17778 Federal Register / Vol. 76, No. 62 / Thursday, March 31, 2011 / Rules and Regulations 

PART 522—IMPLANTATION OR 

INJECTABLE DOSAGE FORM NEW 

ANIMAL DRUGS 

■ 7. The authority citation for 21 CFR 

part 522 continues to read as follows: 

Authority: 21 U.S.C. 360b. 

§ 522.1081 [Amended] 

■ 8. In paragraph (b)(2) of § 522.1081, 

remove ‘‘Nos. 058639 and 063323’’ and 

in its place add ‘‘No. 058639’’. 

PART 524—OPHTHALMIC AND 

TOPICAL DOSAGE FORM NEW 

ANIMAL DRUGS 

■ 9. The authority citation for 21 CFR 

part 524 continues to read as follows: 

Authority: 21 U.S.C. 360b. 

§ 524.520 [Removed] 

■ 10. Remove § 524.520. 

§ 524.1580c [Amended] 

■ 11. In paragraph (b) of § 524.1580c, 

remove ‘‘Nos. 000010, 000069, and 

050749’’ and in its place add ‘‘Nos. 

000010 and 000069’’. 

PART 558—NEW ANIMAL DRUGS FOR 

USE IN ANIMAL FEEDS 

■ 12. The authority citation for 21 CFR 

part 558 continues to read as follows: 

Authority: 21 U.S.C. 360b, 371. 

§ 558.485 [Amended] 

■ 13. In § 558.485, in paragraph (b)(3), 

remove ‘‘010439’’. 

§ 558.625 [Amended] 

■ 14. In § 558.625, remove and reserve 

paragraphs (b)(42) and (b)(45). 

§ 558.630 [Amended] 

■ 15. In § 558.630, remove and reserve 

paragraph (b)(4); and in paragraph 

(b)(5), remove ‘‘010439,’’ and ‘‘016968,’’. 

Dated: March 25, 2011. 

Leslie Kux, 

Acting Assistant Commissioner for Policy. 

[FR Doc. 2011–7560 Filed 3–30–11; 8:45 am] 

BILLING CODE 4160–01–P 

DEPARTMENT OF JUSTICE 

Drug Enforcement Administration 

21 CFR Part 1310 

[Docket No. DEA–320F] 

RIN 1117–AB24 

Control of Ergocristine, a Chemical 

Precursor Used in the Illicit 

Manufacture of Lysergic Acid 

Diethylamide, as a List I Chemical 

AGENCY: Drug Enforcement 

Administration (DEA), Department of 

Justice. 

ACTION: Final rule. 

SUMMARY: This rulemaking finalizes a 

February 24, 2010, Notice of Proposed 

Rulemaking in which DEA proposed to 

control the chemical precursor 

ergocristine as a List I chemical under 

the Controlled Substances Act (CSA). 

Clandestine laboratories are using this 

chemical as a substitute for the List I 

chemicals ergotamine and ergonovine to 

illicitly manufacture the schedule I 

controlled substance lysergic acid 

diethylamide (LSD). 

This rule is being finalized as 

proposed. Therefore, handlers of 

ergocristine shall be subject to the 

chemical regulatory provisions of the 

CSA and its implementing regulations. 

This rulemaking does not establish a 

threshold for domestic and international 

transactions of ergocristine. As such, all 

transactions involving ergocristine, 

regardless of size, shall be regulated. 

This rulemaking also specifies that 

chemical mixtures containing 

ergocristine will not be exempt from 

regulatory requirements at any 

concentration. Therefore, all 

transactions of chemical mixtures 

containing any quantity of ergocristine 

shall be regulated and subject to control 

under the CSA. 

DATES: This rulemaking becomes 

effective May 2, 2011. Persons seeking 

registration must apply on or before 

May 2, 2011 to continue their business 

pending final action by DEA on their 

application. 

FOR FURTHER INFORMATION CONTACT: 

Christine A. Sannerud, PhD, Chief, Drug 

and Chemical Evaluation Section, Office 

of Diversion Control, Drug Enforcement 

Administration, 8701 Morrissette Drive, 

Springfield, VA 22152; telephone: (202) 

307–7183. 

SUPPLEMENTARY INFORMATION: 

Background 

Lysergic acid diethylamide (LSD) is a 

synthetic schedule I hallucinogen. It is 

the most potent hallucinogen known 

and only microgram amounts are 

required to produce overt 

hallucinations. It induces a heightened 

awareness of sensory input that is 

accompanied by an enhanced sense of 

clarity, but reduced ability to control 

what is experienced. 

Illicit Production of LSD 

LSD has been manufactured illegally 

since the 1960s. A limited number of 

chemists, probably less than a dozen, 

are believed to be manufacturing nearly 

all of the LSD available in the United 

States. Clandestine laboratory operators 

must adhere to precise and complex 

production procedures, and production 

of LSD is relatively difficult. 

LSD has historically been produced 

from lysergic acid, which is made from 

ergotamine or ergonovine, substances 

derived from an ergot fungus on rye, or 

from lysergic acid amide, a chemical 

found in morning glory seeds. 

Movement to Ergocristine as LSD 

Precursor and Largest LSD Laboratory 

Ever Seized by DEA 

Because of the existing CSA 

regulatory controls on the LSD 

precursors lysergic acid, lysergic acid 

amide, ergotamine, and ergonovine, 

clandestine laboratory operators have 

sought uncontrolled sources of 

precursor material for the production of 

LSD. This has led to the illicit 

utilization of the precursor chemical 

ergocristine as a direct substitute for 

ergotamine and ergonovine for the illicit 

production of LSD. In fact, the largest 

clandestine LSD laboratory ever seized 

by DEA utilized ergocristine as the LSD 

precursor. Recipes documenting 

procedures for utilizing ergocristine in 

LSD synthesis are easily found on the 

Internet. 

Availability of the Precursor Chemical 

DEA has determined that ergocristine 

is readily available from commercial 

chemical suppliers. DEA has identified 

at least three suppliers of ergocristine, of 

which one distributor is located 

domestically; the other two are based in 

Germany and the Czech Republic. 

This rule implements both domestic 

and import/export controls on 

ergocristine (and its salts). As noted in 

the February 24, 2010, Notice of 

Proposed Rulemaking (75 FR 8287), 

such controls are deemed necessary for 

law enforcement to identify domestic 

and international transactions in 

ergocristine, due to growing concerns 

regarding its use for the illicit 

manufacture of LSD. 


jdjones on DSK8KYBLC1PROD with RULES_2
Federal Register / Vol. 76, No. 62 / Thursday, March 31, 2011 / Rules and Regulations 17779 

Regulation of Ergocristine as a List I 

Chemical 

The CSA, specifically 21 U.S.C. 

802(34), and its implementing 

regulations at 21 CFR 1310.02(c), 

provide the Attorney General with the 

authority to specify, by regulation, 

additional chemicals as List I 

chemicals’’ if they are used in the 

manufacture of a controlled substance 

in violation of the CSA, and are 

important to the manufacture of the 

controlled substance. Ergocristine is 

being used in clandestine laboratories as 

the precursor material for the illicit 

manufacture of the schedule I controlled 

substance LSD. This rule implements 

the regulation of ergocristine as a List I 

chemical because DEA finds that it is 

used in the illicit manufacture of the 

controlled substance LSD and is 

important to the illicit manufacture of 

the controlled substance LSD. 

Handlers of ergocristine shall be 

subject to the chemical regulatory 

provisions of the CSA, including 21 CFR 

parts 1309, 1310, 1313, and 1316. This 

rulemaking does not establish a 

threshold for domestic and import 

transactions of ergocristine pursuant to 

the provisions of 21 CFR 1310.04(g). 

Due to the high potency of LSD, even a 

single gram (i.e., 1/28th of an ounce) of 

ergocristine can be used illicitly to make 

thousands of dosage units of LSD. 

Therefore, all ergocristine transactions, 

regardless of size, shall be regulated 

transactions as defined in 21 CFR 

1300.02(b)(28). As such, all ergocristine 

transactions will be subject to 

recordkeeping, annual manufacturer 

reporting of inventory and use data, 

import/export controls, and other CSA 

chemical regulatory requirements. 

Comments 

DEA did not receive any comments in 

response to the February 24, 2010, 

Notice of Proposed Rulemaking 

(NPRM), which proposed the control of 

ergocristine. Therefore, this rule 

finalizes the NPRM, as proposed. 

As such, effective May 2, 2011, 

handlers of ergocristine shall be subject 

to the chemical regulatory provisions of 

the CSA and its implementing 

regulations, including 21 CFR parts 

1309, 1310, 1313, and 1316. 

Chemical Mixtures Containing 

Ergocristine 

Chemical mixtures containing 

ergocristine will not be exempt from 

regulatory requirements at any 

concentration, unless an application for 

exemption of a chemical mixture is 

submitted by an ergocristine 

manufacturer and the application is 

reviewed and accepted by DEA under 

21 CFR 1310.13 (Exemption by 

Application Process). Since even a small 

amount of ergocristine is able to be used 

in the illicit manufacture of a significant 

amount of LSD, the control of chemical 

mixtures containing any amount of 

ergocristine is necessary to prevent the 

illicit extraction, isolation, and use of 

the ergocristine. Therefore, all chemical 

mixtures containing any quantity of 

ergocristine will be subject to CSA 

control, unless the ergocristine 

manufacturer is granted an exemption 

by the application process discussed 

below. The Table of Concentration 

Limits in 21 CFR 1310.12(c) is hereby 

modified to reflect the fact that chemical 

mixtures containing any amount of 

ergocristine are subject to CSA chemical 

control provisions. 

Exemption by Application Process 

DEA has implemented an application 

process to exempt chemical mixtures 

from the requirements of the CSA and 

its implementing regulations (21 CFR 

1310.13). Under the application process, 

manufacturers may submit an 

application for exemption for those 

mixtures that do not qualify for 

automatic exemption. Exemption status 

can be granted if DEA determines that 

the mixture is formulated in such a way 

that it cannot be easily used in the illicit 

production of a controlled substance 

and that the listed chemical cannot be 

readily recovered (i.e., it meets the 

conditions in 21 U.S.C. 802(39)(A)(vi)). 

Requirements for Handling List I 

Chemicals 

The designation of ergocristine as a 

List I chemical subjects ergocristine 

handlers to all of the regulatory controls 

and administrative, civil, and criminal 

sanctions applicable to the manufacture, 

distribution, importing, and exporting of 

a List I chemical. Persons potentially 

handling ergocristine, including 

regulated chemical mixtures containing 

ergocristine, will be required to comply 

with the following List I chemical 

regulations: 

Registration. Any person who 

manufactures, distributes, imports, or 

exports a List I chemical, or proposes to 

engage in the manufacture, distribution, 

importation, or exportation of a List I 

chemical, must obtain a registration 

pursuant to the CSA (21 U.S.C. 822, 

957). Regulations describing registration 

for List I chemical handlers are set forth 

in 21 CFR part 1309. Consistent with 21 

CFR parts 1309 and 1310, separate 

registrations will be required for 

manufacturing, distribution, importing, 

and exporting of ergocristine. Different 

locations operated by a single entity 

require separate registration if any 

location is involved with the 

manufacture, distribution, importation, 

or exportation of ergocristine. Further, 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). Any person 

manufacturing, distributing, importing, 

or exporting an ergocristine chemical 

mixture will be subject to the 

registration requirement under the CSA 

as well. 

DEA notes that warehouses are 

exempt from the requirement of 

registration and may lawfully possess 

List I chemicals, if the possession of 

those chemicals is in the usual course 

of business (21 U.S.C. 822(c)(2), 21 

U.S.C. 957(b)(1)(B)). For purposes of this 

exemption, the warehouse must receive 

the List I chemical from a DEA 

registrant and shall only distribute the 

List I chemical back to the DEA 

registrant and registered location from 

which it was received. All other 

activities conducted by a warehouse do 

not fall under this exemption; a 

warehouse that distributes List I 

chemicals to persons other than the 

registrant and registered location from 

which they were obtained is conducting 

distribution activities and is required to 

register as such (21 CFR 1309.23(b)(1)). 

Any person manufacturing, 

distributing, importing, or exporting 

ergocristine or a chemical mixture 

containing ergocristine will be 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, to allow 

continued legitimate commerce in 

ergocristine, DEA is establishing in 

21 CFR 1310.09, a temporary exemption 

from the registration requirement for 

persons desiring to engage in activities 

with ergocristine, provided that DEA 

receives a properly completed 

application for registration on or before 

May 2, 2011. The temporary exemption 

for such persons will remain in effect 

until DEA takes final action on their 

application for registration or 

application for exemption of a chemical 

mixture. 

The temporary exemption applies 

solely to the registration requirement; 

all other chemical control requirements, 

including recordkeeping and reporting, 

would become effective May 2, 2011. 

Therefore, all transactions of 

ergocristine and chemical mixtures 


jdjones on DSK8KYBLC1PROD with RULES_2
17780 Federal Register / Vol. 76, No. 62 / Thursday, March 31, 2011 / Rules and Regulations 

containing ergocristine will be regulated 

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 

ergocristine, nor does it supersede State 

or local laws or regulations. All 

handlers of ergocristine 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 that certain 

records be kept and reports be made 

with respect to listed chemicals. 

Regulations describing recordkeeping 

and reporting requirements are set forth 

in 21 CFR part 1310. Pursuant to 21 CFR 

1310.04, a record must be made and 

maintained for two years after the date 

of a transaction involving a listed 

chemical, provided the transaction is a 

regulated transaction. 

Each regulated bulk manufacturer of a 

listed chemical will be required to 

submit manufacturing, inventory, and 

use data on an annual basis (21 CFR 

1310.05(d)). Existing standard industry 

reports containing the required 

information will be acceptable, 

provided the information is readily 

retrievable from the report. 

Title 21 CFR 1310.05(a) requires that 

each regulated person shall report to 

DEA any regulated transaction involving 

an extraordinary quantity of a listed 

chemical, an uncommon method of 

payment or delivery, or any other 

circumstance that the regulated person 

believes may indicate that the listed 

chemical will be used in violation of the 

CSA and its corresponding regulations. 

Persons are also required to report any 

proposed regulated transaction with a 

person whose description or other 

identifying characteristics the 

Administration has previously 

furnished to the regulated person; any 

unusual or excessive loss or 

disappearance of a listed chemical 

under the control of the regulated 

person; any in-transit loss in which the 

regulated person is the supplier; and 

any domestic regulated transaction in a 

tableting or encapsulating machine. 

Import/Export. All imports, exports, 

and international transactions of a listed 

chemical shall comply with the CSA 

import and export provisions including 

21 U.S.C. 957 and 971. Regulations for 

importation and exportation of List I 

chemicals are described in 21 CFR part 

1313. 

Security. All applicants and 

registrants shall provide effective 

controls against theft and diversion of 

chemicals as described in 21 CFR 

1309.71. 

Administrative Inspection. Places, 

including factories, warehouses, or 

other establishments and conveyances, 

where registrants or other regulated 

persons may lawfully hold, 

manufacture, distribute, dispense, 

administer, or otherwise dispose of a 

regulated chemical/chemical mixture or 

where records relating to those activities 

are kept or required to be kept, 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 

Regulatory Flexibility Act and Small 

Business Concerns 

The Administrator hereby certifies 

that this rulemaking has been drafted in 

accordance with the Regulatory 

Flexibility Act (5 U.S.C. 601–612). DEA 

has been able to identify only one U.S. 

distributor that lists ergocristine among 

its products. Because most of the firm’s 

product source appears to be located 

outside the U.S. and because DEA has 

not been able to identify any U.S. 

manufacturer that produces a product 

containing ergocristine, DEA does not 

consider it likely that this domestic 

distributor would be subject to the rule, 

unless they imported ergocristine. The 

only probable legitimate commerce in 

this chemical appears to be the use of 

ergocristine as precursor material for the 

synthesis of a research compound. If 

used for this purpose, then there would 

be a registration and recordkeeping 

requirement for this distributor to 

import the ergocristine. Such use would 

likely be extremely limited. Therefore, 

the Administrator certifies that this rule 

will not have a significant economic 

impact on a substantial number of small 

entities. 

Executive Order 12866 

The Administrator certifies that this 

rulemaking has been drafted in 

accordance with the principles in 

Executive Order 12866 Section 1(b). It 

has been determined that this is ‘‘a 

significant regulatory action.’’ Therefore, 

this action has been reviewed by the 

Office of Management and Budget. DEA 

has not conducted an economic analysis 

of the final rule because DEA has been 

able to identify only one company with 

a U.S. address that lists ergocristine 

among its products. DEA was able to 

identify only two foreign firms that list 

ergocristine as a product. These firms 

appear to sell ergocristine as an active 

pharmaceutical ingredient, but a search 

of the Food and Drug Administration’s 

database of approved drugs did not 

identify any drug with ergocristine as an 

active ingredient. Consequently, DEA 

does not believe that at this time any 

firm conducting legitimate business is 

likely to have to comply with the rule. 

Executive Order 12988 

This regulation meets the applicable 

standards set forth in Sections 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 $126,400,000 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 

Congressional Review Act/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 cost 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 1310 

Drug traffic control, Exports, Imports, 

Reporting and recordkeeping 

requirements. 

For the reasons set out above, 21 CFR 

part 1310 is amended as follows: 


jdjones on DSK8KYBLC1PROD with RULES_2
Federal Register / Vol. 76, No. 62 / Thursday, March 31, 2011 / Rules and Regulations 17781 

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 1310.02 is amended by 

adding a new paragraph (a)(30) to read 

as follows: 

§ 1310.02 Substances covered. 

* * * * * 

(a) * * * 

(30) Ergocristine and its salts 8612 

* * * * * 

■ 3. Section 1310.04 is amended by 

redesignating paragraphs (g)(1)(ii) 

through (g)(1)(ix) as paragraphs 

(g)(1)(iii) through (g)(1)(x), and adding a 

new paragraph (g)(1)(ii) to read as 

follows: 

§ 1310.04 Maintenance of records. 

* * * * * 

(g) * * * 

(1) * * * 

(iii) Ergocristine and its salts 

* * * * * 

■ 4. Section 1310.09 is amended by 

adding new paragraph (l) to read as 

follows: 

§ 1310.09 Temporary exemption from 

registration. 

* * * * * 

(l)(1) Each person required under 

sections 302 and 1007 of the Act 

(21 U.S.C. 822, 957) to obtain a 

registration to manufacture, distribute, 

import, or export regulated ergocristine 

and its salts, including regulated 

chemical mixtures pursuant to 

§ 1310.12, is temporarily exempted from 

the registration requirement, provided 

that DEA receives a properly completed 

application for registration or 

application for exemption for a 

chemical mixture containing 

ergocristine and its salts pursuant to 

§ 1310.13 on or before May 2, 2011. 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 the Act and parts 1309, 

1310, 1313, and 1316 of this chapter 

remain in full force and effect. 

(2) Any person who manufactures, 

distributes, imports, or exports a 

chemical mixture containing 

ergocristine and its salts 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 those persons whose 

applications for exemption are denied, 

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 been 

denied. The temporary exemption for 

such persons will remain in effect until 

DEA takes final action on their 

registration application. 

■ 5. Section 1310.12 is amended by 

adding in alphabetical order an entry 

‘‘Ergocristine and its salts’’ in the table 

‘‘Table of Concentration Limits’’ to read 

as follows: 

§ 1310.12 Exempt chemical mixtures. 

* * * * * 

(c) * * * 

TABLE OF CONCENTRATION LIMITS

DEA chemical 

code No. Concentration Special conditions 

List I Chemicals 

* * * * * * * 

Ergocristine and its salts ........ 8612 Not exempt at any concentration.Chemical mixtures containing any amount of ergocristine 

and its salts are not exempt. 

* * * * * * * 

* * * * * 

Dated: March 21, 2011. 

Michele M. Leonhart, 

Administrator. 

[FR Doc. 2011–7548 Filed 3–30–11; 8:45 am] 

BILLING CODE 4410–09–P 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

26 CFR Part 1 

[TD 9515] 

RIN 1545–BH20 

Guidance Under Section 1502; 

Amendment of Matching Rule for 

Certain Gains on Member Stock; 

Correction 

AGENCY: Internal Revenue Service (IRS), 

Treasury. 

ACTION: Correcting amendment. 

SUMMARY: This document describes 

correcting amends to final and 

temporary regulations concerning the 

treatment of certain intercompany gain 

with respect to stock owned by 

members of a consolidated group. These 

regulations provide for the 

redetermination of intercompany gain as 

excluded from gross income in certain 

transactions involving stock transfers 

between members of a consolidated 

group. These errors were made when 

the agency published final and 

temporary regulations (TD 9515) in the 

Federal Register on Friday, March 4, 

2011 (76 FR 11956). 

DATES: This correction is effective on 

March 31, 2011, and is applicable on 

March 4, 2011. 

FOR FURTHER INFORMATION CONTACT: John 

F. Tarrant, (202) 622–7790 or Lawrence 

M. Axelrod, (202) 622–7713 (not tollfree numbers). 

SUPPLEMENTARY INFORMATION: 

Background 

The final and temporary regulations 

(TD 9515) that are the subject of this 

document are under section 1502 of the 

Internal Revenue Code. 

Need for Correction 

As published, the final and temporary 

regulations (TD 9515) contain errors that 

may prove to be misleading and are in 

need of clarification. 

List of Subjects in 26 CFR Part 1 

Income taxes, Reporting and 

recordkeeping requirements. 

Correction of Publication 

Accordingly, 26 CFR part 1 is 

corrected by making the following 

correcting amendments: 


jdjones on DSK8KYBLC1PROD with RULES_2