Federal Register / Vol. 69, No. 228 / Monday, November 29, 2004 / Notices 69409

of factors and may give each factor the 

weight she deems appropriate in 

determining whether a registration 

should be revoked or an application for 

registration denied. See, e.g., Energy 

Outlet, 64 FR 14269 (1999). See also, 

Henry J. Schwartz, Jr., M.D., 54 FR 

16422 (1989). 

The Deputy Administrator finds 

factors four and five relevant to the 

pending application for registration. 

With regard to factor four, the 

applicant’s past experience in the 

distribution of chemicals, the Deputy 

Administrator finds this factor relevant 

based on Mr. Patel’s lack of knowledge 

and experience regarding the laws and 

regulations governing handling of list I 

chemical products. In prior DEA 

decisions, this lack of experience in 

handling list I chemical products has 

been a factor in denying pending 

applications for regristration. See, e.g., 

Direct Wholesale, supra, 69 FR 11654; 

ANM Wholesale, 69 FR 11652 (2004); 

Xtreme Enterprises, Inc., 67 FR 76195 

(2002). 

With regard to factor five, other 

factors relevant to and consistent with 

the public safety, the Deputy 

Administrator finds this factor weights 

heavily against granting the application. 

Unlawful methamphetamine use is a 

growing public health and safety 

concern throughout the United States 

and Southeast. Ephedrine and 

pseudoephedrine are precursor products 

needed to manufacture 

methamphetamine and operators of 

illicit methamphetamine laboratories 

regularly acquire the precursor products 

needed to manufacture the drug from 

convenience stores and gas stations 

which, in prior DEA decisions, have 

been identified as constituting the grey 

market for list I chemical products. It is 

apparent that Prachi intends on being a 

participant in this market. 

While there are no specific 

prohibitions under the Controlled 

Substances Act regarding the sale of 

listed chemical products to these 

entities, DEA has nevertheless found 

these establishments serve as sources for 

the diversion of large amounts of listed 

chemical products. See, e.g., ANM 

Wholesale, supra, 69 FR 11652; Xtreme 

Enterprises, Inc., supra, 67 FR 76195; 

Sinbad Distributing, 67 FR 10232 

(2002); K.V.M. Enterprises, 67 FR 70968 

(2002). 

The Deputy Administrator has 

previously found that many 

considerations weighed heavily against 

registering a distributor of list I 

chemicals because, ‘‘[v]irtually all of the 

Respondent’s customers, consisting of 

gas station and convenience stores, are 

considered part of the grey market, in 

which large amounts of listed chemicals 

are diverted to the illicit manufacture of 

amphetamine and methamphetamine.’’

Xtreme Enterprises, Inc., supra, 67 FR at 

76197. As in Xtreme Enterprises, Inc.,

Mr. Patel’s lack of a criminal record and 

stated intent to comply with the law and 

regulations are far outweighed by his 

lack of experience and the company’s 

intent to sell ephedrine and 

pseudoephedrine exclusively to the gray 

market. 

The Deputy Administrator is further 

troubled by Mr. Patel’s reticence to 

provide requested information to DEA, 

indicating his company cannot be 

trusted to handle the responsibilities of 

a registrant. 

Based on the foregoing, the Deputy 

Administrator concludes that granting 

the pending application would be 

inconsistent with the public interest. 

Accordingly, the Deputy 

Administrator of the Drug Enforcement 

Administration, pursuant to the 

authority vested in her by 21 U.S.C. 823 

and 823 and 28 CFR 0.100(b) and 0.104, 

hereby orders the pending application 

for DEA Certificate of Registration, 

previously submitted by Prachi 

Enterprises, Inc., be, and it hereby is, 

denied. This order is effective December 

29, 2004.

Dated: November 10, 2004. 

Michele M. Leonhart, 

Deputy Administrator.

[FR Doc. 04–26311 Filed 11–26–04; 8:45 am] 

BILLING CODE 4410–09–M

DEPARTMENT OF JUSTICE

Drug Enforcement Administration 

Volusia Wholesale; Denial of 

Registration 

On July 23, 2004, the Deputy 

Assistant Administrator, Office of 

Diversion Control, Drug Enforcement 

Administration (DEA), issued an Order 

to Show Cause to Volusia Wholesale 

(Volusia) proposing to deny its 

December 12, 2003, application for DEA 

Certificate of Registration as a 

distributor of list I chemicals. The Order 

to Show Cause alleged that granting 

Volusia’s application would be 

inconsistent with the public interest, as 

that term is used in 21 U.S.C. 823(h). 

The order also notified Volusia that 

should no request for a hearing be filed 

within 30 days, its hearing right would 

be deemed waived. 

According to the DEA investigative 

file, the Order to Show Cause was sent 

by certified mail to Volusia at its thenproposed registered location at 917 

Daytona Avenue, Daytona Beach, 

Florida 32117. It was received on 

August 2, 2004, and DEA has not 

received a request for a hearing or any 

other reply from Volusia or anyone 

purporting to represent the company in 

this matter. 

Therefore, the Deputy Administrator 

of DEA, finding that (1) thirty days have 

passed since delivery of the Order to 

Show Cause, and (2) no request for a 

hearing having been received, concludes 

that Volusia has waived its hearing 

right. See Aqui Enterprises, 67 FR 12576 

(2002). After considering relevant 

material from the investigative file, the 

Deputy Administrator now enters her 

final order without a hearing pursuant 

to 21 CFR 1309.53(c) and (d) and 

1316.67. The Deputy Administrator 

finds as follows. 

List I chemicals are those that may be 

used in the manufacture of a controlled 

substance in violation of the Controlled 

Substances Act. 21 U.S.C. 802(34); 21 

CFR 1310.02(a). Pseudoephedrine and 

ephedrine are list I chemicals 

commonly used to illegally manufacture 

methamphetamine, a Schedule II 

controlled substance. As noted in 

previous DEA final orders, 

methamphetamine is an extremely 

potent central nervous system 

stimulant, and its abuse is a persistent 

and growing problem in the United 

States. See e.g., Direct Wholesale, 69 FR 

11654 (2004); Branex, Inc., 69 FR 8682 

(2004); Yemen Wholesale Tobacco and 

Candy Supply, Inc., 67 FR 9997 (2002); 

Denver Wholesale, 67 FR 99986 (2002). 

The Deputy Administrator’s review of 

the investigative file reveals that on or 

about September 9, 2003, an application 

was submitted by the owner of Volusia, 

Mr. Anwar Khrino, seeking registration 

to distribute ephedrine and 

pseudoephedrine list I chemical 

products. The application initially listed 

the proposed registered location as Mr. 

Khrino’s then-residence, 1420 N. 

Grandview Avenue, Daytona Beach, 

Florida 32118. He subsequently moved 

to 917 Daytona Avenue, Daytona Beach, 

Florida 32117, which was to be 

Volusia’s registered address. 

In connection with the pending 

application, an on-site pre-registration 

investigation was conducted at the 

Daytona Avenue proposed premises. 

The location was Mr. Khrino’s 

residence. There were no security 

measures in place and his intent was to 

store the chemical products overnight in 

a locked delivery van in the driveway.

Mr. Khrino advised investigators 

Volusia is a sole proprietorship and 

wholesale distributor of approximately 

60 to 80 sundry and novelty items to 

convenience stores and gas stations. He 

proposed to distribute ‘‘two packs’’ of 

69410 Federal Register / Vol. 69, No. 228 / Monday, November 29, 2004 / Notices 

six different cough and cold remedies 

containing pseudoephedrine. 

Mr. Khrino identified two proposed 

suppliers of listed chemicals, one of 

which DEA was aware no longer held a 

DEA registration to handle listed 

chemicals. Mr. Khrino initially failed to 

provide DEA a complete proposed 

customer list for listed chemical 

products. Later, he sent DEA a 

handwritten list of 13 purported 

customers for listed chemicals. DEA 

conducted two verifications of 

purported customers. At the first 

convenience store, investigators were 

told the store was not a customer of 

Volusia. Investigators also noted the 

store was displaying the combination 

ephedrine, Mini-thins product on its 

counter. Investigators were unable to 

locate the second purported customers, 

a delicatessen. There was no such 

retailer at the address provided by Mr. 

Khrino and the contact number for this 

‘‘customer‘‘turned out to be Volusia’s 

fax machine. 

The State of Florida has a substantial 

methamphetamine abuse problem in 

Northeast and Central Florida, and DEA 

is aware of a past history of trafficking 

in precursors in these areas. Distributors 

or retailers serving in the illicit 

methamphetamine trade observe no 

borders and trade across state lines. In 

fact, where precursor laws are stringent, 

out-of-state distributors often make 

direct shipments to retailers without 

observing state requirements. 

DEA is aware that small illicit 

laboratories operate with listed 

chemical products often procured, 

legally or illegally, from non-traditional 

retailers of over-the-counter drug 

products, such as gas stations and small 

retail markets. Some retailers acquire 

product from multiple distributors too 

mask their acquisition of large amounts 

of listed chemicals. In addition, some 

individuals utilize sham corporations or 

fraudulent records to establish a 

commercial identity in order to acquire 

listed chemicals. 

In the adjacent State of Georgia, there 

has been a consistent increase in the 

number of illicit laboratories and 

enforcement teams continue to note a 

trend toward smaller capacity 

laboratories. This is likely due to the 

ease of concealment associated with 

smaller laboratories, which continue to 

dominate seizures and cleanup 

responses. 

DEA knows by experience that there 

exists a ‘‘gray market’’ in which certain 

high strength, high quantity 

pseudoephedrine and ephedrine 

products are distributed only to 

convenience stores and gas stations, 

from where they have a high incidence 

of diversion. These grey market 

products are not sold in large discount 

stores, retail pharmacies or grocery 

stores, where sales of therapeutic overthe-counter drugs predominate. MiniThins and ‘‘two-way’’ products and 

other pseudoephedrine products are 

prime products in this gray market 

industry and are rarely found in any 

retail store serving the traditional 

therapeutic market. 

DEA also knows from industry data, 

market studies and statistical analysis 

that over 90% of over-the-counter drug 

remedies are sold in drug stores, 

supermarket chains and ‘‘big box’’

discount retailers. Less than one percent 

of cough and cold remedies are sold in 

gas stations or convenience stores. 

Studies have indicated that most 

convenience stores could not be 

expected to sell more than $20.00 to 

$40.00 worth of products containing 

pseudoephedrine per month. The 

expected sales of ephedrine products 

are known to be even smaller. 

Furthermore, convenience stores 

handling gray market products often 

order more product than what is 

required for the legitimate market and 

obtain chemical products from multiple 

distributors. 

Pursuant to 21 U.S.C. 823(h), the 

Deputy Administrator may deny an 

application for a Certificate of 

Registration if she determines that 

granting the registration would be 

inconsistent with the public interest. 

Section 823(h) requires that the 

following factors be considered in 

determining the public interest: 

(1) Maintenance of effective controls 

against diversion of listed chemicals 

into other than legitimate channels; 

(2) Compliance with applicable 

Federal, State and local law; 

(3) Any prior conviction record under 

Federal or State laws relating to 

controlled substances or to chemicals 

controlled under Federal or State law; 

(4) Any past experience of the 

applicant in the manufacture and 

distribution of chemicals; and 

(5) Such other factors as are relevant 

to and consistent with the public health 

and safety. 

As with the public interest analysis 

for practitioners and pharmacies 

pursuant to subsection (f) of section 823, 

these factors are to be considered in the 

disjunctive; the Deputy Administrator 

may rely on any one or a combination 

of factors and may give each factor the 

weight she deems appropriate in 

determining whether a registration 

should be revoked or an application for 

registration denied. See, e.g., Energy 

Outlet, 64 FR 14269 (1999). See also, 

Henry J. Schwartz, Jr., M.D., 54 FR 

16422 (1989). 

The Deputy Administrator finds 

factors one, four and five relevant to the 

pending application for registration.

As to factor one, maintenance of 

effective controls against diversion of 

listed chemicals into other than 

legitimate channels, the DEA preregistration inspection documented 

inadequate security at the proposed 

registered location, which is a personal 

residence. See, e.g., John E. McRae d/b/

a J & H Wholesale, 69 FR 51480, 51481 

(2004). Mr. Khrino has proposed the 

storage of listed chemical products 

inside a van that is routinely parked in 

the driveway of his residence. As the 

Deputy Administrator has previously 

held, ‘‘the prospect of listed chemicals 

being stored in an unattended vehicle 

[is] fraught with the dangers of 

diversion.’’ See, William E. ‘‘Bill’’ Smith 

d/b/a B & B Wholesale, 69 FR 22559, 

22560 (2004). Accordingly, this factor 

weighs against the granting of Volusia’s 

pending registration application. 

With regard to factor four, the 

applicant’s past experience in the 

distribution of chemicals, the Deputy 

Administrator finds this factor relevant 

based on Mr. Khrino’s lack of 

knowledge and experience regarding the 

laws and regulations governing 

handling of list I chemical products. In 

prior DEA decisions, this lack of 

experience in handling list I chemical 

products has been a factor in denying 

pending applications for registration. 

See, e.g., Direct Wholesale, supra, 69 FR 

11654; ANM Wholesale, 69 FR 11652 

(2004); Xtreme Enterprises, Inc., 67 FR 

76195 (2002). 

With regard to factor five, other 

factors relevant to and consistent with 

the public safety, the Deputy 

Administrator finds this factor weighs 

heavily against granting the application. 

Unlawful methamphetamine use is a 

growing public health and safety 

concern throughout the United States 

and the Southeast. Ephedrine and 

pseudoephedrine are precursor products 

needed to manufacture 

methamphetamine and operators of 

illicit methamphetamine laboratories 

regularly acquire the precursor products 

needed to manufacture the drug from 

convenience stores and gas stations 

which, in prior DEA decisions, have 

been identified as constituting the grey 

market for list I chemical products. It is 

apparent that Volusia intends on being 

a participant in this market. 

While there are no specific 

prohibitions under the Controlled 

Substances Act regarding the sale of 

listed chemical products to these 

entities, DEA has nevertheless found 

Federal Register / Vol. 69, No. 228 / Monday, November 29, 2004 / Notices 69411

these establishments serve as sources for 

the diversion of large amounts of listed 

chemical products. See, e.g., ANM 

Wholesale supra, 69 FR 11652; Xtreme 

Enterprises, Inc., supra, 67 FR 76195; 

Sinbad Distributing, 67 FR 10232 

(2002); K.V.M. Enterprises, 67 Fr 70968 

(2002). 

The Deputy Administrator has 

previously found that many 

considerations weighed heavily against 

registering a distributor of list I 

chemicals because, ‘‘[v]irtually all of the 

Respondent’s customers, consisting of 

gas station and convenience stores, are 

considered part of the grey market, in 

which large amounts of listed chemicals 

are diverted to the illicit manufacture of 

amphetamine and methamphetamine.’’

Xtreme Enterprises, Inc., supra, 67 FR at 

76197. As in Xtreme Enterprises, Inc.,

Mr. Khrino’s lack of a criminal record 

and intent to comply with the law and 

regulations are far outweighed by his 

lack of experience and the company’s 

intent to sell ephedrine and 

pseudoephedrine exclusively to the gray 

market. 

The Deputy Administrator is further 

troubled by Mr. Khrino’s failure to 

provide accurate information to DEA, 

indicating his company cannot be 

trusted to handle the responsibilities of 

a registrant. 

Based on the foregoing, the Deputy 

Administrator concludes that granting 

the pending application would be 

inconsistent with the public interest. 

Accordingly, the Deputy 

Administrator of the Drug Enforcement 

Administration, pursuant to the 

authority vested in her by 21 U.S.C. 823 

and 824 and 28 CFR 0.100(b) and 0.104, 

hereby orders the pending application 

for DEA Certificate of Registration, 

previously submitted by Volusia 

Wholesale, be, and it hereby is, denied. 

This order is effective December 29, 

2004.

Dated: November 10, 2004. 

Michele M. Leonhart, 

Deputy Administrator.

[FR Doc. 04–26312 Filed 11–26–04; 8:45 am] 

BILLING CODE 4410–09–M

DEPARTMENT OF LABOR

Employment and Training 

Administration 

State Quality Service Plan (SQSP); 

Comment Request

ACTION: Notice.

SUMMARY: The Department of Labor, as 

part of its continuing effort to reduce 

paperwork and respondent burden 

conducts a preclearance consultation 

program to provide the general public 

and Federal agencies with an 

opportunity to comment on proposed 

and/or continuing collections of 

information in accordance with a 

provision of the Paperwork Reduction 

Act of 1995 at 44 U.S.C. 3506(c)(2)(A). 

This program helps to ensure that 

requested data can be provided in the 

desired format, reporting burden (time 

and financial resources) is minimized, 

collection instruments are clearly 

understood, and the impact of collection 

requirements on respondents can be 

properly assessed. Currently, the 

Employment and Training 

Administration (ETA) is soliciting 

comments concerning the proposed 

extension of the State Quality Service 

Plan (SQSP). 

Guidelines for completion and 

submittal of the SQSP are contained in 

ETA Handbook 336, 17th Edition. Fiscal 

year-specific information such as 

Federal program emphasis, or additional 

budget allocations, will be provided 

annually in an implementation directive 

that will initiate the planning process 

each year. The requirements of the 

reporting and data collection process 

itself will remain unchanged from year 

to year. Copies of the SQSP Handbook 

may be obtained by contacting the 

addressee below. The Handbook is also 

available on the Internet at http://

www.workforcesecurity.doleta.gov.

DATES: Submit comments on or before 

January 28, 2005.

ADDRESSES: Send comments to Delores 

A. Mackall, U.S. Department of Labor, 

200 Constitution Avenue, NW., Room 

S–4231, Washington, DC 20210, (202) 

693–3183 (this is not a toll-free 

number); fax, (202) 693–3975; Internet: 

mackall.delores@dol.gov.

FOR FURTHER INFORMATION CONTACT:

Delores A. Mackall, U.S. Department of 

Labor, 200 Constitution Avenue, NW., 

Room S–4231, Washington, DC 20210, 

(202) 693–3183 (this is not a toll-free 

number); fax, (202) 693–3975; Internet: 

mackall.delores@dol.gov.

SUPPLEMENTARY INFORMATION: 

I. Background 

The SQSP is the planning instrument 

for the Unemployment Insurance (UI) 

system nationwide. The statutory basis 

for the SQSP is Title III of the Social 

Security Act, which establishes 

conditions for each State to receive 

grant funds to administer its UI 

program. Plans are prepared annually, 

since funds for UI operations are 

appropriated each year. ETA’s annual 

budget request for State UI operations 

contains workload assumptions for 

which a State must plan in order for the 

Secretary of Labor to carry out her 

responsibilities under Title III. ETA 

issues financial planning targets based 

on the budget request. States make plans 

based on these assumptions and targets. 

II. Desired Focus of Comments 

Currently, the Department of Labor is 

soliciting comments concerning the 

proposed extension collection of the UI 

SQSP. The Department is particularly 

interested in comments which: 

• 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; 

• 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; 

• Enhance the quality, utility, and 

clarity of the information to be 

collected; and 

• 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. 

A copy of the proposed ICR can be 

obtained by contacting the office listed 

above in the addressee section of this 

notice. 

III. Current Actions 

ETA proposes to extend this clearance 

which contains a reduction in burden 

hours. The reduction in hours is a result 

of changes to the SQSP which stemmed 

from a 5-year review of UI Performs. 

The number of measures for which a 

state is held accountable has been 

reduced; however, the average number 

of corrective action plans that states 

must submit for not meeting the criteria 

has increased. States are no longer 

required to submit continuous 

improvement plans. The SQSP narrative 

has been streamlined to exclude 

previously required Focus narratives. 

Additionally, states will no longer be 

required to address environmental 

factors, such as economic conditions, 

political climate, labor/business 

relationships, or state legislative issues. 

States will describe in a single narrative: 

performance in comparison to the 

Government Performance Results Act 

(GPRA) goals; results of customer 

satisfaction surveys, which is optional; 

and actions planned to correct 

deficiencies regarding program reviews,