Federal Register / Vol. 69, No. 240 / Wednesday, December 15, 2004 / Rules and Regulations 74957

DEPARTMENT OF JUSTICE

Drug Enforcement Administration 

21 CFR Part 1310 

[Docket No. DEA–137F2] 

RIN 1117–AA31 

Exemption of Chemical Mixtures

AGENCY: Drug Enforcement 

Administration (DEA), Justice.

ACTION: Final rule with request for 

comment. 

SUMMARY: On September 16, 1998, the 

Drug Enforcement Administration 

(DEA) published a Notice of Proposed 

Rulemaking (NPRM) (63 FR 49506) that 

proposed new regulations concerning 

chemical mixtures that contain any of 

the 34 listed chemicals subject to DEA 

control at that time. The NPRM was the 

initial step toward implementation of 

Controlled Substances Act (CSA) 

provisions that require that only those 

chemical mixtures identified by 

regulation be exempt from applicable 

regulatory controls. This Final Rule will 

implement regulations that define those 

chemical mixtures that qualify for 

automatic exemption for 27 of the 34 

listed chemicals addressed in the 

NPRM. 

Under separate rulemaking (68 FR 

23195) DEA has finalized regulations 

pertaining to six of the listed chemicals 

addressed in the initial NPRM. That 

rulemaking specifies those chemical 

mixtures qualifying for automatic 

exemption based upon specific 

exemption categories and concentration 

limits. That rulemaking also finalized an 

application process for chemical 

mixtures that do not qualify for 

automatic exemption. 

This Final Rulemaking will add a new 

provision not previously raised in the 

NPRM. This newly introduced 

provision will exempt from the 

recordkeeping and reporting 

requirements both domestic and import 

transactions in mixtures containing the 

List II chemicals acetone, ethyl ether, 2-

butanone, and toluene. Because this 

exemption was not discussed in the 

NPRM published on September 16, 

1998, DEA is implementing this 

exemption on an interim basis and 

requests public comment with respect to 

only this exemption.

DATES: This Final Rule is effective 

January 14, 2005. Persons seeking 

registration must apply on or before 

February 14, 2005, in order to continue 

their business pending final action by 

DEA on their application. DEA is 

seeking comments on new Section 

1310.08(l) only. Written comments must 

be postmarked, and electronic 

comments must be sent, on or before 

January 14, 2005.

ADDRESSES: To ensure proper handling 

of comments, please reference ‘‘Docket 

No. DEA–137F2’’ on all written and 

electronic correspondence. Written 

comments being sent via regular mail 

should be sent to the Deputy 

Administrator, Drug Enforcement 

Administration, Washington, DC 20537, 

Attention: DEA Federal Register 

Representative/CCD. Written comments 

sent via express mail should be sent to 

DEA Headquarters, Attention: DEA 

Federal Register Representative/CCD, 

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 http://

www.regulations.gov using the 

electronic comment form provided on 

that site. An electronic copy of this 

document is also available at the http:/

/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.

FOR FURTHER INFORMATION CONTACT:

Christine A. Sannerud, Ph.D., Chief, 

Drug & Chemical Evaluation Section, 

Office of Diversion Control, Drug 

Enforcement Administration, 

Washington, DC 20537, telephone (202) 

307–7183

SUPPLEMENTARY INFORMATION: 

I. Background 

Historical Legal Status of Chemical 

Mixtures 

The Chemical Diversion and 

Trafficking Act of 1988 (Pub. L. 100–

690) (CDTA) created the definition of 

‘‘chemical mixture’’ (21 U.S.C. 802(40)), 

and exempted chemical mixtures from 

regulatory control. The CDTA 

established 21 U.S.C. 802(39)(A)(v) to 

exclude ‘‘any transaction in a chemical 

mixture’’ from the definition of a 

‘‘regulated transaction.’’ The exemption 

of all chemical mixtures, however, 

provided traffickers with an unregulated 

source for obtaining listed chemicals for 

use in the illicit manufacture of 

controlled substances. 

To remedy this situation, the 

Domestic Chemical Diversion Control 

Act of 1993 (DCDCA), enacted in April 

1994, subjected chemical mixtures 

containing listed chemicals to CSA 

regulatory requirements, unless 

specifically exempted by regulation. 

The DCDCA, therefore, subjected all 

regulated chemical mixtures to 

recordkeeping, reporting, and security 

requirements of the CSA. Additionally, 

the DCDCA added a registration 

requirement for handlers of regulated 

List I chemical mixtures.

The DCDCA, however, also amended 

21 U.S.C. 802(39)(A)(v) to provide the 

Attorney General with the authority to 

establish regulations exempting 

chemical mixtures from the definition of 

a ‘‘regulated transaction’’ ‘‘based on a 

finding 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 

or chemicals contained in the mixture 

cannot be readily recovered’’ (21 U.S.C. 

802(39)(A)(v)). This authority has been 

delegated to the Administrator of DEA 

by 28 CFR 0.100 and redelegated to the 

Deputy Administrator under 28 CFR 

0.104 (Subpart R) Appendix Sec. 12. 

Prior to publication of a final 

rulemaking, chemical mixtures 

containing listed chemicals have been 

treated as exempt from CSA regulatory 

control. This final rulemaking specifies 

criteria used to determine whether 

chemical mixtures qualify for automatic 

exemption from CSA chemical 

regulatory controls. Those chemical 

mixtures that do not meet the 

exemption criteria shall be treated as 

regulated chemicals and therefore 

subject to CSA chemical regulatory 

controls. 

Since DEA recognizes that 

concentration or category criteria alone 

cannot identify all mixtures that warrant 

exemption, an application process has 

been implemented in 21 CFR 1310.13. 

This process, finalized in a Final Rule 

published in the Federal Register at 68 

FR 23195 (May 1, 2003), allows 

manufacturers to apply for exemption 

from CSA regulatory controls, for those 

chemical mixtures that do not qualify 

for automatic exemption. 

Chemical Mixture Definition 

21 U.S.C. 802(40) defines the term 

‘‘chemical mixture’’ as ‘‘a combination 

of two or more chemical substances, at 

least one of which is not a List I 

chemical or a List II chemical, except 

that such term does not include any 

combination of a List I chemical or a 

List II chemical with another chemical 

that is present solely as an impurity.’’

Therefore, a chemical mixture contains 

any number of listed chemicals along 

with any number of non-listed 

chemicals. A combination of only listed 

chemicals is, therefore, not a chemical 

mixture pursuant to CSA definition. As 

such, the regulatory controls pertaining 

74958 Federal Register / Vol. 69, No. 240 / Wednesday, December 15, 2004 / Rules and Regulations 

to each individual listed chemical are 

applicable. 

DEA does not consider a chemical 

mixture to mean the combination of a 

listed chemical in an inert carrier. An 

inert carrier can be any chemical that 

does not interfere with the listed 

chemical’s function but is present to aid 

in the delivery of the listed chemical so 

it can be used in some chemical process. 

Examples include, but are not limited 

to, solutions of listed chemicals such as 

methylamine in water or hydrogen 

chloride dissolved in water or alcohol. 

Sassafras oil, an essential oil mostly 

consisting of safrole, is not regarded as 

a chemical mixture containing safrole. It 

is regulated as the List I chemical 

safrole. These examples have always 

been treated as listed chemicals and are 

not new to this rulemaking. Persons 

who question if their formulations are 

chemical mixtures should contact DEA 

for guidance. 

Federal Register Publications Pertaining 

to Chemical Mixture Exemption 

Regulations regarding the exemption 

of chemical mixtures were initially 

proposed by DEA on October 13, 1994 

as part of its proposed regulations to 

implement the DCDCA (59 FR 51888). 

In response to industry concerns, the 

proposed regulations were withdrawn 

on December 9, 1994 (59 FR 63738). 

DEA proposed new regulations 

regarding the exemption of chemical 

mixtures by publishing a new NPRM 

entitled ‘‘Exemption of Chemical 

Mixtures’’ on September 16, 1998 (63 

FR 49506). DEA proposed the following 

three-tiered approach to identify which 

chemical mixtures qualify for automatic 

exemption: (1) It contains a listed 

chemical at or below an established 

concentration limit; or (2) it falls within 

a specifically defined category; or (3) the 

manufacturer of the mixture applies for 

and is granted a specific exemption for 

the product. 

1. Concentration Limits 

DEA proposed that each chemical be 

assigned a concentration limit that, if 

found at or below the limit, will cause 

the mixture to be treated as a nonregulated chemical. This quantitative 

approach is considered necessary in 

order to simplify the method of 

identifying regulated chemical mixtures. 

Identifying regulated chemical mixtures 

by narrative is impractical due to the 

variety of chemical products. These 

concentration limits are expected to 

exempt the vast majority of chemical 

mixtures containing listed chemicals. 

2. Exemption Categories 

DEA also proposed the creation of 

three specific categories of automatic 

exemption. They are (1) waste materials 

regulated by the Environmental 

Protection Agency (EPA); (2) fully 

formulated paints and coatings; and (3) 

harvested plant material. A chemical 

mixture that falls into one of these three 

categories is exempt regardless of the 

amount of listed chemical it contains. 

Waste materials were proposed as an 

exempt category provided there is 

documentation on EPA Form 8700–22 

(Uniform Hazardous Waste Manifest) 

and the materials are being distributed 

to another person solely for the purpose 

of disposal by incineration. These 

mixtures include only those that are 

covered by EPA regulations and have a 

‘‘cradle to grave’’ paper trail. Further, 

the exemption applies only to the extent 

that the Form 8700–22 is available for 

inspection and copying by DEA.

Completely formulated paints and 

coatings were proposed for exemption 

because they contain ingredients, such 

as pigments, and other components, 

which render them unsuitable to 

traffickers. Proposed for inclusion in 

this category were paints, clear coats, 

topcoats, primers, varnishes, sealers, 

adhesives, lacquers, stains, shellacs, 

inks, and temporary protective coatings. 

The final proposed exempt category is 

harvested plant material. Harvested 

plant material that contains listed 

chemicals, while meeting the definition 

of a chemical mixture, was proposed for 

exemption if the plant material is not 

concentrated or changed from its natural 

state. This provision was finalized in a 

Federal Register Notice (68 FR 23195) 

published May 1, 2003. Harvested plant 

material refers to the plant itself and not 

material growing on a plant, such as 

Ergot, a source for the List I chemicals 

ergonovine and ergotamine. 

3. Exemption by Application Process 

As stated above, DEA recognizes that 

the concentration limit and category 

exemption criteria cannot identify all 

mixtures that should receive exemption 

status. DEA has implemented an 

application process to exempt 

additional mixtures (21 CFR 1310.13). 

This application process was also 

finalized in the Federal Register Notice 

(68 FR 23195) published May 1, 2003. 

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 the listed chemical cannot be 

readily recovered (i.e., it meets the 

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

An application may be for a single or a 

multiple number of formulations. 

Actions Being Taken in This Final Rule 

a. Exemption Based on Concentration 

Limits for Each Listed Chemical 

While the September 16, 1998 NPRM 

(63 FR 49506) pertained to the 

regulation of chemical mixtures which 

contain any of 34 listed chemicals 

subject to DEA control, this rulemaking 

finalizes only those portions of the 

NPRM pertaining to the 27 chemicals 

given in The Table of Concentration 

Limits provided in this rulemaking 

(hereafter referred to as ‘‘The Table’’). 

Six of the 34 listed chemicals—

ephedrine, N-methylephedrine, Nmethylpseudoephedrine, 

norpseudoephedrine, 

phenylpropanolamine, and 

pseudoephedrine—were addressed in a 

separate rulemaking (68 FR 23195, May 

1, 2003). Concentration limits for the 

List I chemical iodine, which were 

proposed to be established as part of the 

September 16, 1998 rulemaking, will be 

addressed in a separate rulemaking. 

A concentration limit is established 

for each listed chemical provided in The 

Table. If the concentration of the listed 

chemical is at or below the limit, then 

the mixture will be automatically 

exempted and treated as a non-regulated 

chemical mixture. The Table also gives 

conditions for calculating the 

concentration limit. 

The concentration limits are being 

finalized as proposed, except those for 

the chemicals benzaldehyde, anthranilic 

acid, and phenylacetic acid. The 

concentration limits for these three 

chemicals are being increased from the 

limits which were proposed. 

One comment, which DEA received in 

response to the NPRM, informed DEA 

that there are a significant number of 

chemical mixtures in anthranilic acid 

and phenylacetic acid that could be 

regulated at the proposed concentration 

limit of 20 percent. Since DEA 

determined that these chemical 

mixtures do not pose a significant risk 

of being diverted, the DEA is increasing 

the concentration limit to 50 and 40 

percent for anthranilic acid and 

phenylacetic acid, respectively. The 

comment also suggested increasing the 

concentration limit for benzaldehyde 

from 35 percent to 85 percent. However, 

the DEA determined that chemical 

mixtures containing greater than 50 

percent benzaldehyde are at risk of 

diversion. Therefore, in order to 

Federal Register / Vol. 69, No. 240 / Wednesday, December 15, 2004 / Rules and Regulations 74959

minimize the risk of diversion and 

provide the maximum amount of 

regulatory relief, the concentration limit 

for benzaldehyde is being finalized at 50 

percent (for a discussion see Part II 

Comment Section 11. Exempt 

Formulations Used as Flavor and 

Fragrances). 

b. Exemption by Category 

Two categories that were originally 

proposed as exempt categories of 

chemical mixtures are distributions to 

waste disposal facilities and completely 

formulated paints and coatings. These 

categories may contain chemical 

mixtures that have listed chemical(s) 

above the established concentration 

limits. However, DEA believes that 

chemical mixtures in these categories 

are not likely to be diverted. 

Based on comments to the NPRM, 

DEA modified these categories from 

those originally proposed. The proposed 

category that includes transportation of 

chemical waste has been modified to 

include chemical mixtures intended for 

recycling. Added are distributions to 

waste recycling facilities that have a 

‘‘paper trail’’ as required by the United 

States Environmental Protection 

Agency. 

The category of paints and coatings is 

modified to make it clear that inks are 

included in the category. Inks were 

intended to be included, however, a 

comment pointed out that the inclusion 

of inks could be overlooked under the 

proposed wording. A comment raised 

concern over distributions of multiplecomponent paint systems, which are not 

included in this category because they 

are not completely formulated. The DEA 

agrees that multiple-component paint 

systems are not likely to be diverted in 

domestic and import transactions. DEA 

is introducing an interim rule that 

addresses this concern and provides 

regulatory relief for chemical mixtures 

that are not at risk of diversion (see 

below). 

c. Introduction of A New Category of 

List II Chemical Mixtures as an Interim 

Rule 

Based on comments and DEA’s 

analysis of the potential for diversion, 

this Final Rule also adds a new 

exemption category. Comments 

informed DEA of a significant number of 

distributions that may not be exempt 

under the proposed regulations. DEA 

determined that certain solvent based 

mixtures involving silicon-based 

products, paint-related materials, and 

other solvent-based chemical mixtures 

containing acetone, ethyl ether, 2-

butanone, and toluene are not likely to 

be diverted domestically. These solvent 

chemicals are mostly a concern because 

they are used in cocaine and heroin 

processing, which occurs outside the 

United States. These chemical mixtures 

pose a risk of diversion for international 

transactions for which the requirement 

of 21 U.S.C. 802(39)(A)(v) is not met. 

Therefore, DEA is creating a new 

exemption category for these mixtures. 

Domestic and import transactions in 

chemical mixtures that are regulated 

solely due to the presence of the List II 

solvent chemicals acetone, ethyl ether, 

2-butanone, or toluene are removed 

from the definition of a regulated 

transaction by adding a new paragraph 

to 21 CFR 1310.08. Methyl isobutyl 

ketone, also a List II solvent chemical, 

is not included because domestic and 

import transactions in that chemical 

have already been excluded from the 

definition of a regulated transaction at 

21 CFR 1310.08.

DEA is exempting domestic and 

import transactions in these chemical 

mixtures under 21 CFR 1310.08 

pursuant to 21 U.S.C. 802(39) (A) (iii) 

because regulation of such transactions 

has been determined to be unnecessary 

for the enforcement of the CSA. DEA 

determined that there is not a significant 

risk of domestic diversion for these 

chemical mixtures. However, exports of 

these chemical mixtures could have 

significant potential for diversion. 

Therefore, these chemical mixtures, 

unless otherwise exempt, are subject to 

the export requirements of the CSA. 

Mixtures containing these List II 

chemicals will not qualify for automatic 

exemption if the mixture also contains 

another listed chemical above its 

concentration limit. 

This new exemption (for domestic 

and import transactions in chemical 

mixtures containing the List II 

chemicals acetone, ethyl ether, 2-

butanone, and toluene) was not 

discussed in the original NPRM. 

Therefore, this exemption will be 

implemented on an interim basis with 

opportunity for public comment. DEA is 

soliciting comments only on this 

portion of this final rule. After close of 

this comment period, DEA will publish 

a Final Rule in the Federal Register to 

inform interested persons if changes are 

needed or if this regulation will be 

adopted as written. 

Other Actions Taken in This 

Rulemaking 

In addition, other modifications to the 

original proposed regulations are being 

made. All references to the American 

Society for Testing Materials have been 

removed and the manufacturers are 

being allowed to determine the unit of 

measurement in calculating the 

concentration limit for liquid chemicals. 

These modifications were suggested in 

the comments and DEA agrees that they 

should be implemented. 

Chemical Mixture Issues Not Being 

Addressed in the Rulemaking 

a. Iodine 

DEA received comments that 

chemical mixtures containing seven 

percent iodine are being diverted for the 

illicit manufacture of 

methamphetamine. Methamphetamine 

is an addictive Schedule II controlled 

substance and is the primary controlled 

substance clandestinely produced in the 

United States. It is regarded by DEA as 

a major threat to public health and 

safety. 

DEA proposed a 20 percent 

concentration limit for iodine. This 

proposed amount is consistent with the 

proposed concentration limit for other 

listed chemicals that are used as 

reagents, as is iodine. Prior to the 

publication of the NPRM and while 

DEA was formulating the proposed 

regulations, seven percent iodine 

chemical mixtures were not a concern to 

law enforcement. Although DEA 

theorized that seven percent iodine 

solutions have the potential to be 

diverted, DEA lacked sufficient 

evidence to show that these chemical 

mixtures were being diverted prior to 

establishing the proposed concentration 

limit. 

In addition to information obtained 

from law enforcement, public sources, 

and communication with the regulated 

community, DEA relies on comments to 

the NPRM to help establish regulations. 

DEA was informed that seven percent 

iodine chemical mixtures are being used 

in the illicit manufacture of 

methamphetamine. The proposed 

concentration limit of 20 percent is high 

relative to the concentration of iodine 

contained in mixtures used by 

traffickers. The approach of the 

proposed rule dictates that the 

concentration limit be lowered to assure 

that chemical mixtures desirable to 

traffickers are not automatically exempt. 

Persons who may not have commented 

on the 20 percent concentration limit 

may have comments on this relatively 

lower concentration limit. In order to 

ensure that the public has adequate 

opportunity for comment, the DEA is 

addressing issues relating to the 

regulation of iodine chemical mixtures 

in a separate NPRM. 

b. Ephedrine Alkaloids 

In a separate final rule (68 FR 23195, 

May 1, 2003), DEA finalized those 

portions of the NPRM pertaining to the 

74960 Federal Register / Vol. 69, No. 240 / Wednesday, December 15, 2004 / Rules and Regulations 

six List I chemicals ephedrine, Nmethylephedrine, Nmethylpseudoephedrine, 

norpseudoephedrine, 

phenylpropanolamine, and 

pseudoephedrine. Like the approach 

taken in this rulemaking, that Final Rule 

established a concentration limit for 

each of the above List I chemicals. The 

exempt category of harvested plant 

material was also finalized in that 

rulemaking. 

c. Gamma-butyrolactone (GBL) and 

Phosphorus-Related Compounds 

This rulemaking does not address the 

List I chemicals gamma-butyrolactone 

(GBL), red phosphorus, white 

phosphorus, or hypophosphorous acid 

and its salts. When the NPRM 

‘‘Exemption of Chemical Mixtures’’ was 

published, they were not listed 

chemicals. Therefore, regulations to 

exempt their chemical mixtures were 

not proposed. DEA will address 

provisions concerning GBL and the 

above phosphorus chemicals in separate 

Federal Register publications. 

To that end, on July 19, 2002, DEA 

published an Advance Notice of 

Proposed Rulemaking soliciting 

comments from the regulated industry 

regarding chemical mixtures containing 

GBL (67 FR 47493; corrected at 67 FR 

53842, August 19, 2002; corrected at 67 

FR 56776, September 5, 2002). DEA also 

published an Advance Notice of 

Proposed Rulemaking soliciting 

industry comment regarding chemical 

mixtures containing listed forms of 

phosphorus (68 FR 4968, January 31, 

2003). Based on comments received 

from these publications, DEA will 

develop regulations concerning 

chemical mixtures containing GBL and 

the phosphorus chemicals. 

II. Comments Received Regarding the 

Proposed Regulations 

DEA received fourteen comments in 

response to the NPRM which was 

published September 16, 1998 (63 FR 

49506). Five comments were from 

industry related membership 

organizations, three from law 

enforcement organizations, and the 

remaining from commercial interests. 

Comment Summary 

In general, the comments supported 

efforts by DEA to regulate chemical 

mixtures that have potential use to drug 

traffickers. Some comments requested 

that DEA exempt an additional category 

or increase some concentration limits. 

Comments also suggested that mixtures 

be exempted based on the type of 

distribution. Other comments requested 

clarification or suggested ways to ease 

compliance. 

Specific Comments 

1. Reference to the American Society 

for Testing Materials (ASTM): ASTM is 

a not-for-profit organization that 

develops test methods, and other 

criteria, with application to 130 areas. 

Reference to ASTM was made in the 

NPRM section that proposed the 

exemption of paints/coatings. That 

section stated that a paint/coating 

would be exempt if, among other things, 

it met the ASTM specifications for the 

product. This statement was included to 

help authenticate the product. 

Authenticity is desired by DEA to 

prevent this category from being used by 

traffickers as a loophole. However, DEA 

was informed that such a requirement is 

not practical.

Although the manufacturer can use 

some test methods to insure quality 

control, the methods are not definitive 

in qualifying a product. Not all paints/

coatings are necessarily subject to these 

test methods in order to be marketed as 

an authentic product. 

DEA was also informed that ASTM 

standards are not written to cover all 

applications. Some products can have 

unique applications where ASTM 

standards are not applicable. Therefore, 

in response to the comments, DEA is 

removing all references to the ASTM 

requirement. This action does not alter 

the basic definition of ‘‘completely 

formulated,’’ which determines whether 

such products are automatically exempt. 

2. Request to exempt small container 

transactions: Three persons suggested 

that DEA exempt chemical mixtures 

based on container size. One comment 

requested that DEA consider a 

minimum container volume limit to 

which the rule does not apply. The 

commenter questioned whether the rule 

applies to a 1-ml vial or a 3-ounce tube. 

A second comment suggested that 

mixtures of List II solvents in containers 

of five gallons or less be exempt from 

regulation. A third comment suggested 

that transactions in 55-gallon size 

containers and less should be exempt. 

DEA has considered the request to 

exempt transactions of regulated 

chemicals based on container size. DEA 

determined that traffickers have and 

could divert regulated chemicals if 

packaged in small containers. Therefore, 

an exemption based on container size 

will not be added. 

DEA regulates transactions of 

chemicals that are desirable to 

traffickers, in part, by establishing 

thresholds. Thresholds are established 

so that records do not have to be 

maintained for certain transactions, i.e., 

those below the threshold to a single 

customer within a calendar month. The 

thresholds for export of the List II 

solvent chemicals acetone, ethyl ether, 

2-butanone, methyl isobutyl ketone, and 

toluene are considered large enough that 

distributions in small container sizes are 

not likely to be above the established 

threshold. 

The threshold is meant to allow 

smaller volume distributions without 

the imposition of regulatory controls. 

However, the threshold can be easily 

reached using gallon size containers, 

including five and 55-gallon containers. 

DEA determined that adopting this 

suggestion would result in unlimited 

non-regulated export of chemicals 

desired by traffickers, especially those 

chemicals desired by cocaine traffickers. 

3. Request to adopt a single 

concentration limit for List II chemicals:

Three comments requested that List II 

chemicals be assigned a single 

concentration limit of 35 percent. They 

believed this would allow for better 

compliance and management of 

inventory by simplifying the process. 

DEA proposed that the List II solvent 

chemicals, which have the same basic 

application, be assigned the same 

concentration limit. The chemicals 

acetone, ethyl ether, 2-butanone, methyl 

isobutyl ketone, and toluene all function 

as solvents. These chemicals have been 

identified to be responsible for the 

greatest number of List II chemical 

mixtures, some of which may be 

regulated. This group of chemicals 

already has been assigned a single 

concentration limit of 35 percent. Thus, 

the argument to ease compliance with a 

uniform concentration limit is 

addressed by the single value for these 

chemicals having the same basic 

application. 

The chemicals acetic anhydride and 

benzyl chloride can be considered 

precursors while hydrochloric acid, 

iodine, and sulfuric acid function as 

reagents. Except for iodine, which is 

being addressed in a separate NPRM, 

these are assigned the single 

concentration limit of 20 percent. 

Potassium permanganate, also a reagent, 

is assigned the concentration limit of 15 

percent. The limit is lower for this 

chemical because DEA has not 

identified any legitimately produced 

chemical mixture containing potassium 

permanganate greater than 15 percent. 

After careful consideration, DEA 

decided not to change the concentration 

limit for all List II chemicals to 35 

percent. Concerns regarding compliance 

are mostly addressed because the 

concentration limits are the same for 

List II chemicals that have similar 

functions. In addition, other comments 

Federal Register / Vol. 69, No. 240 / Wednesday, December 15, 2004 / Rules and Regulations 74961

have raised the issue of iodine and 

hydrochloric acid as having application 

to the manufacture of illicit substances 

at a lower concentration than the 

proposed concentration limit. 

4. Request to allow companies to 

choose the unit of measure to calculate 

the percent concentration: Two 

comments suggested that each 

manufacturer should be allowed to 

determine the unit of measurement to 

use when calculating the percent 

concentration. There appears to be no 

commercial standard practice that 

predisposes that a chemical is measured 

by weight or by volume when 

formulating a mixture. These persons 

are concerned about the possible 

administrative impact of forcing 

manufacturers to convert existing and 

extensive records and chemical record 

systems. 

The amount of chemical present in a 

mixture can vary depending on the unit 

used to measure the chemical when 

formulating. Chemicals can be measured 

in units of weight or volume. The 

numerical values of weight and volume 

for chemicals are not usually equal. 

Therefore, a mixture reporting the 

concentrations of a chemical can 

actually contain different amounts of 

the chemical, depending on whether the 

concentration is based on weight or 

volume.

The comments informed DEA that 

some manufacturers might already have 

procedures in place to calculate the 

concentration. They state that 

converting from one unit to another is 

burdensome. DEA has considered this 

and decided that manufacturers should 

determine the unit of measure when 

formulating liquid mixtures. Therefore, 

a formulation containing liquid 

chemicals may have a concentration 

based on the volume or the weight of 

the chemicals contained. 

DEA determined that accurate 

measurement of solids and gases by the 

unit of volume is not practical. 

Therefore, solids and gases should be 

calculated by unit of weight. The ‘‘Table 

of Concentration Limits’’ is being 

amended to reflect this modification. 

5. Request for clarification of issues 

relating to internal transfer and research 

and development: Two persons 

requested clarification on issues of 

internal transfers and research and 

development. A third person asked 

whether research and development 

activities are exempt from this rule. 

Chemical mixtures that do not qualify 

for automatic exemption are regarded 

and treated like listed chemicals. The 

term ‘‘regulated transaction’’ as defined 

in 21 U.S.C. 802(39), excludes ‘‘a 

domestic lawful distribution in the 

usual course of business between agents 

or employees of a single regulated 

person.’’ Therefore, such internal 

transfers are not regarded as regulated 

transactions. However, one must 

understand what a regulated person is 

to understand what transactions are 

regulated. 

The definition of a ‘‘regulated person’’

is given in 21 U.S.C. 802(38) and means 

a person who manufactures, distributes, 

imports, or exports a listed chemical. 

The term ‘‘distribute’’ and ‘‘distributor’’

are defined in 21 U.S.C. 802(11). By 

definition, a distribution occurs when a 

listed chemical is delivered while a 

distributor is the person who makes the 

delivery. 

21 U.S.C. 822(e) requires that each 

site which handles a List I chemical 

must have a separate registration. Each 

registered location is regarded as a 

‘‘regulated person.’’ A distribution of 

List I chemicals between separate 

locations, even if owned by the same 

person, fulfills the definition in 21 

U.S.C. 802(11). Therefore, above 

threshold distributions of List I 

chemicals between separately registered 

sites are regulated transactions as 

defined in 21 U.S.C. 802(39). 

However, different locations that do 

not require separate registration are 

regarded as a single ‘‘regulated person’’

if owned by a single business. Because 

separate site registration for handling 

List II chemicals is not required, 

distributions of List II chemicals 

between sites owned by a single person 

are not regulated transactions. 

The CSA does not include provisions 

that exempt the distribution of listed 

chemicals if associated with research 

and development. If a regulated mixture 

is distributed at or above threshold 

quantities, even for the purpose of 

research and development, the 

transaction is regulated. 

6. Request for publication of Chemical 

Abstract Service numbers for listed 

chemicals: Two persons requested that 

Chemical Abstract Service (CAS) 

numbers be published for listed 

chemicals in the ‘‘Table of 

Concentration Limits.’’ The commenter 

stated that CAS numbers are used 

worldwide by industry and should be 

listed to simplify the identification of 

listed chemicals.

Although the CAS numbers are used 

throughout industry and specific to a 

chemical, DEA believes that publishing 

these numbers in the Code of Federal 

Regulations (CFR) may not be beneficial. 

CAS numbers are specific to a given 

chemical. If a chemical can exist in the 

form of a salt, for example, there is a 

separate CAS number for each form of 

the salt. Several listed chemicals 

include their salts, esters, optical 

isomers, and salts of optical isomers. All 

of these variations have individual CAS 

numbers. DEA believes it is not 

practical to list all such numbers, as the 

list will be extensive and possibly noninclusive. Listing only the CAS numbers 

for the specifically named listed 

chemicals may mislead some to believe 

the list is all-inclusive. Therefore, DEA 

has decided not to publish CAS 

numbers in the CFR. 

7. Request for category exemption of 

multiple-component paint systems: DEA 

proposed the exemption of paints/

coatings only if the product is 

‘‘completely formulated.’’ ‘‘Completely 

formulated’’ is defined in the proposed 

rule as ‘‘only those formulations that 

contain all the components of the paint/

coating for use in the final application 

without the need to add any additional 

substance except possibly a thinner.’’

DEA proposed the exemption of 

completely formulated paints/coatings 

because these products are complex, 

high density mixtures having several 

components, including pigments, 

binders, curing agents, and other 

chemicals in a single system. The 

numerous additives that make up a 

substantial bulk of the formulation deter 

the use of these mixtures in an illicit 

operation. In addition, completely 

formulated paints cure upon exposure 

to air or heat, rendering them unusable 

by traffickers. 

One comment argued that some paints 

actually consist of multiple 

components. Multiple-component paint 

systems consist of one or more separate 

formulations of hardeners, activators, 

catalysts, polymeric material, pigments, 

accelerators, solvents, or other 

components. A single component may 

contain one or more of these ingredients 

mixed, suspended, emulsified, 

dissolved, or somehow formulated into 

a chemical mixture containing a List II 

chemical(s). The List II chemicals are 

typically solvent chemicals in these 

formulations. The components are kept 

separate because once mixed, the paint 

begins to cure. Therefore, they are 

mixed just prior to application. The 

comment claimed that the use of any 

one of these component mixtures in an 

illicit operation is as difficult as using 

a completely formulated paint. 

DEA was informed that multiplecomponent paint systems are a 

predominant technology used in the 

automobile refinishing market. There 

are approximately 60,000 such body 

shops in the United States; each one 

engages in a large number of domestic 

transactions each year. The mixtures 

they utilize may contain one or more of 

the List II solvent chemicals acetone, 

74962 Federal Register / Vol. 69, No. 240 / Wednesday, December 15, 2004 / Rules and Regulations 

ethyl ether, 2-butanone, methyl isobutyl 

ketone, and toluene. 

DEA has not found significant 

examples of diversion of these chemical 

mixtures domestically or through 

imports. However, traffickers in other 

countries have used related 

formulations. Therefore, DEA will 

exempt domestic and import 

distributions of mixtures in the List II 

solvent chemicals acetone, ethyl ether, 

2-butanone, and toluene from the 

definition of ‘‘regulated transaction.’’

Such an exemption for domestic and 

import distributions of methyl isobutyl 

ketone already exists under 21 CFR 

1310.08. 

This exemption will not apply if the 

mixture contains a List I chemical or a 

List II chemical (other than acetone, 

ethyl ether, 2-butanone, methyl isobutyl 

ketone, or toluene) above its established 

concentration limit. This category 

exempts chemical mixtures used by 

different industries, not only those 

associated with paints and coatings. 

Therefore, it will be included separately 

from the category of fully formulated 

paints and coatings. 

This new exemption (for domestic 

and import transactions in chemical 

mixtures containing the List II 

chemicals acetone, ethyl ether, 2-

butanone, and toluene) was not 

discussed in the original NPRM. 

Therefore, this exemption will be 

implemented on an interim basis with 

opportunity for public comment. DEA is 

soliciting comments only on this 

portion of this final rule. Comments 

should be submitted on or before 

January 14, 2005. After close of this 

comment period, DEA will publish a 

notice in the Federal Register to inform 

interested persons if changes are needed 

or if this regulation will be adopted as 

written. 

Although DEA is establishing this 

exemption on an interim basis, an 

alternative means to exempt multiplecomponent paint systems was supplied 

in this comment. It sets a concentration 

limit for both the solid component and 

for the listed chemical(s). The 

commenter suggested that a chemical 

mixture be exempt if it contains at least 

10 percent by weight of solids, 

including resins, polymers, or film 

formers, and less than 65 percent 

cumulative weight of List II solvents. 

Although the above suggestion 

addresses those concerned about 

multiple-component paint systems, it 

may only partially address similar 

concerns of other sectors. Also, a dualexemption criterion that considers both 

the concentration of solids and the 

listed chemical may be confusing and 

difficult for both industry and law 

enforcement to implement. Therefore, 

DEA decided to create a new category, 

as explained above, to exempt a broader 

range of mixtures. The new exempt 

category is easily interpreted and is not 

limited to a single sector but all 

industries that may use these solvents in 

chemical mixtures.

A second comment suggested the 

inclusion of multiple-component paint 

systems in the category of exempt paints 

and coatings. The comment included 

suggested wording that is similar to the 

language proposed by DEA except that 

it includes, in addition to completely 

formulated paints, two-part systems. It 

is anticipated that perceived burdens 

incurred by regulating distributions of 

multiple-component paint systems will 

be addressed via the creation of the 

interim exemption of domestic and 

import transactions of the List II 

solvents discussed above. 

8. Silicone products as exempt 

mixtures: One comment suggested that 

exempt mixtures should include 

silicone related products. These silicone 

products are manufactured for 

downstream customers who produce 

end products and could contain List II 

solvent chemicals. To exempt these 

products, the commenter suggested that 

the mixture meet three criteria: the 

mixture is produced and distributed (1) 

through sophisticated, well-established 

channels; (2) in accordance with 

recognized commercial specifications; 

and (3) for controlled end-use 

applications. 

The comment did not elaborate on 

how to define these criteria or how to 

identify if a product is produced in 

compliance with these criteria. DEA 

concluded that these suggestions 

regarding the exemption of silicone 

products are overly subjective and open 

to interpretation. 

In attempting to identify silicone 

products, DEA learned that silicone 

products cannot be clearly 

distinguished by the chemical content 

alone. Representative formulations 

submitted by this industry show 

concentrations of up to 99 percent listed 

chemical. The example formulations 

contain silicone material from less than 

1 percent to 75 percent while some 

contain no silicone or other solid 

material. These silicone related 

chemical mixtures are similar to the 

multiple component paint systems 

discussed above in relation to their risk 

of diversion. DEA has determined that 

regulation of domestic and import 

transactions are not at significant risk of 

diversion. 

DEA is establishing provisions, on an 

interim basis, to exempt all domestic 

and import transactions in the List II 

chemicals of concern to this industry 

(see above). Some export transactions in 

these mixtures are exempt via the 

established concentration limit. 

Therefore, DEA decided that there is no 

need to take additional action to exempt 

this category because most transactions 

in these mixtures are addressed in the 

interim portion of this rulemaking. 

Because the exemption is on an interim 

basis, this interest, as well as others, 

will have the opportunity to inform 

DEA whether this approach is suitable. 

9. Mixtures intended for recycling:

One comment stated that the exemption 

category that includes distributions of 

waste products to incinerators does not 

include distributions to recycling 

centers. The comment suggested 

including distributions to authorized 

waste recyclers and reprocessors under 

the category of exempt waste material. 

DEA agrees with this comment. 

Waste materials were proposed as an 

exempt category provided there is 

documentation on U.S. Environmental 

Protection Agency (EPA) Form 8700–22 

(Uniform Hazardous Waste Manifest) 

and the waste materials are being 

distributed to another person solely for 

the purpose of disposal by incineration. 

These mixtures include only those that 

are covered by EPA regulations and 

have a ‘‘cradle to grave’’ paper trail. 

Further, the exemption applies only to 

the extent that the Form 8700–22 is 

available for inspection and copying by 

DEA. 

The comment cites Department of 

Transportation (DOT) regulation 49 CFR 

172.205 to show that records are 

required for waste-recovery shipments. 

Examination of this section shows that 

DOT requires the same EPA Form 8700–

22 that was proposed as a requirement 

for exemption of waste product. 

Therefore, the same ‘‘paper trail’’ is in 

place for distributions sent to 

incinerators or to recyclers. DEA agrees 

that distributions to recycling facilities 

should be included in the category that 

exempts distributions to incinerators. 

DEA is amending the language of 

Section 1310.12(d)(2) to expand the 

category to include distribution to 

recyclers as requested in the comment. 

DEA proposed the exemption of 

distributions of waste material provided 

a ‘‘paper trail,’’ which is required by 

another agency, already exists. 

Exemption, if to a recycler or 

incinerator, is contingent on the 

existence of a hazardous waste manifest 

(EPA form 8700–22). It will be the 

generator’s responsibility to maintain 

records if EPA does not already require 

a hazardous waste manifest. 

Although a distribution to a recycling 

facility may not be a regulated 

Federal Register / Vol. 69, No. 240 / Wednesday, December 15, 2004 / Rules and Regulations 74963

transaction, recovering a listed chemical 

from a chemical mixture in a recycling 

process satisfies the term ‘‘manufacture’’

as defined at 21 U.S.C. 802(15). 

However, this is not new to this 

rulemaking. Any person who performs a 

manufacturing operation, including the 

recovery of a listed chemical from a 

chemical mixture, has been bound to 

applicable regulations since their 

inception. 

The comment also expressed concerns 

over distributions that are not required 

to have an EPA Form 8700–22 and, 

therefore, are not automatically exempt 

under this category. DEA decided not to 

categorically exempt all distributions for 

waste recycling or incineration. Such a 

category would include any 

combination of listed and non-listed 

chemical. DEA decided that such an 

exemption category could result in 

diversion of chemicals desirable to 

traffickers. Such distributions shall be 

regulated unless the transactions meet 

other exemption criteria. 

10. Clarification as to whether 

chemical mixtures are included in 21 

CFR Part 1313: One comment requested 

that DEA clarify whether the 

requirements governing the importation, 

exportation, transshipment and intransit shipment of listed chemicals 

pursuant to 21 CFR Part 1313 apply to 

regulated chemical mixtures. 

The commenter asserted that Part 

1313 includes reference to ‘‘listed 

chemicals’’ but does not specifically 

include chemical mixtures. Therefore, 

the commenter concluded, mixtures of 

List II chemicals do not appear to be 

subject to import/export notification 

requirements. 

DEA disagrees. A chemical mixture, if 

not exempt by regulation or the 

application process, is regarded and 

treated as a listed chemical pursuant to 

all provisions of the CSA. This includes 

provisions of 21 CFR Part 1313. 

The term ‘‘regulated transaction’’

means ‘‘a distribution, receipt, sale, 

importation or exportation of, or an 

international transaction involving 

shipment of, a listed chemical, or if the 

Attorney General establishes a threshold 

amount for a specific listed chemical, a 

threshold amount, including a 

cumulative threshold amount for 

multiple transactions * * * of a listed 

chemical * * *’’ (21 U.S.C. 802(39)). 

The term excludes ‘‘any transaction in 

a chemical mixture which the Attorney 

General has by regulation designated as 

exempt * * * based on a finding 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 or 

chemicals contained in the mixture 

cannot be readily recovered’’ (21 U.S.C. 

802(39)(A)(v)). The term ‘‘chemical 

mixture’’ is defined in 21 U.S.C. 802(40) 

as a combination of two or more 

chemicals, at least one of which is not 

a List I or List II chemical.

This rulemaking is finalizing 

regulations that identify those chemical 

mixtures that the Attorney General 

designates as exempt. Outside of those 

exemptions, distributions in chemical 

mixtures, including importation, 

exportation, transshipment, and intransit shipment, are subject to the 

regulatory controls of the CSA that 

pertain to listed chemicals. This 

rulemaking establishes that chemical 

mixtures containing listed chemicals are 

treated as listed chemicals unless 

exempted by regulation. 

11. Request for exemption of 

formulations used as flavors and 

fragrances: One commenter, 

representing both the Flavor and Extract 

Manufacturers Association of the United 

States and the Fragrance Materials 

Association of the United States 

(hereafter referred to as the flavor and 

fragrance industries), gave arguments as 

to why their mixtures should be exempt 

from regulatory controls. The 

commenter suggested that the flavor and 

fragrance industries be exempt by 

category. As an alternative, the 

commenter suggested that the 

concentration limits for benzaldehyde, 

anthranilic acid, and phenylacetic acid 

be increased. 

The commenter stated that an 

industry exemption should be provided 

because of the manner in which the 

flavor and fragrance industry operates. 

The commenter stated that while 

manufacturers work closely with 

customers to develop the necessary 

flavoring or fragrance, routinely their 

formulations are unknown to the 

customer. The commenter asserted that 

traffickers would not know what to 

order because the trafficker would not 

know the mixture’s composition. 

Additionally, the commenter stated that 

these mixtures are expensive because of 

developmental costs and therefore, they 

would not be a practical source of 

precursor chemicals. The commenter 

also stated that these mixtures are not 

sold to the public but only to 

manufacturers of foods and toiletries. In 

addition, the commenter claimed that 

the mixtures are complex formulations 

that make the extraction of listed 

chemicals, or direct use of the mixture 

impractical. 

DEA agrees that legitimately traded, 

expensive, and chemically complex 

chemical mixtures, which are marketed 

under strict self-imposed practices, are 

at a lower risk of diversion. However, 

these conditions may not be universal to 

all that trade in these commodities. 

Therefore, DEA has decided that 

exempting these industries would create 

a loophole for traffickers to divert List 

I chemicals. Under a blanket exemption 

for these industries, any person could 

distribute any listed chemical they use 

without restriction. 

The comment requested that, as an 

alternative to a category exemption, the 

concentration limits for benzaldehyde, 

anthranilic acid, and phenylacetic acid 

be set to 85, 50, and 40 percent, 

respectively. The concentration limits 

for these chemicals were proposed at 35 

percent for benzaldehyde and 20 

percent for anthranilic acid and 

phenylacetic acid. The concentration 

limit for benzaldehyde was proposed 

higher than the 20 percent proposed for 

most other precursor chemicals because 

benzaldehyde was known to be used by 

food flavoring manufacturers in higher 

concentrations than the other chemicals. 

DEA weighed the degree of regulatory 

relief, as indicated in the comment, 

against the risk of diversion for the 

chemicals of concern to these 

industries. Based on the comments and 

an examination of sample formulations, 

DEA concluded that some, but not all, 

of the conditions requested in the 

comment could be put into regulation 

without significantly increasing the risk 

of diversion. 

i. Concentration Limits for Anthranilic 

Acid and Phenylacetic Acid

The commenter indicated that these 

industries’ formulations contain no 

more than 50 and 40 percent of 

anthranilic acid and phenylacetic acid, 

respectively, and that these 

formulations are not at risk of diversion. 

This was the only comment concerned 

with these List I chemicals. DEA has not 

identified these chemicals as being 

important in the formulation of other 

chemical mixtures. Formulations that 

use these chemicals are complex and 

not likely to be diverted. Considering 

these facts, DEA has decided to increase 

the concentration limits for 

benzaldehyde and anthranilic acid to 50 

percent and phenylacetic acid to 40 

percent. 

ii. Increasing the Concentration Limit 

for Benzaldehyde 

The commenter also requested that 

the concentration limit be increased to 

85 percent for benzaldehyde. 

Benzaldehyde is used in clandestine 

operations to make the Schedule II 

controlled substances amphetamine, 

phenyl-2-propanone, and 

methamphetamine. It was once the 

chemical of choice in the synthesis of 

74964 Federal Register / Vol. 69, No. 240 / Wednesday, December 15, 2004 / Rules and Regulations 

methamphetamine. Currently, over 95 

percent of the clandestine laboratories 

seized in the United States are 

methamphetamine laboratories. 

Although the precursor favored in the 

clandestine synthesis of 

methamphetamine has changed, the 

demand for methamphetamine and 

increased controls of the current 

precursor of choice is likely to 

contribute to increased diversion of 

benzaldehyde if it is not carefully 

regulated. 

DEA considered increasing the 

concentration limit for benzaldehyde 

from the proposed 35 percent to the 

suggested 85 percent. However, 

benzaldehyde may be found in simpler 

formulations than those alluded to in 

the comment, either within the 

represented industries or other sectors. 

Increasing the concentration limit will 

impact all sectors of the chemical 

industry, including those conducting 

commerce with the public. Increasing 

the concentration limit to 85 percent 

could result in unrestricted trade in 

exempt mixtures useful to traffickers. 

DEA determined that traffickers would 

seek simpler formulations containing 

benzaldehyde at the suggested 

concentration limit if there are no 

regulatory controls governing their 

distribution. DEA regards an 85 percent 

concentration limit in benzaldehyde to 

be significantly high; such mixtures are 

at risk of diversion. 

DEA re-examined the concentration 

limit for benzaldehyde in light of the 

comment from the flavor and fragrance 

industries and decided that increasing 

the concentration limit to 50 percent 

will not significantly increase the risk of 

diversion. The comment stated that the 

types of formulations containing 

benzaldehyde are as complex as those 

containing anthranilic acid and 

phenylacetic acid. DEA has not 

identified benzaldehyde chemical 

mixtures as being used prominently 

outside the flavor and fragrance 

industry. A 50 percent concentration 

limit is consistent with objectives of this 

regulation. 

DEA recognizes that benzaldehyde is 

important to the food flavoring industry 

and sometimes found in formulations at 

a higher concentration than other List I 

chemicals. However, DEA decided that 

an 85 percent concentration limit is too 

high, especially in light of the fact that 

it is a chemical used in the illicit 

manufacture of methamphetamine, the 

primary illicit controlled substance 

manufactured in the United States. 

The comment also expressed concerns 

regarding the exemption application 

process (Section 1310.13) and claimed 

that the application process is an 

impractical means to exempt these 

formulations because hundreds or 

thousands of new formulations are 

produced monthly and formulations are 

altered continuously. In addition, the 

industry resists revealing their 

formulations as required in the 

application, because they are closely 

guarded trade secrets.

There should be no concern over the 

need to reapply for each change in 

formulation or revealing details about a 

formulation. The application process is 

written to alleviate the need to reapply 

every time a formulation changes. A 

group of mixtures may be exempted 

within a single application. 

Formulations having identical function 

and containing the same listed 

chemical(s) can be part of the same 

group. However, not all formulations are 

required to have the same non-listed 

chemicals to be included in a group. 

This approach will eliminate the need 

for persons to reapply every time a 

formulation changes. 

DEA will allow for partial disclosure 

in the application process of a complex 

chemical formulation. DEA has learned 

that formulations used by the food and 

flavoring industries sometimes contain 

several chemicals at a concentration of 

less than one-percent. DEA will accept 

an application without the need to 

reveal each chemical present at less 

than one-percent. DEA will work with 

the applicant to obtain enough 

information to make a decision while 

minimizing the amount of detail 

necessary to process the application. 

DEA notes that information 

designated as confidential or proprietary 

will be treated accordingly. The release 

of confidential business information 

that is protected from disclosure under 

Exemption 4 of the Freedom of 

Information Act, 5 U.S.C. 552(b)(4), is 

governed by section 310(c) of the CSA 

(21 U.S.C. 830(c)) and the Department of 

Justice procedures set forth in 28 CFR 

16.7. DEA has a longstanding history of 

protecting such information from 

unauthorized disclosure. 

12. Comment stating that mixtures of 

List II solvent chemicals are useful to 

traffickers regardless of the 

concentration of listed chemical: One 

comment pointed out how chemical 

mixtures containing List II solvent 

chemicals can be useful to traffickers 

regardless of the concentration. The List 

II solvent chemicals are acetone, ethyl 

ether, 2-butanone, methyl isobutyl 

ketone, and toluene. They are referred to 

as solvent chemicals because they are 

liquids generally used to dissolve 

substances. 

The comment argues that mixtures of 

these chemicals will have the same 

chemical properties that make the pure 

List II solvent chemicals desirable to 

traffickers. The reason for this is that 

different liquids are miscible (i.e. 

susceptible of being mixed) if they have 

similar chemical properties that are 

related to their behavior as solvents. The 

commenter stated that if they mix, the 

resultant blend must have chemical 

properties similar to the pure List II 

solvent chemical, otherwise, they would 

not mix in the first place. Therefore, the 

blend could possibly dissolve whatever 

the listed chemical could dissolve. 

Likewise, if the solvent properties of 

different liquids are dissimilar they may 

not mix when brought together. 

A well-known example of this 

behavior is that of oil and water. The 

solvent properties for oil and water are 

different. Oil dissolves different 

substances than water. When brought in 

contact, they form separate layers. 

However, mixing water with vinegar, for 

example, causes the two liquids to 

blend as one. They have similar solvent 

properties. The resulting blend would 

be expected to dissolve whatever the 

water would dissolve. 

The commenter stated that the same 

is true for the List II solvent chemicals. 

Mixing them with other liquids may 

cause separation or result in a single 

blend. If they blend, it means that the 

mixture has some liquid properties that 

are similar to the listed solvent 

chemical. However, the resultant blend 

is not exactly the same as the pure listed 

chemical. 

DEA agrees with the comment in 

principle. However, the higher the 

concentration of listed chemical(s), the 

more likely it will be that the blend will 

more closely mimic the properties of the 

listed chemical(s). This means that not 

all mixtures containing List II chemical 

solvents are equally likely to be used in 

illicit laboratories. Thus, regulating all 

mixtures that contain any amount of a 

List II solvent chemical is unnecessary 

to reasonably prevent diversion. 

Further, solvent chemicals are mostly a 

concern because they are used in 

cocaine and heroin processing, which 

occurs outside the United States. 

Therefore, instead of regulating all 

chemical mixtures containing List II 

solvent chemicals, DEA will exempt all 

such domestic and import transactions 

containing the List II solvents acetone, 

ethyl ether, 2-butanone, and toluene 

from the definition of regulated 

transaction as discussed earlier. The List 

II chemical methyl isobutyl ketone is 

not included here because its 

transactions are already excluded. 

Because a chemical mixture regulated 

due to the presence of a List II solvent 

chemical is expected to mimic the 

Federal Register / Vol. 69, No. 240 / Wednesday, December 15, 2004 / Rules and Regulations 74965

solvent properties of the listed 

chemical, the threshold will be 

calculated based on the amount of the 

entire mixture and not just the amount 

of listed chemical in the mixture. 

13. Comment stating that traffickers 

can use twenty-percent solutions of 

hydrochloric acid or sulfuric acid: One 

comment mentioned that both 

hydrochloric and sulfuric acids are used 

to isolate methamphetamine. For this 

purpose, a 20 percent solution of either 

is sufficient to carry out an illicit 

manufacturing operation. 

In response, DEA notes that domestic 

and import transactions in these acids 

have been excluded from the definition 

of regulated transactions pursuant to 21 

CFR 1310.08. Only transactions to 

designated countries identified in that 

section are defined as regulated 

transactions. Those provisions also 

apply to mixtures of these chemicals. 

DEA notes that acids dissolved in water, 

alcohol solutions, or other pure 

solvents, are not regarded as chemical 

mixtures. Therefore, DEA decided not to 

lower the concentration limit for these 

acids.

14. Comment stating that 

multifunctional formulations containing 

sulfuric acid should be an exempt 

category: One comment requested that 

formulations containing sulfuric acid 

should be exempt when used in 

industrial applications. DEA regards 

this category as too broad and, if 

enacted, will create a loophole for 

unscrupulous persons to traffic in 

mixtures of sulfuric acid that could be 

used in illicit laboratories. Therefore, 

DEA has determined that this category 

is inappropriate for exemption. 

These types of mixtures, if not useful 

to traffickers, may be exempt pursuant 

to Section 1310.13 (i.e. the application 

process). Several such mixtures may be 

exempt as a group under a single 

application, provided the different 

formulations have the same basic 

function. DEA notes that domestic 

transactions in sulfuric acid and, 

therefore, its mixtures, are not regarded 

as regulated transactions pursuant to 

Section 1310.08(a). Section 1310.08(b) 

regulates only above threshold 

transactions to certain designated 

countries. In addition, if a person 

consumes a chemical mixture, then that 

person is an end user. End users are not 

regarded as regulated persons and are 

not subject to chemical regulatory 

controls. 

15. Comment expressing concern that 

iodine concentration limit is high and 

does not capture mixtures being used by 

traffickers: One comment believes that 

the proposed rule does not adequately 

address the regulation of iodine. The 

DEA has decided to address iodine 

issues under separate rulemaking. 

The comment points out that the most 

common method for the production of 

methamphetamine on the West Coast 

utilizes seven-percent iodine solution. 

The comment states that non-traditional 

customers purchasing large quantities of 

seven-percent iodine solution have 

inundated retailers in Oregon, 

Washington, California, and Louisiana. 

Another comment stated that 

clandestine laboratories often use either 

iodine crystals or a seven-percent iodine 

tincture as a source for iodine crystals. 

Seven-percent iodine solution and 

tincture are regarded as chemical 

mixtures subject to this final rule but are 

a viable source of iodine crystals. Iodine 

crystals can be readily extracted from 

these chemical mixtures and used in the 

illicit manufacture of methamphetamine 

or amphetamine. DEA agrees that 

regulatory action is necessary to prevent 

the illicit use of iodine readily obtained 

from these sources. 

At the time that the NPRM was being 

drafted, the DEA did not regard iodine 

chemical mixtures as an important 

source of iodine crystals. Since 

publication of the NPRM, the use of 

iodine chemical mixtures as a source for 

iodine crystals increased dramatically. 

The El Paso Intelligence Center (EPIC) 

maintains a database on clandestine 

laboratories seized by Federal, State, 

and local law enforcement agencies. 

Although the database does not account 

for all seizures in clandestine 

laboratories, it serves as an indicator of 

what is being used by traffickers. 

In 1998, the year in which the NPRM 

was published, EPIC reported 10 

incidences of iodine tincture out of 

1,485 for all sources of diverted iodine 

found in illicit methamphetamine 

laboratories. In 1999, 2000, 2001, and 

2002, the number of iodine tincture 

seizures compared to the number of all 

forms of diverted iodine reported by 

EPIC is 71 out of 2,888; 397 out of 3,432; 

1,147 out of 4,734; and 1,619 out of 

4,921, respectively. These statistics 

show that iodine tincture is a significant 

source of iodine crystals for the illicit 

manufacture of methamphetamine. 

Based on the comments to the NPRM 

and the documented diversion of certain 

chemical mixtures containing iodine, 

the DEA determined that the proposed 

concentration limit for iodine is 

relatively high compared to the 

concentration found in chemical 

mixtures useful to traffickers. To 

address adequately the diversion of 

iodine, DEA must consider new 

approaches other than what was 

proposed. Therefore, the regulation of 

iodine chemical mixtures is being 

addressed in a separate NPRM. This will 

give persons an opportunity to comment 

on any approach DEA suggests. 

16. Request for exemption of crime 

labs from quantitative analysis of 

mixtures: One comment stated that city 

and county laboratories in California 

perform qualitative analysis for only 

controlled substances. The commenter 

requested that local crime laboratories 

be exempt from requirements to analyze 

the contents of non-controlled 

substances or reporting of mixtures. 

DEA has no role in determining such 

policy. How state and local crime 

laboratories handle their analysis is 

based on their own policy. Because this 

rulemaking does not impose mandatory 

testing, exemption is not necessary. 

17. Request for exemption of adhesive 

intermediates under the category of 

paints/coatings: One comment 

questioned whether solutions that are 

intermediates for the manufacture of 

adhesives are exempt under the category 

of paints and coatings. These adhesive 

intermediates are formulated as a 

vehicle for further additions of chemical 

ingredients that will eventually form an 

adhesive. DEA determined that if these 

solvent mixtures contain listed 

chemicals above the concentration limit, 

they are regarded as regulated 

chemicals. They are not ‘‘fully 

formulated’’ as required to be exempt 

under the category of paints and 

coatings and, therefore, not 

automatically exempt. 

DEA decided not to exempt all 

chemical mixtures that are used to form 

adhesives because that would include 

solvent systems containing listed 

chemicals in any concentration. 

Unscrupulous persons could then 

distribute solvent blends rich in List II 

chemicals to traffickers unchecked. 

Adhesive mixtures that contain listed 

chemicals are regarded as exempt when 

they are completely formulated and 

have less risk of diversion. If not 

exempt, distributions are regulated only 

if distributed at or above threshold 

quantities.

DEA does not impose recordkeeping 

or reporting requirements for listed 

chemicals that are consumed in a 

manufacturing process (21 CFR 

1310.03(a)). If the blend is converted to 

an adhesive on-site, then transactions in 

it are not regulated and, because the 

listed chemical is consumed, 

recordkeeping and reporting 

requirements are not required. In 

addition, as stated previously, DEA is 

exempting, on an interim basis, 

domestic and import transactions of 

mixtures containing the List II solvent 

chemicals that are a concern to this 

interest. 

74966 Federal Register / Vol. 69, No. 240 / Wednesday, December 15, 2004 / Rules and Regulations 

18. Inks as part of the category of 

paints and coatings: One comment 

requested the inclusion of inks in the 

category of paints and coatings by 

changing the category to paints, 

coatings, and inks. The commenter 

expressed concerns that the public will 

not recognize inks as being within the 

category of paints and coatings. 

DEA recognizes that inks may be 

overlooked within Section 

1310.12(d)(2), which identifies the 

category of paints and coatings as being 

exempt chemical mixtures. It was the 

intention of DEA to have inks included 

in this category. The preamble of the 

original NPRM (63 FR 49510) states that 

completely formulated inks are 

included in this category. 

DEA determined that adding inks as 

a new category in addition to the 

existing category of paints and coatings 

is not appropriate. Inks are already 

included within the category of 

coatings. This situation will be 

corrected by adding a sentence to 

section 1310.12(d)(3): ‘‘Included in this 

category are clear coats, topcoats, 

primers, varnishes, sealers, adhesives, 

lacquers, stains, shellacs, inks, and 

temporary protective coatings.’’ In this 

way, all products intended to be 

included in the category of paints and 

coatings will be apparent. 

19. Request for allowance of a 

concentration variation of 2 percent 

absolute and 10 percent nominal: One 

comment suggested that DEA allow a 

plus or minus concentration range of 10 

percent nominal and 2 percent absolute 

rather than require a new application for 

exemption for each and every mixture. 

This range is to reflect variation in raw 

material and inaccuracies in the 

manufacturing process. 

The exemption application process 

already allows for a range of 

concentrations without the need to 

reapply, as long as this concentration 

range is specified in the approved 

application. Therefore, the suggested 

variation is not necessary to prevent the 

need for reapplication. (Please note, 

however, that any concentration greater 

than the established range for 

exemption would cause the mixture to 

be subject to the regulatory provisions of 

the CSA.) 

For non-exempt mixtures, the 

concentration limit (as specified in the 

Table of Concentration Limits) is 

established as a maximum 

concentration of listed chemical that a 

chemical mixture may contain to be 

automatically exempt. Mixtures 

containing more than this established 

limit are regarded by DEA as regulated 

chemicals. Manufacturers that produce 

chemical mixtures having the listed 

chemical near the concentration limit 

are responsible for knowing whether the 

actual concentration exceeds the limit. 

III. Final Regulatory Actions: 

Individual Discussion for Each Listed 

Chemical 

1. Chemical Mixtures Containing List I 

Chemicals 

List I chemicals compose the largest 

number of listed chemicals, but only a 

few have been identified that are 

routinely used in chemical mixtures. 

Mixtures containing those List I 

chemicals are utilized by a small 

number of industries. DEA identified 

food flavoring manufacturers, fragrance 

manufacturers, and a segment of the 

dietary supplements industry as the 

main commercial sectors that utilize 

mixtures containing List I chemicals. 

The food flavoring and fragrance 

manufacturing sectors handle most 

chemical mixtures containing List I 

chemicals being addressed in this 

rulemaking. The chemicals of concern 

to these interests, at the proposed 

concentration limits, are benzaldehyde, 

anthranilic acid, and phenylacetic acid. 

None of the remaining List I chemicals 

were mentioned in the comments, 

except those associated with some 

dietary supplements. The comments 

pertaining to dietary supplements 

containing Ephedra were addressed in a 

separate final rule (68 FR 23195, May 1, 

2003). 

Only one comment addressed issues 

relating to the List I chemicals 

benzaldehyde, anthranilic acid, and 

phenylacetic acid. This comment was 

submitted by an industry group 

representing both the Flavor and Extract 

Manufacturers Association of the United 

States and the Fragrance Materials 

Association of the United States (food 

flavoring and fragrance manufacturing 

sectors). 

DEA originally proposed 

concentration limits of 35 percent for 

benzaldehyde, and 20 percent for 

anthranilic acid and phenylacetic acid. 

The concentration limit for 

benzaldehyde was proposed higher than 

the 20 percent proposed for most other 

precursor chemicals because DEA was 

aware that the food flavoring 

manufacturers used benzaldehyde in 

complex formulations not likely to be 

diverted. The comment from this 

interested party expressed the opinion 

that their formulations are not likely to 

be diverted even if the concentration 

limits for benzaldehyde, anthranilic 

acid, and phenylacetic acid are set at 85 

percent, 50 percent, and 40 percent, 

respectively.

After a thorough review of the 

comments, DEA is finalizing 

concentration limits of 50 percent for 

benzaldehyde, 50 percent for anthranilic 

acid and 40 percent for phenylacetic 

acid. The DEA concluded that chemical 

mixtures containing lower 

concentrations of these chemicals do 

not present a significant risk of 

diversion. (For a discussion on what 

DEA considered in order to exempt this 

interest, see under Comments.) 

This concentration limit is expected 

to exempt the majority of List I chemical 

mixtures identified by DEA. Most, if not 

all, mixtures in anthranilic acid and 

phenylacetic acid are expected to be 

exempt because available products are 

formulated whereby they are not useful 

to traffickers. 

No comments were received 

concerning other List I chemicals being 

addressed in this rulemaking. Therefore, 

DEA concludes that the concentration 

limits proposed for the remaining List I 

chemicals are not a major concern to 

industry. Finalizing regulations based 

on the proposed concentration limits for 

these chemicals is not expected to 

increase significantly the number of 

new registrants. Chemical mixtures that 

do not qualify for automatic exemption 

can be considered for exemption based 

on the application process (21 CFR 

1310.13; finalized at 68 FR 23195). 

2. Chemical Mixtures Containing List II 

Chemicals 

The List II chemicals being addressed 

in this rulemaking are acetone, ethyl 

ether, 2-butanone (methyl ethyl ketone), 

methyl isobutyl ketone, toluene, acetic 

anhydride, benzyl chloride, 

hydrochloric acid, sulfuric acid, 

potassium permanganate, and iodine. 

The first five chemicals are used as 

solvents and, based on the comments, 

are responsible for the majority of 

chemical mixtures addressed by this 

rulemaking. The chemicals acetic 

anhydride and benzyl chloride have 

limited use as solvents and have not 

been the subject of any comment. The 

remaining List II chemicals are reagents. 

DEA received comments on iodine, 

hydrochloric acid, and sulfuric acid. 

Iodine is being addressed under a 

separate rulemaking. The types of 

mixtures containing the remaining 

chemicals are limited and will not 

significantly add to the number of 

newly regulated transactions. There 

were no comments received for 

mixtures containing potassium 

permanganate. 

a. The List II Solvent Chemicals 

The List II solvent chemicals acetone, 

ethyl ether, 2-butanone, methyl isobutyl 

Federal Register / Vol. 69, No. 240 / Wednesday, December 15, 2004 / Rules and Regulations 74967

ketone, and toluene are mostly a 

concern to DEA because of their use in 

the illicit production of cocaine. 

Suspicious shipments of mixtures 

containing List II solvents to cocaine 

producing areas have been identified by 

DEA. Additionally, diversion of 

chemical mixtures for the illicit 

production of cocaine in foreign 

countries has been established by DEA. 

DEA continually monitors the 

chemical composition of seized cocaine 

hydrochloride samples. The DEA 

laboratory system is able to detect the 

trace quantities of solvents present in 

seized cocaine hydrochloride, which is 

a ‘‘street form’’ of cocaine. Such 

solvents are utilized in the final stage of 

cocaine production whereby cocaine 

base is converted to cocaine 

hydrochloride. Recent data indicates 

that a broader range of solvents and 

solvent combinations are being used in 

cocaine processing. This laboratory data 

supports intelligence information that 

chemical mixtures are used in the illicit 

production of cocaine hydrochloride. 

DEA is aware of chemical mixtures 

containing List II solvent chemicals and 

solid material. The solids may be 

dissolved, suspended, emulsified, or in 

some way formulated into the liquid 

component. These mixtures are used by 

different industries to formulate 

silicones, paints, adhesives, polymers, 

and various related materials. DEA 

realizes that, in general, mixtures 

formulated with solids will not likely be 

used ‘‘as is’’ in the production of a 

controlled substance, including cocaine. 

However, recovery of the listed 

chemical (e.g., distillation) may allow 

the mixture to be used by traffickers. 

Traffickers, especially those involved in 

the illicit production of cocaine, are 

known to recycle solvents by 

distillation. 

After considering all comments, DEA 

has decided to exempt domestic and 

import transactions of all mixtures 

containing acetone, ethyl ether, 2-

butanone, and toluene, unless they 

contain other listed chemicals above the 

concentration limit. 

Since the NPRM did not discuss this 

exemption for domestic and import 

transactions, the public did not have the 

opportunity to comment on the 

exclusion of these transactions from the 

definition of a regulated transaction. To 

avoid unnecessary burdens on affected 

companies during the pendency of 

proceedings in this matter, DEA has 

decided to implement this exemption 

on an interim basis, with a request for 

comments. DEA will then publish a 

final rulemaking regarding this 

exemption after a review of such 

comments. (See Section V for further 

discussion of this interim exemption). 

Because of their identified potential for 

use in illicit cocaine production, as 

discussed above, this rulemaking will 

not automatically exempt by regulation 

export transactions in these mixtures. 

b. The List II Chemicals Hydrochloric 

Acid and Sulfuric Acid

Distributions of hydrochloric acid 

(except domestic distributions of 

anhydrous hydrogen chloride) and 

sulfuric acid are regulated only as 

exports to certain geographical regions. 

Domestic transactions in sulfuric acid 

and hydrochloric acid (except 

anhydrous hydrogen chloride) are 

excluded from the recordkeeping and 

reporting requirements of the CSA 

pursuant to 21 CFR 1310.08(a). 

Therefore, their chemical mixtures are 

also excluded. 

Anhydrous hydrogen chloride, which 

is regulated domestically, has not been 

identified as part of any chemical 

mixture. These chemicals are used in 

synthetic chemistry and to stabilize 

materials in solution, both in legitimate 

industries and illicit operations. 

Formulations of sulfuric acid have been 

identified that are used in papermaking, 

treatment of industrial water cooling 

systems, and for treating oil wells. 

Although one comment informed 

DEA that chemical mixtures at the 

proposed concentration limit of 20 

percent for hydrochloric acid could be 

used in the illicit production of 

methamphetamine, DEA is not lowering 

this concentration limit. 

Methamphetamine production is mostly 

a domestic concern while domestic 

transactions in hydrochloric acid are not 

regulated. 

DEA regards any concentration of 

hydrogen chloride dissolved in an inert 

carrier, such as water or alcohol, as a 

regulated chemical under the heading of 

hydrochloric acid. The 20 percent 

concentration limit pertains to 

hydrochloric acid mixed with an 

additional non-listed chemical. The 

concentration limit is determined by 

taking the weight of hydrogen chloride 

in the mixture and does not include the 

weight of the carrier solvent. 

DEA received only one comment on 

mixtures containing sulfuric acid. Only 

exports to South American countries 

and Panama above threshold are 

regulated transactions. The comment 

did not state if their mixtures are for 

export to these specific regions. The 

mixtures, as described in the comment, 

may be suitable for a group exemption 

by the application process. DEA 

concludes that newly regulated 

mixtures containing hydrochloric acid 

or sulfuric acid will be minimal at the 

concentration limits proposed. 

c. The List II Reagent Chemicals Iodine 

and Potassium Permanganate 

Iodine and potassium permanganate 

are List II chemicals that function as 

reagents. Reagents are chemicals that 

cause, or help to cause, a chemical 

reaction to occur. Iodine and potassium 

permanganate are important in 

methamphetamine and cocaine 

production, respectively. 

Iodine is found in a variety of 

formulations. Strong iodine solution 

and strong iodine tincture contain 

seven-percent iodine and are regarded 

as chemical mixtures. DEA proposed a 

20 percent concentration limit for 

iodine but was informed, by comment, 

that seven-percent solutions are being 

diverted for their iodine content. In 

addition, DEA has documented the use 

of seven-percent iodine mixtures as a 

source for iodine crystals in clandestine 

methamphetamine production. 

Chemical mixtures containing iodine 

are being addressed under a separate 

NPRM to allow adequate comment on 

the regulation of iodine desirable to 

traffickers. 

DEA has not identified mixtures of 

potassium permanganate being diverted 

for illicit drug production or being 

formulated in a concentration greater 

than the proposed 15 percent. DEA has 

determined that legitimately produced 

chemical mixtures containing less than 

15 percent potassium permanganate do 

not have a significant potential for 

diversion. Therefore, the concentration 

limit for potassium permanganate was 

proposed to be 15 percent. No 

comments were received to suggest that 

there are any chemical mixtures 

containing greater than 15 percent 

potassium permanganate.

d. The List II Precursor Chemicals 

Acetic Anhydride and Benzyl Chloride 

The List II chemicals acetic anhydride 

and benzyl chloride may be regarded as 

precursor chemicals. Precursors are 

substances that are chemically modified 

to become part of the final product. 

Acetic anhydride is important in the 

production of heroin while benzyl 

chloride can be used to make 

methamphetamine. These chemicals 

also have limited use as solvents. No 

comments were received regarding these 

chemicals and DEA has not identified 

them as being routinely used in 

chemical mixtures. The concentration 

limit for acetic anhydride and benzyl 

chloride was proposed to be 20 percent 

and is being finalized at the 20 percent 

limit. 

74968 Federal Register / Vol. 69, No. 240 / Wednesday, December 15, 2004 / Rules and Regulations 

IV. Final Rule Provisions 

a. Specific Requirements That Will 

Apply to Regulated Chemical Mixtures 

Containing List I Chemicals Upon 

Publication of This Final Rule 

A chemical mixture that is regulated 

because it contains a List I chemical will 

be treated as a List I chemical. 

Transactions that meet or exceed the 

cumulative monthly threshold for the 

listed chemical shall be regulated 

transactions. Persons interested in 

handling a regulated mixture must 

comply with the following: 

Registration. Any person who 

manufactures or distributes a regulated 

mixture, or proposes to engage in the 

manufacture or distribution of a 

regulated mixture containing a List I 

chemical, shall obtain a registration 

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

Regulations describing registration for 

list I chemical handlers are set forth in 

21 CFR part 1309. 

Separate registration is required for 

retail distribution, non-retail 

distribution, importing, and exporting. 

A separate registration is required for 

each principal place of business at one 

general physical location where List I 

chemicals are distributed, imported, or 

exported by a person (21 CFR 1309.23). 

Effective February 14, 2005, any person 

distributing, importing, or exporting any 

amount of a regulated mixture will 

become subject to the registration 

requirement under the CSA. DEA 

recognizes, however, that it is not 

possible for persons who are subject to 

the registration requirement to 

immediately complete and submit an 

application for registration and for DEA 

to immediately issue registrations for 

those activities. Therefore, in order to 

allow continued legitimate commerce in 

regulated mixtures, DEA is establishing 

in 21 CFR 1310.09 a temporary 

exemption from the registration 

requirement for persons desiring to 

engage in activities with regulated 

mixtures that are subject to registration 

requirements, provided that DEA 

receives a properly completed 

application for registration on or before 

February 14, 2005. The temporary 

exemption for such persons will remain 

in effect until DEA takes final action on 

their application for registration. 

Any person whose application for 

exemption is subsequently rejected by 

DEA must obtain a registration with 

DEA. A temporary exemption from the 

registration requirement will also be 

provided for these persons, if DEA 

receives a properly completed 

application for registration on or before 

30 days following the date of official 

DEA notification that the application for 

exemption has not been approved. The 

temporary exemption for such persons 

will remain in effect until DEA takes 

final action on their registration 

application. 

The temporary exemption applies 

solely to the registration requirement; 

all other chemical control requirements, 

including recordkeeping and reporting, 

are effective on January 14, 2005. 

Therefore, all transactions of the 

chemical mixture will be regulated, if at 

or above threshold, while an application 

for registration or exemption is pending. 

This is necessary because not regulating 

these transactions could result in 

increased diversion of chemicals 

desirable to drug traffickers. 

Additionally, the temporary 

exemption does not suspend applicable 

federal criminal laws relating to the 

regulated mixture, nor does it supersede 

state or local laws or regulations. All 

handlers of a regulated mixture must 

comply with applicable state and local 

requirements in addition to the CSA 

regulatory controls. 

Records and Reports. The CSA (21 

U.S.C. 830) requires certain records to 

be kept and reports to be made 

involving listed chemicals. Regulations 

describing recordkeeping and reporting 

requirements are set forth in 21 CFR 

1310. A record must be made and 

maintained for two years after the date 

of a regulated transaction involving a 

List I chemical. Only a distribution, 

receipt, sale, importation, or exportation 

of a regulated mixture at or above the 

established threshold is a regulated 

transaction (21 CFR 1300.02(b)(28)). 

Each regulated bulk manufacturer of a 

regulated mixture shall submit 

manufacturing, inventory and use data 

on an annual basis (21 CFR 1310.05(d)). 

Bulk manufacturers producing the 

mixture solely for internal consumption, 

e.g., formulating a non-regulated 

mixture, are not required to submit this 

information. Existing standard industry 

reports containing the required 

information are acceptable, provided the 

information is readily retrievable from 

the report. 

21 CFR 1310.05 requires that each 

regulated person shall report to DEA 

any regulated transaction involving an 

extraordinary quantity, an uncommon 

method of payment or delivery, or any 

other circumstance that causes the 

regulated person to believe that the 

listed chemical will be used in violation 

of the CSA.

Security: All applicants and 

registrants shall provide effective 

controls against theft and diversion of 

chemicals as described in 21 CFR 

1309.71. 

Imports/Exports. All import/exports 

and brokered transactions of regulated 

mixtures shall comply with the CSA (21 

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

importation and exportation of List I 

chemicals are described in 21 CFR 1313. 

Separate registration is necessary for 

each activity (21 CFR 1309.22). 

Administrative Inspection. Places, 

including factories, warehouses, or 

other establishments and conveyances, 

where regulated persons may lawfully 

hold, manufacture, or distribute, 

dispense, administer, or otherwise 

dispose of a regulated mixture or where 

records relating to those activities are 

maintained, are controlled premises as 

defined in 21 CFR 1316.02(c). The CSA 

(21 U.S.C. 880) allows for administrative 

inspections of these controlled premises 

as provided in 21 CFR 1316 Subpart A. 

b. Specific Requirements That Will 

Apply to Regulated Chemical Mixtures 

Containing List II Chemicals Upon 

Publication of This Final Rule 

A chemical mixture that is regulated 

because it contains a List II chemical 

will be treated as a List II chemical. 

Transactions that meet or exceed the 

cumulative monthly threshold for the 

listed chemical shall be regulated 

transactions. The regulatory 

requirements for regulated chemical 

mixtures containing List II chemicals 

are the same as for regulated chemical 

mixtures containing List I chemicals, 

except that registration requirements do 

not apply. Therefore, the same 

requirements for records and reports, 

imports/exports (except that pertaining 

to 21 U.S.C. 957), and administrative 

inspection, as outlined above, apply to 

handlers of List II regulated chemical 

mixtures. 

Persons who submit an application 

for exemption (Section 1310.13) and 

whose application is pending or 

subsequently rejected by DEA must 

comply with all chemical control 

requirements, including recordkeeping 

and reporting, effective on January 14, 

2005. Therefore, all transactions of the 

chemical mixture will be regulated, if at 

or above threshold, while an application 

for exemption is pending or awaiting 

correction. This is necessary because 

not regulating these transactions could 

result in increased diversion of 

chemicals desirable to drug traffickers. 

c. Persons Affected by This Final Rule 

This rulemaking will affect only 

persons who manufacture, distribute, 

import, or export chemical mixtures 

containing listed chemicals that DEA 

determined are useful to traffickers for 

the illicit production of controlled 

substances. DEA received comments on 

Federal Register / Vol. 69, No. 240 / Wednesday, December 15, 2004 / Rules and Regulations 74969

only a few specific listed chemicals. 

Therefore, DEA concludes that the 

concentration limits proposed in the 

NPRM for the remaining majority of 

listed chemicals were acceptable to 

chemical handlers. 

The goal of this rulemaking is to deny 

traffickers unregulated access to useful 

chemical mixtures while minimizing 

the burden on legitimate industry. This 

final rule seeks to target those chemical 

mixtures having the greatest potential 

for illicit use. 

Comments to the NPRM informed 

DEA of ways to provide additional 

regulatory relief to the affected industry. 

DEA determined that some of these 

suggested changes would not 

compromise law enforcement 

objectives. Based on this new 

information, this final rule exempts the 

vast majority of potentially regulated 

chemical mixtures without 

compromising the needs of law 

enforcement. Certain chemical mixtures 

that are a concern to the paints and 

coatings industries, the food flavoring 

industries, fragrance manufacturers, the 

silicone industries, ink manufacturers, 

and others are being identified by 

regulation as exempt from CSA 

regulatory controls. Because DEA is able 

to adjust some of its proposed 

regulations based on information 

received in the comments, those persons 

who trade in chemical mixtures 

containing listed chemicals should be 

minimally impacted or not affected at 

all by this rulemaking. 

Of those persons whose mixtures are 

regulated, only those who distribute 

above the threshold for the listed 

chemical(s) are regulated transactions 

(21 U.S.C. 802(39)(A)). A threshold is a 

quantity of chemical, as specified in 21 

CFR 1310.04. Distributions at or above 

the specified threshold amount are 

regulated transactions. Thresholds are 

determined by totaling the amount of 

chemical in all distributions to the same 

person within a calendar month. 

Persons who obtain a regulated 

chemical but do not distribute the 

chemical are end users. End users are 

not subject to CSA chemical regulatory 

control provisions such as registration 

or recordkeeping requirements. Some 

examples of end users are those who 

chemically react the listed chemical and 

change it into a non-listed chemical or 

formulate it into an exempt chemical 

mixture. 

V. Exemption Authority 

The CSA authorizes DEA, pursuant to 

21 U.S.C. 802(39)(A)(iii), to remove 

certain transactions in listed chemicals 

from the definition of a regulated 

transaction that are unnecessary for 

enforcement of the CSA. Based on 

comments to the Federal Register

proposed rule ‘‘Exemption of Chemical 

Mixtures’’ (63 FR 49506), DEA 

identified certain transactions in 

mixtures of acetone, ethyl ether, 2-

butanone, and toluene that are unlikely 

sources for diversion. DEA was 

informed that tens of thousands of 

domestic transactions in these chemical 

mixtures occur annually. DEA has 

determined that the regulation of 

domestic and import transactions in 

mixtures containing the chemicals 

acetone, ethyl ether, 2-butanone, and 

toluene are unnecessary for enforcement 

of the CSA and should be removed from 

the definition of a regulated transaction. 

Since the NPRM to this rulemaking 

did not discuss this exemption, the 

public did not have the opportunity to 

comment on the exclusion of these 

transactions from the definition of a 

regulated transaction. However, DEA 

has determined that good cause exists 

under the Administrative Procedure Act 

(5 U.S.C. 553 et seq.) (APA) to forgo a 

notice of proposed rulemaking on these 

exemptions. The APA states that an 

agency may forego a Notice of Proposed 

Rulemaking if it is impracticable, 

unnecessary, or contrary to the public 

interest. 

If this rulemaking did not exempt 

these transactions upon publication, 

DEA would need to establish the 

exemption by notice and comment. If 

exemption of these transactions were 

delayed, affected parties would need to 

implement a system of recordkeeping 

and reporting for all these regulated 

transactions. This would involve several 

thousand transactions annually in 

chemical mixtures that otherwise may 

not be regulated if the exemptions 

became effective immediately. 

If a proposed rule were published in 

the Federal Register to exclude these 

transactions from the definition of 

regulated transactions, each affected 

entity might find it necessary to 

establish compliance procedures 

although the requirement might prove to 

be only temporary. To avoid 

unnecessary burdens on affected 

companies during the pendency of 

proceedings in this matter, DEA has 

decided to include as part of this 

rulemaking an interim rule, with request 

for comment, that removes these 

transactions from the definition of a 

regulated transaction.

VI. Regulatory Certifications 

Regulatory Flexibility Act 

DEA, pursuant to 21 U.S.C. 

802(39)(A)(v), is finalizing provisions to 

identify exempt chemical mixtures. The 

chemical mixtures being addressed are 

those that contain one or more of the 27 

listed chemicals given in the Table of 

Concentration Limits. A Final Rule 

establishing provisions that exempt 

chemical mixtures containing 

ephedrine, N-methylephedrine, Nmethylpseudoephedrine, 

norpseudoephedrine, 

phenylpropanolamine, and 

pseudoephedrine was published in a 

separate rulemaking (68 FR 23195, May 

1, 2003). 

Provisions to exempt chemical 

mixtures in the listed chemicals gammabutyrolactone, red phosphorus, white 

phosphorus, and hypophosphorous acid 

(and its salts) are not being finalized at 

this time. These chemicals were not 

regulated when the NPRM ‘‘Exemption 

of Chemical Mixtures’’ (63 FR 49506) 

was published. Therefore, regulations 

addressing their mixtures were not 

proposed. DEA is treating mixtures 

containing these listed chemicals as 

exempt until promulgation of 

regulations that identify exempt 

chemical mixtures in these chemicals. 

To identify exempt chemical 

mixtures, a concentration limit is placed 

on each chemical, or combination of 

chemicals, which determines the 

mixture’s regulatory status. Categories of 

exempt chemical mixtures are also 

defined. In addition, DEA can determine 

that a mixture is exempt via an 

application process (Section 1310.13). 

Comments to the NPRM informed 

DEA that a substantial number of 

chemical mixtures that are not useful to 

traffickers could potentially be regulated 

if the proposed rule were finalized as 

written. DEA determined that the 

regulation of these chemical mixtures is 

not necessary for enforcement of the 

CSA. Therefore, DEA decided to exempt 

these chemical mixtures from regulatory 

controls by identifying new 

concentration limits and exemption of 

certain types of transactions. 

DEA notes that the List II solvent 

chemicals acetone, ethyl ether, 2-

butanone, methyl isobutyl ketone, and 

toluene contribute to the largest number 

of potentially regulated chemical 

mixtures of List II chemicals. To limit 

the number of potentially regulated 

chemical mixtures to those necessary for 

enforcement of the CSA, DEA decided 

to define all domestic and import 

transactions of mixtures in these List II 

solvent chemicals as exempt 

transactions. This exemption applies to 

all persons that handle these chemical 

mixtures and not only to those who are 

represented in the comments. Although 

effective upon publication of this final 

rule, DEA is accepting postVerDate jul<14>2003 15:00 Dec 14, 2004 Jkt 205001 PO 00000 Frm 00021 Fmt 4700 Sfmt 4700 E:\FR\FM\15DER1.SGM 15DER1
74970 Federal Register / Vol. 69, No. 240 / Wednesday, December 15, 2004 / Rules and Regulations 

promulgation comments regarding this 

regulation. 

The regulated industry only expressed 

concerns through comments to the 

NPRM with respect to three List I 

chemicals, anthranilic acid, 

benzaldehyde, and phenylacetic acid. 

The food flavoring and fragrance 

industries use these chemicals, as 

discussed by a single comment 

representing both the Flavor and Extract 

Manufacturers Association of the United 

States, and the Fragrance Materials 

Association of the United States. No 

other List I chemicals were addressed in 

the comments, therefore, DEA 

concludes that no other List I chemicals 

are a concern to handlers of chemical 

mixtures at the concentration limits 

proposed. 

The concentration limits are being 

increased for the List I chemicals 

anthranilic acid and phenylacetic acid 

to the levels suggested by comment. 

Based on the comment, this increase is 

expected to exempt all chemical 

mixtures in anthranilic acid and 

phenylacetic acid identified by DEA 

that are not at substantial risk of 

diversion. However, DEA decided that 

traffickers could use chemical mixtures 

containing over 50 percent 

benzaldehyde, although a comment 

suggested that even higher 

concentrations would not be diverted. 

Therefore, DEA increased the 

concentration limit of benzaldehyde 

from 35 percent to 50 percent to regulate 

only those chemical mixtures identified 

by DEA as necessary for enforcement of 

the CSA. Therefore, some commercially 

available chemical mixtures in 

benzaldehyde are expected to be 

regulated. 

Benzaldehyde is a chemical used in 

food flavorings. The comment states that 

the number of persons that manufacture 

or use flavors is 97. Provided the 

number of persons that will be newly 

registered to handle chemical mixtures 

in benzaldehyde is 97, the initial total 

registration cost would be $57,715, 

based on the current new application 

fee of $595.00 for each company. The 

total annual re-registration cost, based 

on the present renewal fee of $477.00 

for each company, would be $46,269. In 

addition to the specific dollar cost, the 

registration requirement would require 

an annual reporting burden of 

approximately 48.5 hours. This is based 

on the estimated one-half hour required 

to complete and submit an application 

for registration or re-registration. 

The comment stated that 66 members 

of the commenting industry association 

manufacture or sell fragrances. 

Assuming that all persons involved with 

the manufacture of food flavorings or 

fragrances (163) must register for each of 

the three chemicals, the combined 

current estimated cost for all new 

application fees is $290,955. 

DEA adopted those suggestions that 

will not adversely impact enforcement 

of the CSA while eliminating the 

greatest number of transactions in List I 

and List II chemical mixtures identified 

by DEA. Only three List I chemicals and 

four List II chemicals contribute to the 

largest number of potential newly 

regulated chemical mixtures. 

The remaining listed chemicals 

addressed in the rulemaking were not 

addressed in the comments and make 

up only a small number of new 

potentially regulated chemical mixtures. 

DEA does not anticipate a significant 

number of regulated chemical mixtures 

due to the remaining listed chemicals. 

For those chemical mixtures that fall 

within the regulatory parameters, the 

manufacturer can obtain exempt status 

for a chemical mixture by the 

application process. Once a chemical 

mixture has been granted exempt status 

by application, all down-stream 

activities in that unaltered mixture are 

exempt.

Therefore, in accordance with the 

Regulatory Flexibility Act (5 U.S.C. 

605(b)), the Deputy Administrator has 

reviewed this regulation and by 

approving it certifies that this regulation 

will not have a significant economic 

impact upon a substantial number of 

small entities. 

Executive Order 12866 

This regulation has been drafted and 

reviewed in accordance with Executive 

Order 12866, Section 1(b), Principles of 

Regulation. DEA has determined that 

this rule is a ‘‘significant regulatory 

action’’ under Executive Order 12866, 

Section 3(f), Regulatory Planning and 

Review, and accordingly this rule has 

been reviewed by the Office of 

Management and Budget. 

Executive Order 12988 

This regulation meets the applicable 

standards set forth in Sections 3(a) and 

3(b)(2) of Executive Order 12988. 

Executive Order 13132 

This rulemaking does not preempt or 

modify any provision of state law; nor 

does it impose enforcement 

responsibilities on any state; nor does it 

diminish the power of any state to 

enforce its own laws. Accordingly, this 

rulemaking does not have federalism 

implications warranting the application 

of Executive Order 13132. 

Unfunded Mandates Reform Act of 1995 

This rule will not result in the 

expenditure by state, local, and tribal 

governments, in the aggregate, or by the 

private sector, of $114 million or more 

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. 

Small Business Regulatory Enforcement 

Fairness Act of 1996 

This rule is not a major rule as 

defined by Section 804 of the Small 

Business Regulatory Enforcement 

Fairness Act of 1996. 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 foreignbased companies in domestic and 

export markets. 

Paperwork Reduction Act 

This Final Rule requires that persons 

handling nonexempt chemical mixtures 

containing a List I chemical must 

register with DEA to handle the 

regulated mixture. Persons will register 

using DEA Form 510 ‘‘Application for 

Registration under Domestic Chemical 

Diversion Control Act of 1993’’

addressed in OMB information 

collection 1117–0031. As it is not 

possible for DEA to determine the 

number of persons whose chemical 

mixtures might be exempted from 

regulation by one of the three criteria 

established for exempting such 

mixtures, it is not possible for DEA to 

quantify at this time the number of 

persons affected by the requirement of 

registration. As information regarding 

the number of persons registering with 

DEA due to this rule becomes available, 

DEA will adjust its collection of 

information accordingly.

List of Subjects in 21 CFR Part 1310 

Drug traffic control, List I and List II 

chemicals, Reporting and recordkeeping 

requirements.

■ For the reasons set out above, 21 CFR 

part 1310 is amended to read as follows:

PART 1310—[AMENDED]

■ 1. The authority citation for part 1310 

continues to read as follows:

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

■ 2. Section 1310.04 is amended by 

revising paragraph (h) and adding new 

paragraphs (i) and (j) to read as follows:

Federal Register / Vol. 69, No. 240 / Wednesday, December 15, 2004 / Rules and Regulations 74971

§ 1310.04 Maintenance of records.

* * * * *

(h) The thresholds and conditions in 

paragraphs (f) and (g) of this section will 

apply to transactions involving 

regulated chemical mixtures. For 

purposes of determining whether the 

weight or volume of a chemical mixture 

meets or exceeds the applicable 

quantitative threshold, the following 

rules apply: 

(1) For chemical mixtures containing 

List I chemicals or List II chemicals 

other than those in paragraph (h)(2) of 

this section, the threshold is determined 

by the weight of the listed chemical in 

the chemical mixture. 

(2) For the List II chemicals acetone, 

ethyl ether, 2-butanone, toluene, and 

methyl isobutyl ketone, the threshold is 

determined by the weight of the entire 

chemical mixture. 

(3) If two or more listed chemicals are 

present in a chemical mixture, and the 

quantity of any of these chemicals 

equals or exceeds the threshold 

applicable to that chemical, then the 

transaction is regulated.

■ 3. Section 1310.08 is amended by 

adding a new paragraph (l) to read as 

follows:

§ 1310.08 Excluded transactions.

* * * * *

(l) Domestic and import transactions 

in chemical mixtures that contain 

acetone, ethyl ether, 2-butanone, or 

toluene unless regulated because of 

being formulated with another listed 

chemical above the concentration limit.

■ 4. Section 1310.09 is amended by 

adding new paragraphs (f) and (g) to read 

as follows:

§ 1310.09 Temporary exemption from 

registration.

* * * * *

(f) Except for chemical mixtures 

containing the listed chemicals in 

paragraph (e) of this section, each 

person required by section 302 of the 

Act (21 U.S.C. 822) to obtain a 

registration to distribute, import, or 

export regulated chemical mixtures, 

pursuant to §§ 1310.12 and 1310.13, is 

temporarily exempted from the 

registration requirement, provided that 

DEA receives a proper application for 

registration or application for exemption 

on or before February 14, 2005. The 

exemption will remain in effect for each 

person who has made such application 

until the Administration has approved 

or denied that application. This 

exemption applies only to registration; 

all other chemical control requirements 

set forth in parts 1309, 1310, and 1313 

of this chapter remain in full force and 

effect. 

(g) Any person who distributes, 

imports, or exports a chemical mixture 

whose application for exemption is 

subsequently denied by DEA must 

obtain a registration with DEA. A 

temporary exemption from the 

registration requirement will also be 

provided for these persons, provided 

that DEA receives a properly completed 

application for registration on or before 

30 days following the date of official 

DEA notification that the application for 

exemption has not been approved. The 

temporary exemption for such persons 

will remain in effect until DEA takes 

final action on their registration 

application.

■ 5. Section 1310.12 is amended by 

revising paragraph (c) and adding new 

paragraphs (d)(2) and (3) to read as 

follows:

§ 1310.12 Exempt chemical mixtures.

* * * * *

(c) Mixtures containing a listed 

chemical in concentrations equal to or 

less than those specified in the ‘‘Table 

of Concentration Limits’’ are designated 

as exempt chemical mixtures for the 

purpose set forth in this section. The 

concentration is determined for liquidliquid mixtures by using the volume or 

weight and for mixtures containing 

solids or gases by using the unit of 

weight.

TABLE OF CONCENTRATION LIMITS

DEA chemical 

code number Concentration Special conditions 

List I Chemicals

N-Acetylanthranilic acid, its salts and esters ........ 8522 20% by Weight ............. Concentration based on any combination of Nacetylanthranilic acid and its salts and esters. 

Anthranilic acid, and its salts and esters .............. 8530 50% by Weight ............. Concentration is based on any combination of 

anthranilic acid and its salts and esters. 

Benzaldehyde ........................................................ 8256 50% by Weight or Volume.

Benzyl cyanide ...................................................... 8570 20% by Weight or Volume.

Ephedrine, its salts, optical isomers, and salts of 

optical isomers.

8113 5% by Weight, net 

weight includes capsule, if any.

Concentration based on any combination of 

ephedrine, pseudoephedrine, and their salts, 

optical isomers and salts of optical isomers. 

Ergonovine and its salts ........................................ 8675 Not exempt at any concentration.Chemical mixtures containing any amount of ergonovine, including its salts, are not exempt. 

Ergotamine and its salts ....................................... 8676 Not exempt at any concentration.Chemical mixtures containing amount of any ergotamine, including its salts, are not exempt. 

Ethylamine and its salts ........................................ 8678 20% by Weight or Volume.Ethylamine or its salts in an inert carrier solvent 

is not considered a mixture. Concentration is 

based on ethylamine in the mixture and not 

the combination of ethylamine and carrier solvent, if any. 

Hydriodic acid ........................................................ 6695 20% by Weight or Volume.

Isosafrole ............................................................... 8704 20% by Weight or Volume.Concentration in a mixture cannot exceed 20% if 

taken alone or in any combination with safrole. 

Methylamine and its salts ..................................... 8520 20% by Weight ............. Methylamine or its salts in an inert carrier solvent is not considered a mixture. Weight is 

based on methylamine in the mixture and not 

the combined weight of carrier solvent, if any. 

3,4-Methylenedioxyphenyl-2-propanone ............... 8502 20% by Weight.

74972 Federal Register / Vol. 69, No. 240 / Wednesday, December 15, 2004 / Rules and Regulations 

TABLE OF CONCENTRATION LIMITS—Continued

DEA chemical 

code number Concentration Special conditions 

N-Methylephedrine, its salts, optical isomers, and 

salts of optical isomers.

8115 0.1% by Weight ............ Concentration based on any combination of salts 

N-methylephedrine, N-methylpseudoephedrine 

and their salts, optical isomers and salts of optical isomers. 

N-Methylpseudoephedrine, its salts, optical isomers, and salts of optical isomers.8119 0.1% by Weight ............ Concentration based on any combination of Nmethylpseudoephedrine, N-methylephedrine, 

and their salts, optical isomers and salts of optical isomers. 

Nitroethane ............................................................ 6724 20% by Weight or Volume.

Norpseudoephedrine, its salts, optical isomers, 

and salts of optical isomers.

8317 0.6% by Weight ............ Concentration based on any combination of 

norpseudoephedrine, phenylpropanolamine 

and their salts, optical isomers and salts of optical isomers. 

Phenylacetic acid, and its salts and esters .......... 8791 40% by Weight ............. Concentration is based on any combination of

phenylacetic acid and its salts and esters. 

.

Phenylpropanolamine, its salts, optical isomers, 

and salts of optical isomers.

1225 0.6% by Weight ............ Concentration based on any combination of 

phenylpropanolamine, norpseudoephedrine 

and their salts, optical isomers and salts of optical isomers. 

Piperidine, and its salts ......................................... 2704 20% by Weight or Volume.Concentration based on any combination of piperidine and its salts. Concentration based on 

weight if a solid, weight or volume if a liquid. 

Piperonal ............................................................... 8750 20% by Weight or Volume.

Propionic anhydride .............................................. 8328 20% by Weight or Volume.

Pseudoephedrine, its salts, optical isomers, and 

salts of optical isomers.

8112 5% by Weight, net 

weight includes capsule, if any.

Concentration based on any combination of 

pseudoephedrine, ephedrine, and their salts, 

optical isomers and salts of optical isomers. 

Safrole ................................................................... 8323 20% by Volume ............ Concentration in a mixture cannot exceed 20% if 

taken alone or in any combination with 

isosafrole. 

List II Chemicals

Acetic Anhydride ................................................... 8519 20% by Weight or Volume.

Acetone ................................................................. 6532 35% by Weight or Volume.Exports only; Limit applies to acetone or any 

combination of acetone, ethyl ether, 2-butanone, methyl isobutyl ketone, and toluene if 

present in the mixture by summing the concentrations for each chemical. 

Benzyl chloride ...................................................... 8568 20% by Weight or Volume.

2-butanone ............................................................ 6714 35% by Weight or Volume.Exports only; Limit applies to 2-butanone or any 

combination of acetone, ethyl ether, 2-butanone, methyl isobutyl ketone, and toluene if 

present in the mixture by summing the concentrations for each chemical. 

Ethyl ether ............................................................. 6584 35% by Weight or Volume.Exports only; Limit applies to ethyl ether or any 

combination of acetone, ethyl ether, 2-butanone, methyl isobutyl ketone, and toluene if 

present in the mixture by summing the concentrations for each chemical. 

Hydrochloric acid ................................................... 6545 20% by Weight or Volume.Hydrogen chloride in an inert carrier solvent, 

such as aqueous or alcoholic solutions, is not 

considered a mixture. Weight is based on hydrogen chloride in the mixture and not the 

combined weight of the carrier solvent, if any. 

Methyl isobutyl ketone .......................................... 6715 35% by Weight or Volume.Exports only pursuant to § 1310.08; Limit applies 

to methyl isobutyl ketone or any combination 

of acetone, ethyl ether, 2-butanone, methyl 

isobutyl ketone, and toluene if present in the 

mixture by summing the concentrations for 

each chemical. 

Potassium permanganate ..................................... 6579 15% by Weight.

Federal Register / Vol. 69, No. 240 / Wednesday, December 15, 2004 / Rules and Regulations 74973

TABLE OF CONCENTRATION LIMITS—Continued

DEA chemical 

code number Concentration Special conditions 

Sulfuric acid ........................................................... 6552 20% by Weight or Volume.Sulfuric acid in an inert carrier solvent, such as 

aqueous or alcoholic solutions, is not considered a mixture. Weight is based on sulfuric 

acid in the mixture and not the combined 

weight of the carrier solvent, if any. 

Toluene ................................................................. 594 35% by Weight or Volume.Exports only; Limit applies to toluene or any 

combination of acetone, ethyl ether, 2-butanone, methyl isobutyl ketone, and toluene if 

present in the mixture by summing the concentrations for each chemical. 

(d) The following categories of 

chemical mixtures are automatically 

exempt from the provisions of the 

Controlled Substances Act as described 

in paragraph (a) of this section: 

(1) * * * 

(2) Chemical mixtures that are 

distributed directly to an incinerator for 

destruction or directly to an authorized 

waste recycler or reprocessor where 

such distributions are documented on 

United States Environmental Protection 

Agency Form 8700–22; persons 

distributing the mixture to the 

incinerator or recycler must maintain 

and make available to agents of the 

Administration, upon request, such 

documentation for a period of no less 

than two years. 

(3) Completely formulated paints and 

coatings: Completely formulated paints 

and coatings are only those formulations 

that contain all the components of the 

paint or coating for use in the final 

application without the need to add any 

additional substances except a thinner if 

needed in certain cases. A completely 

formulated paint or coating is defined as 

any clear or pigmented liquid, 

liquefiable or mastic composition 

designed for application to a substrate 

in a thin layer that is converted to a 

clear or opaque solid protective, 

decorative, or functional adherent film 

after application. Included in this 

category are clear coats, topcoats, 

primers, varnishes, sealers, adhesives, 

lacquers, stains, shellacs, inks, and 

temporary protective coatings.

* * * * *

Dated: December 9, 2004. 

Michele M. Leonhart, 

Deputy Administrator.

[FR Doc. 04–27449 Filed 12–14–04; 8:45 am] 

BILLING CODE 4410–09–P

PENSION BENEFIT GUARANTY 

CORPORATION 

29 CFR Parts 4022 and 4044 

Benefits Payable in Terminated SingleEmployer Plans; Allocation of Assets 

in Single-Employer Plans; Interest 

Assumptions for Valuing and Paying 

Benefits

AGENCY: Pension Benefit Guaranty 

Corporation.

ACTION: Final rule.

SUMMARY: The Pension Benefit Guaranty 

Corporation’s regulations on Benefits 

Payable in Terminated Single-Employer 

Plans and Allocation of Assets in 

Single-Employer Plans prescribe interest 

assumptions for valuing and paying 

benefits under terminating singleemployer plans. This final rule amends 

the regulations to adopt interest 

assumptions for plans with valuation 

dates in January 2005. Interest 

assumptions are also published on the 

PBGC’s Web site (http://www.pbgc.gov).

EFFECTIVE DATE: January 1, 2005.

FOR FURTHER INFORMATION CONTACT:

Harold J. Ashner, Assistant General 

Counsel, Office of the General Counsel, 

Pension Benefit Guaranty Corporation, 

1200 K Street, NW., Washington, DC 

20005, 202–326–4024. (TTY/TDD users 

may call the Federal relay service tollfree at 1–800–877–8339 and ask to be 

connected to 202–326–4024.)

SUPPLEMENTARY INFORMATION: The 

PBGC’s regulations prescribe actuarial 

assumptions—including interest 

assumptions—for valuing and paying 

plan benefits of terminating singleemployer plans covered by title IV of 

the Employee Retirement Income 

Security Act of 1974. The interest 

assumptions are intended to reflect 

current conditions in the financial and 

annuity markets. 

Three sets of interest assumptions are 

prescribed: (1) A set for the valuation of 

benefits for allocation purposes under 

section 4044 (found in Appendix B to 

part 4044), (2) a set for the PBGC to use 

to determine whether a benefit is 

payable as a lump sum and to determine 

lump-sum amounts to be paid by the 

PBGC (found in Appendix B to part 

4022), and (3) a set for private-sector 

pension practitioners to refer to if they 

wish to use lump-sum interest rates 

determined using the PBGC’s historical 

methodology (found in Appendix C to 

part 4022). 

Accordingly, this amendment (1) adds 

to Appendix B to part 4044 the interest 

assumptions for valuing benefits for 

allocation purposes in plans with 

valuation dates during January 2005, (2) 

adds to Appendix B to part 4022 the 

interest assumptions for the PBGC to 

use for its own lump-sum payments in 

plans with valuation dates during 

January 2005, and (3) adds to Appendix 

C to part 4022 the interest assumptions 

for private-sector pension practitioners 

to refer to if they wish to use lump-sum 

interest rates determined using the 

PBGC’s historical methodology for 

valuation dates during January 2005.

For valuation of benefits for allocation 

purposes, the interest assumptions that 

the PBGC will use (set forth in 

Appendix B to part 4044) will be 4.10 

percent for the first 20 years following 

the valuation date and 4.75 percent 

thereafter. These interest assumptions 

(in comparison to those in effect for 

December 2004) represent an increase of 

0.30 percent for the first 20 years 

following the valuation date and a 

decrease of 0.25 percent for all years 

thereafter. 

The interest assumptions that the 

PBGC will use for its own lump-sum 

payments (set forth in Appendix B to 

part 4022) will be 3.00 percent for the 

period during which a benefit is in pay 

status and 4.00 percent during any years 

preceding the benefit’s placement in pay 

status. These interest assumptions 

represent an increase (from those in 

effect for December 2004) of 0.25 

percent for the period during which a