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[Federal Register: March 5, 2010 (Volume 75, Number 43)]
[Rules and Regulations]               
[Page 10168-10172]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr05mr10-2]                         

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DEPARTMENT OF JUSTICE

Drug Enforcement Administration

21 CFR Part 1313

[Docket No. DEA-295F]
RIN 1117-AB07

 
Information on Foreign Chain of Distribution for Ephedrine, 
Pseudoephedrine, and Phenylpropanolamine

AGENCY: Drug Enforcement Administration (DEA), Justice.

ACTION: Final rule.

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SUMMARY: The Drug Enforcement Administration (DEA) is finalizing, 
without change, the Notice of Proposed Rulemaking published in the 
Federal Register on March 31, 2008 (73 FR 16793). The Combat 
Methamphetamine Epidemic Act of 2005 (CMEA) requires DEA to collect 
from importers of ephedrine, pseudoephedrine, and phenylpropanolamine 
all information known to the importer on the foreign chain of 
distribution of the chemical from the manufacturer to the importer. 
This rule amends DEA regulations to incorporate the requirement for 
this information.

DATES: Effective Dates: This Final Rule is effective May 4, 2010.

FOR FURTHER INFORMATION CONTACT: Mark W. Caverly, Chief, Liaison and 
Policy Section, Office of Diversion Control, Drug Enforcement 
Administration, 8701 Morrissette Drive, Springfield, VA 22152, 
Telephone (202) 307-7297.

SUPPLEMENTARY INFORMATION:

Background and 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 (CSIEA) (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 legitimate medical, 
scientific, research, and industrial 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, 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). The 
changes made by this rule are needed to implement the statutory 
provisions. This Final Rule amends the language of the regulations to 
be consistent with that of the statute.

Import/Export Declaration Requirements

    Under existing DEA regulations (21 CFR part 1313), importers of 
listed chemicals are required to provide DEA with advance notification 
of imports unless the importer has met the requirements as a regular 
importer of the listed chemical; for regular importers, the 
notification must be filed by the date of importation. In the 
importation declaration (DEA Form 486), the importer must provide 
information on the chemical (name, size and weight of the container, 
number of containers, total weight of chemical), importation (date, 
foreign port of shipment, United States port of entry) and the foreign 
supplier (name, address, contact information).
    CMEA imposes several new requirements on imports of listed 
chemicals. CMEA amended 21 U.S.C. 971, ``Notification, suspension of 
shipment, and penalties with respect to importation and exportation of 
listed chemicals,'' to require DEA to collect information regarding 
persons to whom the U.S. importer, exporter, broker, or trader 
transfers the listed chemical, actual quantities shipped, and the date 
the shipment occurred. If the person to whom the listed chemical is to 
be transferred is not a regular customer of the U.S. importer or 
exporter, then the importer or exporter must notify DEA no later than 
15 days before the transaction is to take place. Further, if the person 
to whom the chemical is to be transferred changes subsequent to initial 
notification of DEA, or if the amount of the chemical to be transferred 
increases, the importer or exporter shall

[[Page 10169]]

update the notice to DEA to identify the most recent prospective 
transferee or the most recent quantity or both (as the case may be) and 
may not transfer the listed chemical until after the expiration of the 
15-day period beginning on the date on which the update is submitted to 
DEA, except that such 15-day restriction does not apply if the 
prospective transferee identified in the update is a regular customer. 
These changes apply to all listed chemicals. On April 9, 2007, DEA 
published an Interim Final Rule with Request for Comment codifying 
these provisions (72 FR 17401). Subsequently, due to requests from the 
regulated industry, DEA temporarily stayed certain provisions of that 
rule (72 FR 28601, May 22, 2007). That Interim Final Rule became 
effective June 8, 2007.

Imports of Ephedrine, Pseudoephedrine, and Phenylpropanolamine

    CMEA added a new paragraph (h) to 21 U.S.C. 971 that applies 
specifically to the importation of ephedrine, pseudoephedrine, and 
phenylpropanolamine. In paragraph (h)(1), the Act states that the 
import declaration ``shall include all information known to the 
importer on the chain of distribution of such chemical from the 
manufacturer to the importer.'' Paragraphs 971(h)(2) and (h)(3) state 
that the Attorney General may ask foreign manufacturers and 
distributors to provide information known to them on distribution of 
the chemical, including sales. If the foreign manufacturer or 
distributor refuses to cooperate, the Attorney General may issue an 
order prohibiting the importation of the three chemicals if the foreign 
manufacturer or distributor is part of the chain of distribution. Not 
later than 60 days prior to issuing the order, the Attorney General 
must publish in the Federal Register a notice of intent to issue the 
order. Imports handled by the foreign distributor may not be restricted 
during the 60-day period. In the Conference Report (H.R. 109-333), 
Congress stated that the ``provision will assist U.S. law enforcement 
agencies to better track where meth precursors come from, and how they 
get to the U.S. At present, very little information exists about the 
international `chain of distribution' for these chemicals, hindering 
effective controls.''
    In its Notice of Proposed Rulemaking proposing implementation of 
the provisions of 21 U.S.C. 971(h) (73 FR 16793, March 31, 2008), DEA 
proposed to add a new paragraph (d) to 21 CFR 1313.13, Contents of 
import declaration, to state that importers of ephedrine, 
pseudoephedrine, and phenylpropanolamine must provide information known 
to them on the chain of distribution from the manufacturer to the 
importer. DEA also proposed to add a new 21 CFR 1313.42 to cover the 
provisions of paragraphs (h)(2) and (h)(3) on orders to prohibit 
imports from foreign manufacturers and distributors who refuse to 
cooperate with requests for information.

Revision of DEA Form 486: Import/Export Declaration for List I and List 
II Chemicals

    To comply with the changes made to the CSA by CMEA, DEA proposed to 
establish a new DEA Form 486A to be used by persons importing 
ephedrine, pseudoephedrine, or phenylpropanolamine, or drug products 
containing ephedrine, pseudoephedrine, or phenylpropanolamine. This new 
form responds to the requirement regarding the foreign chain of 
distribution discussed above, as well as to requirements implemented 
regarding import quotas for ephedrine, pseudoephedrine, and 
phenylpropanolamine. 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; 73 FR 73549, December 3, 2008), DEA 
implemented the import quota provisions of CMEA. Importers of 
ephedrine, pseudoephedrine, and phenylpropanolamine will be required to 
provide information about their individual import quota on the DEA Form 
486A so that DEA may determine whether the importer has enough quota 
remaining to import the quantity requested.
    Thus, in addition to the fields currently present on the DEA Form 
486, the DEA Form 486A was proposed to contain the following fields:
     Name and address of foreign distributor (if applicable).
     Import quota, including: quota for current year; quota 
used to date for current year; and, amount of quota remaining.

Comments Received

    DEA received two comments in response to the Notice of Proposed 
Rulemaking. Commenters included one member of the public who indicated 
he was a health care provider and one chemical manufacturer. The 
commenters generally supported the rulemaking, but had a variety of 
comments regarding certain aspects of the proposed rule. The comments, 
and DEA's responses, are discussed below.
    Safety of medication manufactured overseas: One commenter stated 
that he supported the rule because he believed that improving drug 
safety can save lives. The commenter also asserted that ``this rule has 
the potential to improve safety of the industry even further by putting 
the burden of finding the foreign chain of distribution on the 
importer.'' The commenter emphasized his concern with the safety of 
medications manufactured in foreign countries and asserted that the 
Food and Drug Administration (FDA) does not have adequate resources to 
regulate overseas manufacturing facilities, and believed this rule 
could be beneficial in that regard. The commenter believed that the 
reporting of information about where a drug comes from is of interest 
not only to the importer, but to all parties concerned, including 
practitioners who prescribe those medications to their patients. The 
commenter believed that it is useful to know that medications came from 
``trustworthy'' facilities, and that such a requirement would be a 
``small price to pay'' for protecting lives.
    DEA Response: DEA appreciates the commenter's support. Regarding 
the safety of medications manufactured in foreign countries, DEA does 
not have jurisdiction regarding foreign manufacture of ephedrine, 
pseudoephedrine, phenylpropanolamine, or drug products containing those 
three List I chemicals. DEA also emphasizes that information regarding 
the foreign chain of distribution will be made known by the importer to 
DEA, but that information will not be made known to the general public.
    Distributions to countries other than the United States: The second 
commenter, a chemical manufacturer, asked whether it was DEA's intent 
to collect information about the foreign manufacturer's use of 
distribution centers for shipments to any destination in the world, or 
only collect information on the use of distributors for shipment to the 
United States.
    DEA Response: DEA is only requiring collection of the information 
on the use of distributors for shipment to the U.S. The CSA and its 
implementing regulations address importation of listed chemicals only 
in regard to the United States, not in regard to foreign countries (21 
U.S.C. 951(a)(1)). Thus, any requirements DEA imposes regarding 
importation of listed chemicals relate to the U.S.
    Source of distribution data: The second commenter also asked DEA to 
clarify in the Final Rule the information required to be included on 
the DEA Form 486, stating: ``* * * if distribution

[[Page 10170]]

data is obtained from a central location should the importer include 
that information in the existing foreign consignor field (field 2b), or 
does the manufacturing site information from which the direct export 
occurs suffice if DEA could obtain distribution data from the contact 
information being provided in a timely manner?''
    DEA Response: If a foreign exporter exports a listed chemical from 
a particular location to the U.S., but the information regarding all 
exports from the foreign country to the U.S. is aggregated at a central 
location, the U.S. importer should provide information on the DEA Form 
486 regarding the actual export location, not the location at which the 
information is aggregated. DEA emphasizes that this requirement is not 
a change from existing requirements or policies.
    Quota information on Import Declarations: The commenter also 
requested that DEA delay implementation of the requirements regarding 
foreign chain of distribution until calendar year 2009. The commenter 
believed this would be beneficial to the regulated industry as that 
industry had already made significant changes to its processes to 
comply with other requirements of CMEA. The commenter believed that 
delaying the effective date of the rule until calendar year 2009 would 
ensure that both importers and DEA have established timely quota 
processes that will not interfere with compliance to the proposed rule.
    DEA Response: DEA acknowledges that the regulated industry has 
worked to adapt its business process to the statutory requirements 
imposed by CMEA. The information sought by the new DEA Form 486A 
regarding foreign chain of distribution should not pose a significant 
additional burden to importer registrants. Further, the information 
required pertaining to import quotas is necessary to fully implement 
the quota provisions of CMEA and should already be maintained by 
importers. However, to ensure that industry has adequate time in which 
to begin to use the new form, DEA is making this rule effective May 4, 
2010. DEA believes industry will have adequate time to begin to submit 
the DEA Form 486A based on this effective date.

Implementation of This Rule

    Thus, to comply with the provisions of CMEA codified at 21 U.S.C. 
971(h), this Final Rule adds a new paragraph (d) to 21 CFR 1313.13, 
Contents of import declaration, and states that importers of ephedrine, 
pseudoephedrine, and phenylpropanolamine must provide information known 
to them on the chain of distribution from the manufacturer to the 
importer. This rule adds a new 21 CFR 1313.42 to cover the provisions 
of paragraphs (h)(2) and (h)(3) on orders to prohibit imports from 
foreign manufacturers and distributors who refuse to cooperate with 
requests for information.
    Effective May 4, 2010, all U.S. importers of the List I chemicals 
ephedrine, pseudoephedrine, and phenylpropanolamine will be required to 
use the new DEA Form 486A ``Importation of the List I Chemicals 
Ephedrine, Pseudoephedrine, and Phenylpropanolamine'' to notify DEA of 
their imports of those three List I chemicals.

Regulatory Certifications

Regulatory Flexibility Act

    The Deputy Administrator hereby certifies that this rulemaking has 
been drafted in accordance with the provisions of the Regulatory 
Flexibility Act (5 U.S.C. 601-612). This rule is necessary to comply 
with statutory mandates which require that notices of importation for 
imports of the List I chemicals ephedrine, pseudoephedrine, and 
phenylpropanolamine provide to DEA all information known to the 
importer on the foreign chain of distribution of the chemical. As noted 
above, changes to the forms also respond to provisions regarding import 
quotas, requiring that importers note on the form the amount of quota 
issued and available for each chemical. Without these changes, DEA will 
be unable to comply with statutory mandates and will not be able to 
fully administer the system of import and production quotas mandated 
for ephedrine, pseudoephedrine, and phenylpropanolamine.
    DEA notes that the statute requires importers to provide only 
information that is known to them; the burden associated with providing 
names on the foreign chain of distribution will be minimal. This rule 
does not impose any new costs. DEA notes that, prior to this rule, 
importers of ephedrine, pseudoephedrine, and phenylpropanolamine were 
required to complete a DEA Form 486 to import these List I chemicals. 
Only the information on the form has changed. Therefore, this rule will 
not have a significant economic impact on a substantial number of small 
entities.

Executive Order 12866

    The Deputy Administrator further certifies that this rulemaking has 
been drafted in accordance with the principles in Executive Order 12866 
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. As discussed above, this action is codifying 
statutory provisions and involves no agency discretion. This statutory 
change imposes minimal costs on importers; they simply have to file a 
form with DEA in advance of transactions that includes information that 
is known to them. They are not required to conduct research to obtain 
information. DEA notes that the requirement to complete the form is 
already present in DEA regulations. This rule merely requires that 
importers of these three List I chemicals provide information known to 
them regarding the foreign chain of distribution of the chemicals.

Paperwork Reduction Act

    This Final Rule revises an existing information collection by 
establishing a new form for the reporting of imports of the List I 
chemicals ephedrine, pseudoephedrine, and phenylpropanolamine. 
Specifically, DEA is establishing a new DEA Form 486A, ``Import 
Declaration for Ephedrine, Pseudoephedrine, and Phenylpropanolamine''. 
This form permits the reporting of any information known to the U.S. 
importer regarding the foreign chain of distribution of the List I 
chemical(s).
    Specifically, DEA estimates that 30 respondents will import 
ephedrine, pseudoephedrine, and phenylpropanolamine annually. These 
persons will conduct 350 individual importations, necessitating the 
submission of 350 forms and 385 import return declarations. Because of 
the additional information required on the DEA Form 486A, DEA estimates 
that this form will take 24 minutes to complete, as opposed to the DEA 
Form 486, which DEA estimates takes 20 minutes to complete. DEA notes 
here that the completion of the DEA Form 486A will be in lieu of the 
currently-required completion of the DEA Form 486. Therefore, while the 
number of responses remains constant, the hour burden increases due to 
the greater time associated with the DEA Form 486A. The net increase 
for this collection is 24 hours annually.
    DEA solicited comments regarding the Paperwork Reduction Act 
aspects of the Notice of Proposed Rulemaking and received no comments. 
Therefore, DEA is finalizing the Paperwork Reduction Act aspects of 
this rule without change.

[[Page 10171]]

    The Department of Justice, Drug Enforcement Administration, has 
submitted the following information collection request to the Office of 
Management and Budget for review and clearance in accordance with 
review procedures of the Paperwork Reduction Act of 1995.
    Overview of information collection 1117-0023:
    (1) Type of Information Collection: Revision of an existing 
collection.
    (2) Title of the Form/Collection: Import/Export Declaration for 
List I and List II Chemicals.
    (3) Agency form number, if any, and the applicable component of the 
Department of Justice sponsoring the collection:
    Form Number: DEA Form 486 and DEA Form 486A. Office of Diversion 
Control, Drug Enforcement Administration, 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: Persons importing, exporting, and conducting 
international transactions with List I and List II chemicals must 
notify DEA of those transactions in advance of their occurrence, 
including information regarding the person(s) to whom the chemical will 
be transferred and the quantity to be transferred. Persons must also 
provide return declarations, confirming the date of the importation and 
transfer, and the amounts of the chemical transferred. For the List I 
chemicals ephedrine, pseudoephedrine, and phenylpropanolamine, 
importers must report all information known to them on the chain of 
distribution of the chemical from the manufacturer to the importer. 
This information is used to prevent shipments not intended for 
legitimate purposes.
    (5) An estimate of the total number of respondents and the amount 
of time estimated for an average respondent to respond:

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                                             Number of    Number of                                     Total
                                            respondents   responses     Average time per response      (hours)
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Form 486 (export).........................          193       10,327  0.283 hour (17 minutes).....       2,926
Form 486 (Export Return Declaration)......          193       10,327  0.166 hour (10 minutes).....        1721.2
Form 486 (import).........................          120        1,268  0.333 hour (20 minutes).....         422.6
Form 486 (import return declaration) *....          120        1,395  0.2 hour (12 minutes).......         279
Form 486A (import)........................           30          350  0.4 hour (24 minutes).......         140
Form 486A (import return declaration) *...           30          385  0.2 hour (12 minutes).......          77
Form 486 (international transaction)......           14           14  0.2 hour (12 minutes).......           2.8
Form 486 (international transaction return           14           14  0.08 hour (5 minutes).......           1.2
 declaration).
Quarterly reports for imports of acetone,           110          440  0.5 hour (30 minutes).......         220
 2-butanone, and toluene.
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Total.....................................          193  ...........  ............................       5,789.8
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* DEA assumes 10% of all imports will not be transferred in the first 30 days and will necessitate submission of
  a subsequent return declaration.

    (6) An estimate of the total public burden (in hours) associated 
with the collection: DEA estimates that this collection will take 5,790 
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 
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 
$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 1313

    Administrative practice and procedure, Drug traffic control, 
Exports, Imports, Reporting and recordkeeping requirements.

    Dated: February 25, 2010.
Michele M. Leonhart,
Deputy Administrator.

0
For the reasons set out above, 21 CFR part 1313 is amended as follows:

PART 1313--IMPORTATION AND EXPORTATION OF LIST I AND LIST II 
CHEMICALS

0
1. The authority citation for part 1313 continues to read as follows:

    Authority: 21 U.S.C. 802, 830, 871(b), 971.


0
2. Section 1313.13 is amended by adding paragraph (d) to read as 
follows:


Sec.  1313.13  Contents of import declaration.

* * * * *
    (d) Any regulated person importing ephedrine, pseudoephedrine, or 
phenylpropanolamine must submit, on the import declaration, all 
information known to the importer on the chain of distribution of the 
chemical from the manufacturer to the importer. Ephedrine, 
pseudoephedrine, or phenylpropanolamine include each of the salts, 
optical isomers, and salts of optical isomers of the chemical.

[[Page 10172]]


0
3. Section 1313.42 is added to read as follows:


Sec.  1313.42  Prohibition of shipments from certain foreign sources.

    (a) If the Administrator determines that a foreign manufacturer or 
distributor of ephedrine, pseudoephedrine, or phenylpropanolamine has 
refused to cooperate with a request by the Administrator for 
information known to the manufacturer or distributor on the 
distribution of the chemical, including sales, the Administrator may 
issue an order prohibiting the importation of the chemical in any case 
where the manufacturer or distributor is part of the chain of 
distribution.
    (b) Not later than 60 days prior to issuing the order to prohibit 
importation, the Administrator shall publish in the Federal Register a 
notice of intent to issue the order. During the 60-day period, imports 
from the foreign manufacturer or distributor may not be restricted 
under this section.

[FR Doc. 2010-4716 Filed 3-4-10; 8:45 am]
BILLING CODE 4410-09-P
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