and pinellia). The 
effect of the FDA rule was to ban the lawful marketing of these 
products.
    DEA notes that the FDA ban addresses only the marketing of dietary 
supplements containing ephedrine alkaloids. The raw materials used to 
manufacture these dietary supplements are not restricted by the FDA 
ban. Accordingly, to control those materials, DEA must address the 
importation, exportation, manufacture, or distribution of chemical 
mixtures with

[[Page 40739]]

concentration limits of ephedrine and/or pseudoephedrine at or below 
five percent. The importation, exportation, manufacture, and 
distribution of chemical mixtures with concentration limits at or below 
five percent ephedrine and/or pseudoephedrine are addressed by the CSA 
and its implementing regulations. As there yet may be legitimate uses 
for chemical mixtures with concentration limits at or below five 
percent, the importation, exportation, manufacture, and distribution of 
these chemical mixtures (for purposes other than use in dietary 
supplements containing ephedrine alkaloids) are not prohibited by 
either FDA's ban regarding the marketing of such dietary supplements or 
by DEA law and regulations. Accordingly, as discussed further below, 
for DEA to regulate the importation, exportation, manufacture, and 
distribution of chemical mixtures containing ephedrine and/or 
pseudoephedrine with concentration limits at or below five percent, DEA 
must remove these chemical mixtures from their exempt status under CSA 
regulations.
    DEA recognizes that ephedra materials containing ephedrine and/or 
pseudoephedrine are used legitimately by practitioners of Traditional 
Chinese Medicine. This rulemaking does not restrict the utilization of 
such material for such legitimate purposes. This rulemaking will simply 
require importers and suppliers of such material to comply with DEA 
recordkeeping, registration, quota and import/export requirements.

Plant Material Included in This Regulatory Action

    The ephedrine alkaloids, including, among others, ephedrine, 
pseudoephedrine, norephedrine, N-methylephedrine, norpseudoephedrine, 
N-methylpseudoephedrine, are chemical stimulants that occur naturally 
in some botanicals, but can be synthetically derived. The ingredient 
sources of the ephedrine alkaloids include raw botanicals (i.e., 
plants) and extracts from botanicals. Ma Huang, ephedra, Chinese 
Ephedra, and epitonin are several names used for botanical ingredients, 
primarily from Ephedra sinica Stapf, ephedra equisetina Bunge, Ephedra 
intermedia var. tibetica Stapf and Ephedra distachya Linne. (the 
Ephedras), that are sources of ephedrine alkaloids (including ephedrine 
and pseudoephedrine). Other plant sources that contain such ephedrine 
alkaloids include Sida cordifolia L. and Pinellia ternata (Thunb.) 
Makino. Common names that have been used for the various plants that 
contain ephedrine alkaloids include sea grape, yellow horse, joint fir, 
popotillo, and country mallow. Although the proportions of the various 
ephedrine alkaloids in botanical species vary from one species to 
another, in most species used commercially, ephedrine is typically the 
predominant alkaloid in the raw material. In addition to chemical 
mixtures from synthetic sources, this rulemaking includes those plant 
sources that contain the ephedrine alkaloids, ephedrine and/or 
pseudoephedrine.
    The names desert herb, squaw tea, Brigham tea, and Mormon tea refer 
to North American species of ephedra that do not contain ephedrine 
alkaloids but have been misused to identify ephedrine alkaloid 
containing ingredients. This rulemaking does not pertain to species of 
ephedra that do not contain ephedrine and/or pseudoephedrine.

Combat Methamphetamine Epidemic Act of 2005 (CMEA)

    On March 9, 2006, the President signed the Combat Methamphetamine 
Epidemic Act of 2005 (CMEA), which is Title VII of the USA PATRIOT 
Improvement and Reauthorization Act of 2005. The CMEA mandates that DEA 
limit the domestic production and importation of materials containing 
ephedrine and pseudoephedrine (including ephedra) to quantities 
necessary for medical, scientific and other legitimate purposes (21 
U.S.C. 826 and 952(a)(1) as amended). DEA is concerned about the 
illicit use of ephedra type material in the clandestine production of 
methamphetamine. While the legitimate market for dietary supplements 
containing such material has been cut by FDA's recent action, DEA has 
seen an increasing number of requests for importation of below-five 
percent ephedrine and/or pseudoephedrine material. DEA notes that there 
may be legitimate uses for these chemical mixtures. However, in light 
of FDA's action, DEA is concerned about the intended purpose of such 
material, especially given that such material has been seized in 
clandestine drug laboratories.

Chemical Mixture Regulatory Control History

    The Chemical Diversion and Trafficking Act of 1988 (Pub. L. 100-
690) (CDTA) was passed by Congress to curtail the diversion of specific 
chemicals used in the illicit manufacture of controlled substances. The 
CDTA established recordkeeping and reporting requirements necessary for 
DEA to identify and track chemical diversion. While the CDTA achieved 
initial success in curtailing the diversion of chemicals, traffickers 
soon found and took advantage of certain shortcomings in the law. In 
the United States (U.S.), traffickers were able to obtain needed 
supplies by purchasing products that were exempted from regulation 
under the CDTA. Such products include chemical mixtures.

Chemical Mixture Definition

    The CDTA created a definition of ``chemical mixture'' (21 U.S.C. 
802(40)), and exempted chemical mixtures from the definition of 
``regulated transaction.'' (21 U.S.C. 802(39)(A)(vi) as amended by 
CMEA) Chemical mixtures are defined as ``a combination of two or more 
chemical substances, at least one of which is not a list I chemical or 
a List II chemical, except that such term does not include any 
combination of a List I chemical or a List II chemical with another 
chemical that is present solely as an impurity.'' (21 U.S.C. 802(40))

Chemical Mixtures Containing Ephedrine and Pseudoephedrine

    Ephedrine and pseudoephedrine are List I chemicals. Listed 
chemicals that are classified as List I chemicals are important to the 
manufacture of controlled substances. Chemical mixtures containing both 
these List I chemicals include dietary and nutritional supplements. 
Prior to FDA's 2004 Final Rule, dietary and nutritional supplements 
containing both of these chemicals were readily available in the U.S., 
commonly sold to the public in drug and grocery stores, health and 
nutrition stores, and through direct marketing campaigns. These dietary 
and nutritional supplements contained ephedra plant material, or 
extracts from the ephedra plant. If these dietary and nutritional 
supplements met certain criteria under the FFD&CA, they were not 
recognized as drugs under the FFD&CA, but nonetheless were considered 
to be chemical mixtures governed by DEA law and regulations. In 
contrast, over-the-counter (OTC) and prescription drug products 
containing these listed chemicals are not considered chemical mixtures 
(as long as they are in final FDA approved labeled package form) and 
instead are specifically addressed in 21 U.S.C. 802(39)(A)(iv) and (v) 
as amended by CMEA. Also see 21 CFR 1300.02(b)(28)(i).

Initial Chemical Mixture Controls

    Prior to the Domestic Chemical Diversion Control Act of 1993 
(DCDCA), enacted in April of 1994, transactions involving all chemical 
mixtures

[[Page 40740]]

(including dietary supplements) were exempt from recordkeeping, 
registration and other chemical regulatory control requirements of the 
CSA. The DCDCA amended the CSA (21 U.S.C. 802(39)(A)(v)) to limit the 
application of the above stated exemption and provided the Attorney 
General with the authority to exempt a chemical mixture containing a 
listed chemical if it is ``formulated in such a way that it cannot be 
easily used in the illicit production of a controlled substance'' and 
``the listed chemical or chemicals contained in the mixture cannot be 
readily recovered.'' As such, only those chemical mixtures meeting 
these criteria would be exempted from control. Until regulations which 
delineated criteria and procedures for exempting specific chemical 
mixtures were finalized, as a practical interpretation of the law, DEA 
treated all chemical mixtures, including dietary and nutritional 
supplements, as being exempt from the chemical regulatory requirements 
of the CSA. (Note that OTC and prescription drug products are not 
considered chemical mixtures and are addressed separately under 21 
U.S.C. 802(39)(A)(iv)). Unless exempted pursuant to law and 
regulations, the requirements for chemical mixtures included 
registration for certain handlers of List I chemicals, recordkeeping, 
reporting and security.

Concern Regarding Chemical Mixtures

    Some chemical mixtures can be and have been used by traffickers in 
the illicit manufacture of controlled substances. This exemption 
provided traffickers with an unregulated source for obtaining these 
chemicals. To address these problems, the DCDCA amended the exemption 
to provide that only those chemical mixtures specified by regulation 
would be exempt from the definition of ``regulated transaction.''
    Regulations regarding the exemption of chemical mixtures were 
initially proposed by DEA on October 13, 1994 (59 FR 51888). In 
response to industry concerns, the proposed regulations were withdrawn 
on December 9, 1994 (59 FR 63738). After consulting with the private 
sector and carefully considering industry and other concerns, new 
regulations regarding chemical mixtures were proposed on September 16, 
1998 (63 FR 49506). The comment period, which was twice extended, 
closed on April 16, 1999.
    There are thousands of chemical mixtures in legitimate commerce, 
the majority of which are not useful to the illicit laboratory 
operator. The NPRM proposed criteria for the determination of whether a 
chemical mixture would be automatically exempt from CSA regulatory 
controls. Additionally, the NPRM defined an application process by 
which manufacturers may apply for an exemption for chemical mixtures 
that do not qualify for automatic exemption.
    The DEA proposed that each chemical be assigned a concentration 
limit that, if found at or below the limit, will cause the mixture to 
be treated as exempt from specific provisions of the CSA. This 
quantitative approach to identifying regulated mixtures was considered 
necessary due to the complexity of chemical-based commodities and the 
huge variety of products. These criteria were expected to exempt the 
vast majority of chemical mixtures containing listed chemicals from 
regulatory control. The NPRM included the proposed creation of a 
``Table of Concentration Limits,'' in 21 CFR 1310.12. This table lists 
the concentration limits for each listed chemical.
    In recognition that not all mixtures that qualify for exemption can 
be identified by concentration or category, the DEA also proposed an 
application process to exempt additional mixtures which are not likely 
to be diverted for use in the illicit production of controlled 
substances.
    DEA originally proposed a concentration limit of two percent for 
chemical mixtures containing ephedrine and/or pseudoephedrine. However, 
based on the comments received from the NPRM (63 FR 49506, Sept. 16, 
1998), DEA determined that a five percent concentration limit would be 
more appropriate. On May 1, 2003, DEA published a Final Rule (68 FR 
23195) which established a concentration limit of five percent for 
chemical mixtures which contain ephedrine and/or pseudoephedrine.
    If the concentration of the total ephedrine and/or pseudoephedrine 
was at or below the five percent limit in a chemical mixture, the 
mixture was automatically exempted from the registration, reporting, 
recordkeeping and security requirements of the CSA. That Final Rule 
primarily addressed those chemicals encountered in dietary and 
nutritional supplements.
    The May 1, 2003, Final Rule also established an exemption for the 
category of products consisting of unaltered harvested plant material 
in 21 CFR 1310.12(d)(1). Finally, that rule provided for a process 
whereby a manufacturer of a product which would otherwise be subject to 
regulation may request an exemption for that specific product. This 
process allows chemical mixtures not automatically exempt by the 
concentration limit to be considered for exempt status under the CSA.

Recent FDA Action Pertaining to Dietary Supplements Containing 
Ephedrine Alkaloids

    In 2004, FDA issued a Final Rule declaring dietary supplements 
containing ephedrine alkaloids ``adulterated'' under the FFD&C Act (69 
FR 6787, February 11, 2004). FDA issued this rule after concluding that 
these products present an unreasonable risk of illness or injury. FDA's 
Final Rule prohibits the sale of these products and FDA has been 
seizing dietary supplements containing ephedrine alkaloids since the 
Final Rule became effective in April 2004. The FDA Final Rule addressed 
the marketing of dietary supplements containing ephedrine alkaloids; it 
did not address the importation, exportation, manufacture or 
distribution of ephedrine and/or pseudoephedrine chemical mixtures with 
concentration limits at or below five percent, if the chemical mixture 
is not being marketed as a dietary supplement containing ephedrine 
alkaloids. DEA notes that there yet may be legitimate uses for such 
mixtures. As there yet may be legitimate uses for chemical mixtures 
with concentration limits at or below 5 percent, the importation, 
exportation, manufacture, and distribution of these chemical mixtures 
(for purposes other than use in dietary supplements containing 
ephedrine alkaloids) are not prohibited by either FDA's ban regarding 
the marketing of such dietary supplements or by DEA law and 
regulations. In spite of FDA's ban, and corresponding reduction in 
legitimate need for these chemical mixtures, DEA has seen a significant 
increase in the number of import requests for ephedra, sparking a 
concern that these chemical mixtures are being diverted for use in the 
illicit manufacture of methamphetamine.

Combat Methamphetamine Epidemic Act of 2005 (CMEA)

    On March 9, 2006, the President signed the USA PATRIOT Improvement 
and Reauthorization Act of 2005 which included the Combat 
Methamphetamine Epidemic Act of 2005 (CMEA) (Title VII of Pub. L. 109-
177). The CMEA placed additional controls on ephedrine and 
pseudoephedrine and tasked DEA with limiting the domestic production 
and importation of ephedrine and pseudoephedrine materials to 
quantities necessary for medical, scientific and other legitimate 
purposes (21 U.S.C. 826 and 952(a)(1) as amended).
    The CMEA imposed new requirements regarding the retail sale of 
scheduled listed chemical products (products containing ephedrine,

[[Page 40741]]

pseudoephedrine, or phenylpropanolamine, that may be marketed or 
distributed lawfully in the United States under the FFD&CA as 
nonprescription products). In a separate rulemaking, ``Retail Sales of 
Scheduled Listed Chemical Products; Self-Certification of Regulated 
Sellers of Scheduled Listed Chemical Products'' [Docket No. DEA-291, 
RIN 1117-AB05] (71 FR 56008, September 26, 2006; corrected at 71 FR 
60609, October 13, 2006), DEA promulgated regulations implementing 
these provisions. The CMEA also subjects material containing ephedrine, 
pseudoephedrine and phenylpropanolamine to manufacturing and import 
restrictions. Specifically, the CMEA requires that importers of all 
listed chemicals provide DEA with information regarding the transferee, 
(i.e., the downstream customer) of the chemical, as well as information 
regarding the quantity of the chemical to be transferred. Importers are 
further required to provide DEA with a return declaration regarding 
each import after the transaction is completed (CMEA section 716, 21 
U.S.C. 971(d) and (g), as amended). In a separate rulemaking, 
``Implementation of the Combat Methamphetamine Epidemic Act of 2005; 
Notice of Transfers Following Importation or Exportation'' [Docket No. 
DEA-292, RIN 1117-AB06] (72 FR 17401, April 9, 2007; Temporary Stay of 
Certain Provisions 72 FR 28601, May 22, 2007), DEA promulgated 
regulations implementing these provisions. Further, the CMEA requires 
that the notice of importation (DEA Form 486) for ephedrine, 
pseudoephedrine, and phenylpropanolamine ``shall include all 
information known to the importer on the chain of distribution of such 
chemical from the manufacturer to the importer.'' (CMEA section 721, 21 
U.S.C. 971(h) as amended). In a separate rulemaking, ``Information of 
Foreign Chain of Distribution for Certain List I Chemicals'' [Docket 
No. DEA-295, RIN 1117-AB07], DEA is promulgating regulations to 
implement this provision. Finally, the CMEA requires DEA to establish 
import and production quotas for ephedrine, pseudoephedrine, and 
phenylpropanolamine (CMEA sections 713 and 715, 21 U.S.C. 826 and 952 
as amended). In a separate rulemaking, ``Import and Production Quotas 
for Certain List I Chemicals'' [Docket No. DEA-293, RIN 1117-AB08] (72 
FR 37439, July 10, 2007) DEA promulgated regulations to implement these 
provisions.
    DEA is removing the exemption for five percent ephedrine and/or 
pseudoephedrine, in part, to fulfill the Congressional mandate of 
restricting such material to quantities necessary for medical, 
scientific, and other legitimate purposes (21 U.S.C. 826 and 952(a)(1) 
as amended). Without removing the exemption for these products, DEA 
would be unable to effectively limit the importation of ephedrine and 
pseudoephedrine, as required by the CMEA.

Present Concerns: Use at Illicit Laboratories

    DEA is also authorized to remove an exemption for particular exempt 
chemical mixtures if it finds evidence of diversion pursuant to 21 CFR 
1310.12(e). This regulation provides that should DEA find such 
evidence, it can ``issue, and publish in the Federal Register, 
notification of the removal of an exemption.'' Interested parties are 
invited to file written comments or objections to the order within 60 
days of the date of publication. If any comment or objection raises 
``significant issues regarding any finding of fact or conclusion of law 
upon which the order is based, [DEA] shall immediately suspend the 
effectiveness of the order'' and reconsider the application for 
exemption in light of the comments received.
    At most methamphetamine laboratories seized in the U.S., the 
precursor material was obtained via the diversion of OTC ephedrine or 
pseudoephedrine products marketed in tablet and capsule form. While the 
vast majority of products seized at illicit methamphetamine 
laboratories were OTC drug products, ephedra and ma huang extracts 
containing ephedrine, N-methylephedrine, N-methylpseudoephedrine, 
norpseudoephedrine, phenylpropanolamine, and pseudoephedrine, and 
dietary supplement products (containing ephedra and ma huang extracts) 
have been seized. At this time, the frequency with which these dietary 
supplement products and extracts are encountered is small. From 1998 
through 2005, DEA has documented 20 methamphetamine laboratories where 
ephedra materials have been seized. The source of precursor chemicals 
in a seized clandestine laboratory is often not evident, so it is 
likely that the number of seized laboratories that used such mixtures 
is actually greater. Ephedra, therefore, can and is being diverted for 
use as a precursor material for the illicit production of 
methamphetamine. Were DEA not to regulate chemical mixtures containing 
ephedrine and/or pseudoephedrine at or below the current five percent 
concentration limit, DEA is concerned that these products would be more 
widely diverted for illicit production of methamphetamine, particularly 
as traffickers look for easily-obtainable product due to the new retail 
sales, quota and import restrictions imposed by CMEA.

DEA Concerns Regarding Recent Importations

    Recently DEA has seen an increasing number of requests for 
importation of large shipments of ephedra material in concentrations 
below the five percent ephedrine and pseudoephedrine exemption limit. 
Traditionally, such ephedra extract material has always been between 6-
8 percent ephedrine and/or pseudoephedrine.
    As noted above, DEA has seen chemical mixtures with concentration 
limits of ephedrine and/or pseudoephedrine at or below five percent in 
clandestine methamphetamine laboratories. Subsequent to implementing 
regulations which allowed an exemption for below five percent material, 
DEA has witnessed increased ability of clandestine laboratory operators 
to extract ephedrine and pseudoephedrine from various bulk materials 
(including low concentration mixtures). These extraction procedures are 
shared via the Internet. While these mixtures may contain low 
concentrations of ephedrine and/or pseudoephedrine, they can be a ready 
source of supply for methamphetamine traffickers.
    Therefore, due to the existing clandestine methamphetamine 
laboratory problem and the illicit use of extracts and dietary 
supplements (containing ephedrine and related List I chemicals) as 
precursor material for the clandestine production of methamphetamine, 
and the new limitations imposed by the CMEA, DEA is removing the 
exemption for chemical mixtures having a total concentration of less 
than (or equal to) five percent ephedrine or pseudoephedrine and is 
removing the exemption for unaltered ephedra plant material.

Action Taken in This Interim Rule

    This Interim Rule announces the removal of the exemption for 
chemical mixtures having a total concentration of ephedrine and/or 
pseudoephedrine of five percent (or less). By removing these 
exemptions, all chemical mixtures containing ephedrine and/or 
pseudoephedrine will be regulated chemical mixtures subject to control 
under the Controlled Substances Act, including registration, 
recordkeeping, reporting, and security controls. This action will be 
effective August 24, 2007.

[[Page 40742]]

    This rulemaking also removes the exemption for the category of 
products consisting of harvested plant material which is specified in 
21 CFR 1310.12(d)(1). Harvested plant material (i.e., ephedra) that 
contains ephedrine, N-methylephedrine, N-methylpseudoephedrine, 
norpseudoephedrine, phenylpropanolamine, and/or pseudoephedrine, 
meeting the definition of chemical mixture, shall no longer be exempt 
from CSA provisions, even when the plant material is unaltered from its 
natural state.

II. Provisions Specifically Applying to Regulated Chemical Mixtures 
Containing These List I Chemicals

    Effective August 24, 2007, any chemical mixture that contains 
ephedrine or pseudoephedrine will be treated as a List I chemical. 
Transactions that meet or exceed the cumulative monthly threshold for 
the listed chemical, set forth at 21 CFR 1310.04, shall be regulated 
transactions. Persons interested in handling a regulated mixture must 
comply with the following:
    Registration. Any person who manufactures, distributes, imports or 
exports a regulated mixture, or proposes to engage in such activities, 
with respect to a regulated mixture containing a List I chemical, shall 
obtain a registration pursuant to the CSA (21 U.S.C. 822). Regulations 
describing registration for List I chemical handlers are set forth in 
21 CFR part 1309.
    Separate registration is required for manufacture, distribution, 
importing, and exporting. A separate registration is required for each 
principal place of business at one general physical location where List 
I chemicals are manufactured, distributed, imported, or exported by a 
person (21 CFR 1309.23). Effective August 24, 2007, any person 
manufacturing, distributing, importing, or exporting any amount of a 
regulated mixture will become subject to the registration requirement 
under the CSA. DEA recognizes, however, that it is not possible for 
persons who are subject to the registration requirement to immediately 
complete and submit an application for registration and for DEA to 
immediately issue registrations for those activities. Therefore, in 
order to allow continued legitimate commerce in regulated mixtures, DEA 
is establishing in 21 CFR 1310.09 a temporary exemption from the 
registration requirement for persons desiring to engage in activities 
with regulated mixtures, provided that DEA receives a properly 
completed application for registration on or before August 24, 2007. 
The temporary exemption for such persons will remain in effect until 
DEA takes final action on their application for registration.
    The temporary exemption applies solely to the registration 
requirement; all other chemical control requirements, including 
recordkeeping and reporting, are effective on August 24, 2007. 
Therefore, all transactions of chemical mixtures containing ephedrine 
or pseudoephedrine will be regulated, if at or above threshold, while 
an application for registration or exemption is pending. This is 
necessary because not regulating these transactions could result in 
increased diversion of chemicals desirable to drug traffickers.
    Additionally, the temporary exemption does not suspend applicable 
federal criminal laws relating to the regulated mixture, nor does it 
supersede state or local laws or regulations. All handlers of a 
regulated mixture must comply with applicable state and local 
requirements in addition to the CSA regulatory controls.
    Records and Reports. The CSA (21 U.S.C. 830) requires certain 
records to be kept and reports to be made involving listed chemicals. 
Regulations describing recordkeeping and reporting requirements are set 
forth in 21 CFR Part 1310. A record must be made and maintained for two 
years after the date of a regulated transaction involving a List I 
chemical. Only a distribution, receipt, sale, importation, exportation, 
brokerage or trade of a regulated mixture above the established 
threshold is a regulated transaction (21 CFR 1300.02(b)(28)).
    Each regulated bulk manufacturer of a regulated mixture shall 
submit manufacturing, inventory, and use data on an annual basis (21 
CFR 1310.05(d)). Bulk manufacturers producing the mixture solely for 
internal consumption, e.g. formulating a nonregulated mixture, are not 
required to submit this information. Existing standard industry reports 
containing the required information are acceptable, provided the 
information is readily retrievable from the report.
    21 CFR 1310.05 requires that each regulated person shall report to 
DEA any regulated transaction involving an extraordinary quantity, an 
uncommon method of payment or delivery, or any other circumstance that 
causes the regulated person to believe that the listed chemical will be 
used in violation of the CSA. Section 1310.03(c) requires that 
regulated persons who engage in a transaction with a nonregulated 
person or who engage in an export transaction that involves ephedrine 
or pseudoephedrine, including drug products containing these chemicals, 
and uses or attempts to use the Postal Service or any private or 
commercial carrier must file monthly reports of each such transaction.
    Imports/Exports. All imports/exports and brokered transactions of 
regulated mixtures containing ephedrine and/or pseudoephedrine shall 
comply with the CSA (21 U.S.C. 952, 957 and 971). Regulations for 
importation and exportation of List I chemicals are described in 21 CFR 
part 1313. Separate registration is necessary for each activity (21 CFR 
1309.22).
    Security. Regulated persons must provide effective controls and 
procedures to guard against theft and diversion of regulated mixtures. 
Regulated persons must store the regulated mixtures in containers 
sealed so that tampering will be evident; if the mixture cannot be 
stored in a sealed container, access to the chemicals must be 
controlled (21 CFR 1309.71).
    Administrative Inspection. Places, including factories, warehouses, 
or other establishments and conveyances, where regulated persons may 
lawfully hold, manufacture, or distribute, dispense, administer, or 
otherwise dispose of a regulated mixture or where records relating to 
those activities are maintained, are controlled premises as defined in 
21 CFR 1316.02(c). The CSA (21 U.S.C. 880) allows for administrative 
inspections of these controlled premises as provided in 21 CFR Part 
1316 Subpart A.

Regulatory Certifications

Administrative Procedure Act
    The Administrative Procedure Act (APA) generally requires that 
agencies, prior to issuing a new rule, publish a notice of proposed 
rulemaking in the Federal Register. The APA also provides, however, 
that agencies may be excepted from this requirement when ``the agency 
for good cause finds (and incorporates the finding and a brief 
statement of reasons therefor in the rules issued) that notice and 
public procedure thereon are impracticable, unnecessary, or contrary to 
the public interest.'' 5 U.S.C. 553(b)(B).
    With publication of this interim rule, DEA is invoking this ``good 
cause'' exception to the APA's notice requirement based on the 
combination of several extraordinary factors. Section 713 of the CMEA 
(21 U.S.C. 826 as amended) requires the establishment of production 
quotas for the List I chemicals ephedrine, pseudoephedrine, and 
phenylpropanolamine. DEA implemented these requirements in a separate 
rulemaking, ``Import and

[[Page 40743]]

Production Quotas for Certain List I Chemicals'' [Docket No. DEA-293, 
RIN 1117-AB08] (72 FR 37439, July 10, 2007). DEA cannot establish such 
quotas if certain products containing these List I chemicals are not 
regulated. To not regulate these products while at the same time 
establishing production quotas would create a loophole which 
traffickers could exploit domestically. CMEA also mandates that imports 
of ephedrine, pseudoephedrine, and phenylpropanolamine are prohibited 
except for such quantities as the Attorney General (DEA by delegation) 
finds necessary to provide for medical, scientific, or other legitimate 
purposes (CMEA section 715, 21 U.S.C. 952 as amended). DEA is further 
required to establish import quotas for these three List I chemicals. 
In order for DEA to establish quotas and meet its obligation to 
prohibit imports except those necessary to provide for a medical, 
scientific, or other legitimate purpose, as required by the CMEA, DEA 
must exercise regulatory control over chemical mixtures containing 
pseudoephedrine and ephedrine. To exercise this control, DEA must 
eliminate the exemption for chemical mixtures containing these List I 
chemicals.
    DEA is concerned about the increasing number of requests for 
importation of below-five percent ephedrine or pseudoephedrine 
material. After the recent FDA action which bans dietary supplements 
containing such material, DEA has not been able to determine the 
legitimate need for importation of such material. Therefore, in an 
effort to eliminate the undocumented importation and domestic 
distribution of such material, and to comply with all of the new 
requirements imposed by the CMEA discussed above, DEA is removing these 
exemptions.
    As has been discussed previously in this rulemaking, DEA has seized 
chemical mixtures containing ephedrine and/or pseudoephedrine with 
concentrations of less than five percent at 20 domestic clandestine 
laboratories over the past several years. The source of precursor 
chemicals in a seized clandestine laboratory is often not evident, so 
it is likely that the number of seized laboratories that used such 
mixtures is actually greater. Further, the CMEA specifically prohibits 
all importation of ephedrine, pseudoephedrine, and phenylpropanolamine 
except those quantities which the Attorney General finds to be 
necessary for medical, scientific, and other legitimate purposes. These 
seizures, coupled with the new requirements limiting importation of 
ephedrine, pseudoephedrine, and phenylpropanolamine, as well as the 
establishment of production and import quotas for these three List I 
chemicals, necessitate that DEA remove the concentration limit for 
these previously exempt chemical mixtures. Engaging in traditional 
notice and comment rulemaking would prevent DEA from complying with the 
mandates of CMEA to limit the importation and domestic production of 
these materials.
    Were DEA not to regulate chemical mixtures containing ephedrine 
and/or pseudoephedrine at or below the current five percent 
concentration limit, DEA is concerned that these products would be more 
widely diverted for illicit production of methamphetamine, particularly 
with the new quota and import restrictions imposed by CMEA. 
Accordingly, DEA finds that it is impracticable to conduct notice and 
comment rulemaking regarding the removal of the exemption for chemical 
mixtures with concentration limits at or below the current five percent 
limit. If DEA did not act in this manner, traffickers would have ready 
access to chemical mixtures which DEA has demonstrated are being used 
currently to illicitly manufacture methamphetamine. Allowing such 
illicit manufacture to continue during the pendancy of rulemaking would 
be contrary to the public interest and the intent of the Combat 
Methamphetamine Epidemic Act of 2005. The broad scope of the new law, 
as well as the expedited effective dates, is a clear reflection of 
Congress' concern about the nation's growing methamphetamine epidemic 
and its desire to act quickly to prevent further illicit use of these 
chemicals.
    In light of these factors, DEA finds that ``good cause'' exists to 
issue this interim rule without engaging in traditional notice and 
comment rulemaking. In so doing, DEA recognizes that exceptions to the 
APA's notice and comment procedures are to be ``narrowly construed and 
only reluctantly countenanced.'' Am. Fed'n of Gov't Employees v. Block, 
655 F2d 1153, 1156 (D.C. Cir. 1981) (quoting New Jersey Dep't of Envt. 
Prot. v. EPA, 626 F.2d 1038, 1045 (D.C. Cir. 1980)). Based on the 
totality of the circumstances associated with the CMEA, DEA finds that 
invocation of the ``good cause'' exception is justified.
    Further, the APA also provides that, while agencies are generally 
required to publish final rules at least 30 days before they become 
effective, they may be exempt from this requirement as well ``for good 
cause found and published with the rule.'' 5 U.S.C. 553(d)(3). As 
discussed previously, DEA has recently seen a significant increase in 
the number of requests for importation of large quantities of these 
chemical mixtures. After the recent FDA action which bans dietary 
supplements containing such material, DEA has not been able to 
determine the legitimate need for importation of such material. DEA is 
concerned about the potential illicit use of such material for 
clandestine methamphetamine manufacture, particularly as traffickers 
look for easily-obtainable product due to the retail sales limits 
recently imposed by the CMEA. Delaying the effective date of this rule 
could provide a significant loophole for domestic illicit 
methamphetamine manufacturers to take advantage of for their illegal 
activities. Therefore, DEA finds good cause not to delay the effective 
date of this rule.
Regulatory Flexibility Act
    The Deputy Administrator hereby certifies that this rulemaking has 
been drafted in accordance with the provisions of the Regulatory 
Flexibility Act (RFA) (5 U.S.C. 605(b)). The (RFA) applies to rules 
that are subject to notice and comment. As explained above, DEA has 
determined that public notice and comment are not necessary. 
Consequently, the RFA does not apply. DEA notes, however, that as 
explained in the discussion under Executive Order 12866, the costs of 
this rule are low, requiring only registration, maintenance of records, 
reports on unusual transactions, thefts or losses, and mail order 
transactions, and security. Other than the registration fee and the 
reports, these requirements can generally be met by standard business 
practices.
    DEA has determined that dietary supplements containing ephedrine 
alkaloids, including bulk material used to formulate these supplements, 
are the principal chemical mixtures that contain ephedrine and/or 
pseudoephedrine. Dietary supplements containing such ephedrine 
alkaloids have been banned by FDA. Due to (1) The CMEA mandate that DEA 
limit the domestic production and importation of materials containing 
ephedrine and pseudoephedrine to quantities necessary for medical, 
scientific and other legitimate purposes; (2) the elimination of the 
previous lawful status of such products as dietary supplements; and (3) 
the potential illicit use of such products as precursor material for 
illicit production of methamphetamine, DEA is removing the exemption 
for low concentration material, including harvested plant

[[Page 40744]]

material. This industry is comprised mainly of small businesses, as 
defined by U.S. Small Business Administration (SBA) regulations (13 CFR 
part 121). However, the lawful marketing of dietary supplements 
containing ephedrine alkaloids has been banned by FDA. As such, this 
regulatory action is not expected to impact any manufacturers whose 
product can still lawfully be marketed under the FFD&CA. Persons who 
import or distribute chemical mixtures containing ephedrine and/or 
pseudoephedrine at or below the previously-exempt five percent 
concentration limit will be affected by this rule. This rule will not 
have a significant economic impact on those persons. However, DEA is 
seeking comment specifically regarding the potential impacts of this 
regulation.
    DEA is not prohibiting the importation, exportation, manufacture, 
or distribution of chemical mixtures containing ephedrine or 
pseudoephedrine in concentrations less than or equal to five percent. 
Rather, DEA is regulating the importation, exportation, manufacture, 
and distribution of these chemical mixtures by requiring persons who 
handle these chemical mixtures to register with DEA, maintain certain 
records common to business practice, and file certain reports, 
regarding these chemical mixtures. Chemical mixtures containing the 
List I chemicals ephedrine and pseudoephedrine will still be available 
for use.
Executive Order 12866
    This regulation has been drafted and reviewed in accordance with 
Executive Order 12866, section 1(b), Principles of Regulation. DEA has 
determined that this rule is a ``significant regulatory action'' under 
Executive Order 12866, section 3(f), Regulatory Planning and Review, 
and accordingly this rule has been reviewed by the Office of Management 
and Budget (OMB).
    The rule will impose relatively low costs on regulated persons. 
Other than the annual registration fee of $1,247, there are few costs 
associated with the rule. The records required on regulated 
transactions can be met with standard business records. Reports on 
unusual sales, thefts, and losses will be filed infrequently by any one 
person. Those who sell covered mixtures and deliver them to the end 
user through the mail or other delivery services will have to file a 
monthly report. The monthly report requires only the registrant's name 
and registration number, the purchaser's name and address, the shipping 
address (if different), the name and quantity of the chemical, and the 
date of shipment; all of this information is available from standard 
business and shipping records. These reports may be filed 
electronically. The security requirements do not exceed standard 
business practices for the protection of both the security and quality 
of these products. DEA has not determined the number of firms 
potentially affected by the rule, but does not expect it to be high.
Executive Order 12988
    This regulation meets the applicable standards set forth in 
Sections 3(a) and 3(b)(2) of Executive Order 12988.
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 
$120,000,000 or more (adjusted for inflation) in any one year, and will 
not significantly or uniquely affect small governments. Therefore, no 
actions were deemed necessary under the provisions of the Unfunded 
Mandates Reform Act of 1995.
Paperwork Reduction Act
    The Drug Enforcement Administration is eliminating the current 
exemption for chemical mixtures with concentration limits of the List I 
chemicals ephedrine and/or pseudoephedrine of less than or equal to 
five percent. This means that all chemical mixtures containing the List 
I chemicals ephedrine and/or pseudoephedrine are regulated chemical 
mixtures, regardless of concentration limits.
    Due to this change in the regulations, all persons who import, 
export, manufacture, or distribute chemical mixtures containing these 
two List I chemicals will be required to register with DEA. They will 
also be required to file reports regarding certain transactions, should 
certain criteria be met.
    DEA does, however, provide a mechanism whereby a person may seek an 
exemption from these regulatory requirements for a specific chemical 
mixture, if DEA determines that such a chemical mixture cannot be used 
by traffickers to manufacture controlled substances illicitly.
    DEA notes that the lawful marketing of dietary supplements 
containing this material has been banned by FDA. As such, this 
regulatory action is expected to impact no manufacturers, whose product 
can still lawfully be marketed under the FFD&CA.
    Therefore, as the impact of this regulation is minimal, DEA is 
making minor adjustments to the OMB information collections entitled 
``Application for Registration Under Domestic Chemical Diversion 
Control Act of 1993 and Renewal Application for Registration under 
Domestic Chemical Diversion Control Act of 1993'' (OMB control number 
1117-0031, DEA Form 510), ``Report of Mail Order Transactions'' (OMB 
control number 1117-0033), and ``Import/Export Declaration for List I 
and List II Chemicals'' (OMB control number 1117-0023). DEA is 
specifically seeking comment regarding the number of persons who may be 
affected by this regulation.
Congressional Review Act
    This rule is not a major rule as defined by Section 804 of the 
Small Business Regulatory Enforcement Fairness Act of 1996 
(Congressional Review Act). This rule will not result in an annual 
effect on the economy of $100,000,000 or more; a major increase in 
costs or prices; or significant adverse effects on competition, 
employment, investment, productivity, innovation, or on the ability of 
United States-based companies to compete with foreign-based companies 
in domestic and export markets.

List of Subjects in 21 CFR Part 1310

    Drug traffic control, Exports, Imports, List I and List II 
chemicals, Reporting and Recordkeeping requirements.


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

PART 1310--RECORDS AND REPORTS OF LISTED CHEMICALS AND CERTAIN 
MACHINES [AMENDED]

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

    Authority: 21 U.S.C. 802, 827(h), 830, 871(b), 890.


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


Sec.  1310.09  Temporary exemption from registration.

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

[[Page 40745]]

a registration to manufacture, distribute, import, or export regulated 
chemical mixtures which contain ephedrine, and/or pseudoephedrine, 
pursuant to Sections 1310.12 and 1310.13, is temporarily exempted from 
the registration requirement, provided that DEA receives a properly 
completed application for registration or application for exemption on 
or before August 24, 2007. 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, 1313, and 1315 of this chapter remain in full force 
and effect. Any person who manufactures, distributes, imports, or 
exports a chemical mixture whose application for exemption is 
subsequently denied by DEA must obtain a registration with DEA. A 
temporary exemption from the registration requirement will also be 
provided for these persons, provided that DEA receives a properly 
completed application for registration on or before 30 days following 
the date of official DEA notification that the application for 
exemption has not been approved. The temporary exemption for such 
persons will remain in effect until DEA takes final action on their 
registration application.

0
3. Section 1310.12 is amended as follows:
0
A. By revising the Table of Concentration Limits in paragraph (c) by 
revising the entries for ``Ephedrine, its salts, optical isomers, and 
salts of optical isomers'' and ``Pseudoephedrine, its salts, optical 
isomers, and salts of optical isomers''; and
0
B. By removing paragraph (d)(1) and redesignating paragraphs (d)(2) 
through (d)(5) as paragraphs (d)(1) through (d)(4) as follows:


Sec.  1310.12  Exempt chemical mixtures.

* * * * *
    (c) * * *

                                          Table of Concentration Limits
----------------------------------------------------------------------------------------------------------------
                                          DEA chemical
                                          code number     Concentration (percent)        Special conditions
----------------------------------------------------------------------------------------------------------------
                                                List I Chemicals
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
Ephedrine, its salts, optical isomers,            8113   Not exempt at any         Chemical mixtures containing
 and salts of optical isomers.                            concentration.            any amount of ephedrine and/
                                                                                    or pseudoephedrine, and
                                                                                    their salts, optical isomers
                                                                                    and salts of optical isomers
                                                                                    are not exempt due to
                                                                                    concentration, unless
                                                                                    otherwise exempted.
 
----------------------------------------------------------------------------------------------------------------
                                                  * * * * * * *
Pseudoephedrine, its salts, optical               8112   Not exempt at any         Chemical mixtures containing
 isomers, and salts of optical isomers.                   concentration.            any amount of ephedrine and/
                                                                                    or pseudoephedrine, and
                                                                                    their salts, optical isomers
                                                                                    and salts of optical isomers
                                                                                    are not exempt due to
                                                                                    concentration, unless
                                                                                    otherwise exempted.
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
                                                List II Chemicals
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------

* * * * *

    Dated: July 2, 2007.
Michele M. Leonhart,
Deputy Administrator.
 [FR Doc. E7-14295 Filed 7-24-07; 8:45 am]
BILLING CODE 4410-09-P