Record Requirements for Chemical Distributors, 53973-53977 [E7-18530]

Agencies

• Drug Enforcement Administration
• Department of Justice

[Federal Register Volume 72, Number 183 (Friday, September 21, 2007)]
[Proposed Rules]
[Pages 53973-53977]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-18530]


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DEPARTMENT OF JUSTICE

Drug Enforcement Administration

21 CFR Part 1310

[Docket No. DEA-302P]
RIN 1117-AB14


Record Requirements for Chemical Distributors

AGENCY: Drug Enforcement Administration (DEA), Justice.

ACTION: Notice of Proposed Rulemaking (NPRM).

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SUMMARY: In March 2006, Congress enacted the Combat Methamphetamine 
Epidemic Act of 2005, which mandates

[[Page 53974]]

that regulated sellers of scheduled listed chemical products self-
certify with DEA before they are allowed to sell these products at 
retail. DEA is proposing to revise its recordkeeping requirements to 
include a requirement that manufacturers, distributors, and importers 
obtain and maintain the certification number issued by DEA to regulated 
sellers in their records of sales. This change will ensure that 
registrants verify that the regulated sellers to whom they distribute 
have successfully completed the mandatory self-certification process 
imposed by the CMEA for sales of scheduled listed chemical products.

DATES: Written comments must be postmarked, and electronic comments 
must be sent, on or before November 20, 2007.

ADDRESSES: To ensure proper handling of comments, please reference 
``Docket No. DEA-302'' on all written and electronic correspondence. 
Written comments being sent via regular mail should be sent to the 
Deputy Assistant 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 directly 
sent 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 and in the Drug 
Enforcement Administration's public docket. Such information includes 
personal identifying information (such as your 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 or made available in the public docket, 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 or made available 
in the public docket in the first paragraph of your comment and 
identify what 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 or made available 
in the public docket, 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 online or made available in the 
public docket.
    Personal identifying information and confidential business 
information identified and located as set forth above will be redacted 
and posted online and placed in the Drug Enforcement Administration's 
public docket file. If you wish to inspect the agency's public docket 
file in person by appointment, please see the FOR FURTHER INFORMATION 
CONTACT paragraph.

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: 

DEA's Legal Authority

    DEA implements the Comprehensive Drug Abuse Prevention and Control 
Act of 1970, often referred to as the Controlled Substances Act (CSA) 
and the Controlled Substances Import and Export Act (21 U.S.C. 801-
971), as amended. DEA publishes the implementing regulations for these 
statutes in Title 21 of the Code of Federal Regulations (CFR), parts 
1300 to 1399. These regulations are designed to ensure that there is a 
sufficient supply of controlled substances for medical, scientific, and 
other legitimate purposes and to deter the diversion of controlled 
substances to illegal purposes. The CSA mandates that DEA establish a 
closed system of control for manufacturing, distributing, and 
dispensing controlled substances. Any person who manufactures, 
distributes, dispenses, imports, exports, or conducts research or 
chemical analysis with controlled substances must register with DEA 
(unless exempt) and comply with the applicable requirements for the 
activity. The CSA as amended also requires DEA to regulate the 
manufacture, distribution, retail sale, import, and export of chemicals 
that may be used to manufacture controlled substances illegally. Listed 
chemicals that are classified as List I chemicals are important to the 
manufacture of controlled substances. Those classified as List II 
chemicals may be used to manufacture controlled substances.
    On March 9, 2006, the President signed the Combat Methamphetamine 
Epidemic Act of 2005 (CMEA), which is Title VII of the USA PATRIOT 
Improvement and Reauthorization Act of 2005 (Pub. L. 109-177). CMEA 
amends the CSA by adding new provisions related to the importation, 
production, and sale of ephedrine, pseudoephedrine, and 
phenylpropanolamine, their salts, optical isomers, and salts of optical 
isomers, and products that contain any of the three chemicals. Products 
that contain any of the three chemicals and which may be marketed or 
distributed lawfully in the United States under the Federal Food, Drug, 
and Cosmetic Act as a nonprescription drug (an ``over-the-counter'' 
drug) are defined as scheduled listed chemical products (21 U.S.C. 
802(45)). Ephedrine, pseudoephedrine, and phenylpropanolamine are List 
I chemicals because they are used in, and important to, the illegal 
manufacture of methamphetamine, a Schedule II controlled substance. 
Products containing these List I chemicals also have legitimate medical 
uses. Ephedrine is used in some products for treating asthma. 
Pseudoephedrine, a decongestant, is a common ingredient in cold and 
allergy medications. In November 2000, the Food and Drug Administration 
(FDA) issued a public health advisory concerning phenylpropanolamine 
and requested that all drug companies discontinue marketing products 
containing phenylpropanolamine due to risk of hemorrhagic stroke. In 
response, many companies voluntarily reformulated their products to 
exclude phenylpropanolamine. Subsequently, on December 22, 2005, FDA 
published a Notice of Proposed Rulemaking (70 FR 75988) proposing to 
categorize all over-the-counter nasal decongestants and weight control 
drug products containing phenylpropanolamine preparations as Category 
II, nonmonograph, i.e., not generally recognized as being safe for 
human consumption. Most products containing phenylpropanolamine 
intended for humans have been

[[Page 53975]]

withdrawn from the market, but phenylpropanolamine is still sold by 
prescription for veterinary uses.

CMEA Requirements

    CMEA regulates the sale of scheduled listed chemical products at 
retail, including the sale of those products by regulated sellers. CMEA 
defines regulated seller to mean a retail distributor (including a 
pharmacy or a mobile retail vendor) (21 U.S.C. 802(46)). Retail 
distributor means a grocery store, general merchandise store, drug 
store, or other entity or person whose activities as a distributor 
relating to drug products containing pseudoephedrine or 
phenylpropanolamine are limited almost exclusively to sales for 
personal use, both in number of sales and volume of sales, either 
directly to walk-in customers or in face-to-face transactions by direct 
sales (21 U.S.C. 802(49)). Mobile retail vendor means a person or 
entity that makes sales at retail from a stand that is intended to be 
temporary, or is capable of being moved from one location to another, 
whether the stand is located within or on the premises of a fixed 
facility (such as a kiosk at a shopping center or an airport) or 
whether the stand is located on unimproved real estate (such as a lot 
or field leased for retail purposes) (21 U.S.C. 802(47)). [Note that 
mail order distributors are not regulated sellers.]
    As of September 30, 2006, regulated sellers that wish to sell 
scheduled listed chemical products at retail must comply with the 
requirements in CMEA for product placement and packaging, 
recordkeeping, sales limits, and employee training and must self-
certify to DEA that they are in compliance prior to selling the 
products. When a regulated seller self-certifies, DEA issues a self-
certification certificate (DEA Form 598) which includes a certification 
number. The expiration date of the self-certification is printed on the 
self-certification certificate. Self-certifications must be renewed 
annually if the regulated seller continues to sell scheduled listed 
chemical products. Regulated sellers are not required to register with 
DEA although many regulated sellers may be DEA registrants because they 
also handle controlled substances. Note that self-certification is 
independent of DEA registration; the fact that an entity is a DEA 
registrant does not negate the requirement that the entity self-certify 
with DEA and receive a self-certification certificate.

Proposed Rule

    DEA is proposing to revise 21 CFR 1310.06(a) to require that those 
DEA registrants who distribute scheduled listed chemical products to 
regulated sellers verify that the regulated seller to whom they are 
distributing the products has certified to DEA that the regulated 
seller is in compliance with the requirements for retail sales of 
scheduled listed chemical products. The registrant who distributes the 
products must also maintain the certification number as part of the 
sales record. This proposal is consistent with the current rule, which 
requires registrants to ensure that their customers are eligible to 
purchase listed chemicals and to record their DEA numbers, where 
applicable. Collecting DEA and certification numbers assists 
registrants to know their customers and to be certain that the 
customers are purchasing the products for legitimate purposes.
    This requirement will primarily affect distributors, although some 
manufacturers and importers may sell directly to regulated sellers. 
Under current Sec.  1310.06, registrants are required to include the 
following in their sales records:
     The name, address, and if applicable, the DEA number of 
each party to the transaction.
     The date of the transaction.
     The name, quantity, and form of packaging of the listed 
chemical.
     The method of transfer.
     The type of identification used by the purchaser and any 
unique number on that identification.

DEA is proposing to add the certification number of the purchaser to 
the list of information that must be maintained in sales records. 
Normal business records can be used to meet this requirement if they 
include the required information. Because mail order distributors are 
not subject to self-certification, DEA is not requiring registrants to 
collect any additional information from these firms. Under the existing 
rule, if the mail order distributor is a DEA registrant, the DEA number 
must be collected as part of the sales record.

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. 601-612). The Regulatory Flexibility Act 
requires agencies to determine whether proposed rules would have a 
significant economic impact on a substantial number of small entities. 
DEA expects that some of the distributors subject to this rule will be 
small entities. The burden associated with the rule, however, is de 
minimis. Registrants will simply have to ask their purchasers for their 
DEA certification number and keep that number in their records. For 
firms that receive orders electronically and maintain electronic 
records, as many do, the certification number can simply be added to 
the customer's master record that is associated with individual orders. 
If the same customer orders multiple times during a year, the 
information could be collected only once a year because certifications 
will generally be valid for a year; initial certifications may have 
longer validity periods. Because the time required to collect the 
information and maintain the record is minimal, the Deputy Assistant 
Administrator has determined that this action does not require a 
regulatory flexibility analysis.

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). It has been determined that this 
rulemaking is a significant regulatory action and, therefore, has been 
reviewed by the Office of Management and Budget.

Paperwork Reduction Act

    The Paperwork Reduction Act requires agencies to estimate the 
burden imposed by recordkeeping and reporting. The records required 
under this proposed rule are standard business records. While many DEA-
registered distributors may maintain the self-certification number of 
regulated sellers which purchase scheduled listed chemical products 
from them, some may not. DEA believes that the additional information 
that registrants would be required to collect once a year imposes a 
minimal burden that can be met by simply adding the item to the order 
form. DEA invites comment regarding whether the inclusion in 
distributors' records of the self-certification numbers of regulated 
sellers purchasing scheduled listed chemical products imposes a burden 
which should be quantified.
    The Department of Justice, Drug Enforcement Administration, has 
submitted the following information collection request to the Office of 
Management and Budget (OMB) 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.

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    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.
    Written comments and suggestions from the public and affected 
agencies concerning the proposed collection of information are 
encouraged. Your comments regarding the information-collection aspects 
of this rule 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: New collection.
    (2) Title of the Form/Collection: [Insert title same as above and 
on OMB 83-I].
    (3) Agency form number, if any, and the applicable component of the 
Department of Justice sponsoring the collection:
    Form Number: None.

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, United States Code, Section 830, and Title 21, 
Code of Federal Regulations, part 1314 require that any person who is a 
regulated seller of scheduled listed chemical products to self-certify 
to DEA that it has trained its staff in the requirements for selling 
scheduled listed chemical products and is in compliance with DEA 
regulations. To ensure that persons distributing scheduled listed 
chemical products sell only to regulated sellers who are eligible to 
sell them, DEA is requiring distributors to collect and retain the 
certification number DEA issues to regulated sellers when they self-
certify.
    (5) An estimate of the total number of respondents and the amount 
of time estimated for an average respondent to respond:
    DEA estimates that 38,926 persons will respond to this collection 
annually, with each response taking an estimated 2 minutes. DEA 
estimated the number of responses as follows.

    As of August 6, 2007, 75,721 regulated sellers had self-
certified to DEA. Of those, 39,917 certifications were filed by 103 
chains. There were, therefore, 36,804 regulated sellers who filed as 
individual regulated sellers. For regulated sellers that belonged to 
chains that filed certifications for their stores, DEA assumed that 
the chain held the master list and would provide the self-
certification numbers of each self-certified location to 
distributors from whom the chain orders scheduled listed chemical 
products. Thirty of the self-certified chains are also registered as 
chemical or controlled substance distributors; these chains, 
therefore, do not need to take any additional action to provide 
information to the distributor. The number of regulated sellers who 
would need to provide the self-certification number to a distributor 
is the 36,804 individual regulated sellers plus the 73 chains that 
do not serve as their owner distributors. In addition, DEA assumes 
that 2,049 controlled substance and chemical distributors would have 
to collect the information. This estimate is conservative because 
not all of these distributors handle scheduled listed chemical 
products.

    (6) An estimate of the total public burden (in hours) associated 
with the collection: DEA estimates that this collection will take 1,298 
hours annually.
    If additional information is required contact: Lynn Bryant, 
Department Clearance Officer, Information Management and Security 
Staff, Justice Management Division, Department of Justice, Patrick 
Henry Building, Suite 1600, 601 D Street, NW., Washington, DC 20530.

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 
$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.

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, Reporting and recordkeeping 
requirements.

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

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

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

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

    2. Section 1310.06 is proposed to be amended by revising paragraph 
(a) introductory text and by adding (a)(6) to read as follows:


Sec.  1310.06  Content of records and reports.

    (a) Each record required by Sec.  1310.03 shall include all of the 
following:
* * * * *
    (6) For distributions of scheduled listed chemical products to 
regulated sellers, the regulated seller's (i.e., the purchaser's) DEA 
certification number issued in accordance with section 1314.40(b) of 
this chapter.
* * * * *


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    Dated: September 12, 2007.
Joseph T. Rannazzisi,
Deputy Assistant Administrator, Office of Diversion Control.
[FR Doc. E7-18530 Filed 9-20-07; 8:45 am]
BILLING CODE 4410-09-P