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[Federal Register: June 25, 2010 (Volume 75, Number 122)]
[Proposed Rules]               
[Page 36306-36313]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr25jn10-13]                         

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DEPARTMENT OF JUSTICE

Drug Enforcement Administration

21 CFR Part 1310

[Docket No. DEA-228P]
RIN 1117-AA66

 
Chemical Mixtures Containing Listed Forms of Phosphorus and 
Change in Application Process

AGENCY: Drug Enforcement Administration (DEA), Department of Justice.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The DEA is proposing regulations which establish those 
chemical mixtures containing red phosphorus, white phosphorus (also 
known as yellow phosphorus), or hypophosphorous acid and its salts 
(hereinafter ``regulated phosphorus'') that shall automatically qualify 
for exemption from the Controlled Substances Act (CSA) regulatory 
controls. DEA is proposing that chemical mixtures containing red 
phosphorus in a concentration of 80 percent or less and mixtures 
containing hypophosphorous acid and its salts (hypophosphite salts) in 
a concentration of 30 percent and less, shall qualify for automatic 
exemption. DEA is not proposing automatic exemption for chemical 
mixtures containing white phosphorus. Unless otherwise exempted, all 
material containing white phosphorus shall become subject to CSA 
chemical regulatory controls regardless of concentration.
    DEA recognizes that concentration criteria alone cannot identify 
all mixtures that warrant exemption, therefore, an application process 
has been implemented which allows manufacturers to apply for exemption 
from CSA regulatory controls for those phosphorus chemical mixtures 
that do not qualify for automatic exemption. This rulemaking also 
proposes changes to the application review and notification process.
    While preparing this rulemaking, DEA became aware that references 
to section 1018 of the Act (21 U.S.C. 971) were inadvertently omitted 
from 21 CFR 1310.12(a) and 1310.13(i). Therefore, DEA is proposing that 
this rulemaking amend these sections by adding this citation. This 
insertion is a clarification and does not alter the current treatment 
of exempt chemical mixtures under the CSA.

DATES: Written comments must be postmarked, and electronic comments 
must be sent, on or before August 24, 2010.

ADDRESSES: To ensure proper handling of comments, please reference 
``Docket No. DEA-228P'' on all written and electronic correspondence. 
Written comments being sent via regular mail should be sent to the 
Deputy Assistant Administrator, Office of Diversion Control, Drug 
Enforcement Administration, 8701 Morrissette Drive, Springfield, VA 
22152. Attention: DEA Federal Register Representative/ODL. Written 
comments sent via express mail should be sent to DEA Headquarters, 
Attention: DEA Federal Register Representative/ODL, 8701 Morrissette 
Drive, Springfield, VA 22152.

[[Page 36307]]

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.
    Posting of Public Comments: Please note that all comments received 
are considered part of the public record and made available for public 
inspection online at http://www.regulations.gov and in the Drug 
Enforcement Administration's public docket. Such information includes 
personal identifying information (such as your name, address, etc.) 
voluntarily submitted by the commenter.
    If you want to submit personal identifying information (such as 
your name, address, etc.) as part of your comment, but do not want it 
to be posted online or made available in the public docket, you must 
include the phrase ``PERSONAL IDENTIFYING INFORMATION'' in the first 
paragraph of your comment. You must also place all the personal 
identifying information you do not want posted online or made available 
in the public docket in the first paragraph of your comment and 
identify what information you want redacted.
    If you want to submit confidential business information as part of 
your comment, but do not want it to be posted online or made available 
in the public docket, you must include the phrase ``CONFIDENTIAL 
BUSINESS INFORMATION'' in the first paragraph of your comment. You must 
also prominently identify confidential business information to be 
redacted within the comment. If a comment has so much confidential 
business information that it cannot be effectively redacted, all or 
part of that comment may not be posted online or made available in the 
public docket.
    Personal identifying information and confidential business 
information identified and located as set forth above will be redacted 
and the comment, in redacted form, will be posted online and placed in 
the Drug Enforcement Administration's public docket file. Please note 
that the Freedom of Information Act applies to all comments received. 
If you wish to inspect the agency's public docket file in person by 
appointment, please see the For Further Information paragraph.

FOR FURTHER INFORMATION CONTACT: Christine A. Sannerud, Ph.D., Chief, 
Drug and Chemical Evaluation Section, Office of Diversion Control, Drug 
Enforcement Administration, 8701 Morrissette Drive, Springfield, VA 
22152. Telephone: (202) 307-7183.

SUPPLEMENTARY INFORMATION:

DEA's Legal Authority

    DEA implements the Comprehensive Drug Abuse Prevention and Control 
Act of 1970, often referred to as the Controlled Substances Act (CSA) 
and Controlled Substances Import and Export Act (21 U.S.C. 801-971), as 
amended. DEA publishes the implementing regulations for these statutes 
in Title 21 of the Code of Federal Regulations (CFR), Parts 1300 to 
end. These regulations are designed to ensure that there is a 
sufficient supply of controlled substances for legitimate medical 
purposes and to deter the diversion of controlled substances to illegal 
purposes. The CSA mandates that DEA establish a closed system of 
control for manufacturing, distributing, and dispensing controlled 
substances. Any person who manufactures, distributes, dispenses, 
imports, exports, or conducts research or chemical analysis with 
controlled substances must register with DEA (unless exempt) and comply 
with the applicable requirements for the activity. The CSA as amended 
also requires DEA to regulate the manufacture, distribution, 
importation, and exportation of chemicals that may be used to 
manufacture controlled substances. Listed chemicals that are classified 
as List I chemicals are important to the manufacture of controlled 
substances. Those classified as List II chemicals may be used to 
manufacture controlled substances.

Purpose of This Rule

    In this rule, DEA is proposing concentration limits on chemical 
mixtures containing red phosphorus and/or hypophosphorous acid and its 
salts. If this rule is finalized as proposed, chemical mixtures 
containing either of these listed chemicals at or below the 
concentration limit would be automatically exempt from Controlled 
Substances Act (CSA) regulatory controls. Mixtures containing these 
chemicals above the concentration limit would be regulated as List I 
chemicals. DEA is not proposing automatic exemption for chemical 
mixtures containing white phosphorus. Unless otherwise exempted, all 
material containing white phosphorus shall become subject to CSA 
chemical regulatory controls regardless of concentration.

DEA's Requirement To Identify Exempt Chemical Mixtures

    The Chemical Diversion and Trafficking Act of 1988 (Pub. L. 100-
690) (CDTA) created a definition for the term ``chemical mixture'' (21 
U.S.C. 802(40)). The CDTA established 21 U.S.C. 802(39)(A)(vi) to 
exclude ``any transaction in a chemical mixture'' from the definition 
of a ``regulated transaction.'' This exemption was exploited by those 
that traffic chemicals for illicit purposes in that it provided an 
unregulated source for obtaining listed chemicals for use in the 
illicit manufacture of controlled substances.
    In April 1994, the Domestic Chemical Diversion Control Act of 1993 
(DCDCA) corrected this situation by subjecting such chemical mixtures 
to CSA regulatory requirements, unless specifically exempted by 
regulation. These requirements included recordkeeping, reporting, and 
security for all regulated chemical mixtures with the additional 
requirement of registration for handlers of List I chemicals including 
regulated chemical mixtures. The DCDCA also provided the Attorney 
General with the authority to establish regulations to exempt chemical 
mixtures from the definition of a ``regulated transaction.'' A chemical 
mixture can be granted exemption ``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)(vi)).
    DEA has treated all regulated chemical mixtures as non-regulated 
chemicals until such time that it promulgates a final rule that 
identifies specific chemical mixtures as exempt. This served to prevent 
the immediate regulation of all qualified mixtures, which is not 
necessary. It also allowed DEA to gather information to implement 
regulations pursuant to 21 U.S.C. 802(39)(A)(vi).

Chemical Mixture Definition

    Title 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 
in

[[Page 36308]]

combination with any number of non-listed chemicals.
    DEA does not consider a chemical mixture to mean the combination of 
a listed chemical and an inert carrier. An inert carrier can be any 
chemical that does not modify the function of the listed chemical but 
is present to aid in the delivery of the listed chemical. Examples 
include, but are not limited to, dilutions in water, alcohol or the 
presence of a carrier gas.
    In determining which chemical mixtures shall be subject to control, 
DEA considers the actual and potential clandestine use of such 
material. 21 U.S.C. 802(39)(A)(vi) states that an exemption can be 
granted if ``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.'' It should be noted that the requirements 
described by statute do not allow for exemptions based on such business 
practices as selling only to known customers, the cost of the mixture, 
the customer's knowledge of the product's chemical content, packaging, 
or such related topics.
    In 2003, DEA published a Final Rule (68 FR 23195, May 1, 2003) that 
identified exempt mixtures containing the chemicals ephedrine, N-
methylephedrine, N-methylpseudoephedrine, norpseudoephedrine, 
phenylpropanolamine, and pseudoephedrine. The effective date of this 
Final Rule was June 2, 2003. In a second Final Rule (69 FR 74957, 
December 15, 2004; corrected at 70 FR 294, January 4, 2005) DEA 
finalized regulations which addressed the exemption of chemical 
mixtures for 27 of the remaining 38 listed chemicals. However, chemical 
mixtures containing phosphorus were not included. The effective date 
for that Final Rule was January 14, 2005.

Uses of Chemical Mixtures Containing Regulated Phosphorus

    Chemical mixtures that contain red phosphorus are used in the 
manufacture of plastics, flame retardants, pyrotechnics, striker plates 
(e.g., for safety matches and flares), incendiary shells, smoke bombs, 
and tracer bullets. Chemical mixtures containing hypophosphorous acid 
salts (e.g., hypophosphite salts) function as catalysts, stabilizers, 
and growth inhibitors. They are used in plastics, films, paints, paper 
products, and fibers, with applications that include automotive parts, 
furniture, wiring, containers, and housings for appliances and power 
tools. DEA has not identified any chemical mixtures containing white 
phosphorus.

Information Gathered by DEA Concerning Chemical Mixtures Containing 
Regulated Phosphorus

    On January 31, 2003, DEA published in the Federal Register an 
Advance Notice of Proposed Rulemaking (ANPRM) (68 FR 4968) to solicit 
input from industry regarding chemical mixtures containing regulated 
phosphorus. The ANPRM invited interested persons to supply information 
on formulations that contain regulated phosphorus. DEA received three 
responses to this request, all from industrial firms. In addition, DEA 
obtained information on types of formulations containing regulated 
phosphorus and their uses separate from the ANPRM.
    All three commenters informed DEA of commercial applications for 
their chemical mixtures containing regulated phosphorus, which are 
discussed below. The commenters also informed DEA of concentration 
ranges for red phosphorus and salts of hypophosphorous acid (e.g. 
hypophosphite salts). DEA has not identified any chemical mixtures 
containing hypophosphorous acid or white phosphorus either through 
industry comments or as a result of DEA research.

Comments to the ANPRM

    One commenter stated that its red phosphorus is stabilized against 
chemical reactions prior to its use by industry. To achieve this, the 
red phosphorus is blended with other chemicals to become part of a 
matrix that protects it from chemical reactions. The amount of red 
phosphorus formulated in these types of chemical mixtures is not more 
than 50 percent. The comment claimed that such red phosphorus cannot be 
used for the illicit production of methamphetamine.
    Another commenter reported that red phosphorus is formulated with 
dust suppressing agents. These chemical mixtures have applications as 
raw material used in different industrial sectors, including in the 
manufacturing of flame retardants, pyrotechnics, matches, and 
pesticides. The concentration of red phosphorus in these raw materials/
chemical mixtures is generally above 90 percent.
    Two commenters informed DEA that sodium hypophosphite, a regulated 
salt of hypophosphorous acid, is used in low concentrations as a 
stabilizer or as a catalyst. Chemical mixtures for these applications 
are formulated within a range of less than one percent to no greater 
than 20 percent in sodium hypophosphite. Both commenters claimed that 
these formulations are not useful to traffickers.

Diversion of Chemical Mixtures Containing Regulated Phosphorus

    Regulated phosphorus plays an important role in the chemical 
reaction to produce methamphetamine, a schedule II controlled substance 
for which the public health consequences of the manufacture, 
trafficking, and abuse are well known and documented. DEA has 
documented that the predominant method for the illicit manufacture of 
methamphetamine utilizes phosphorus.
    DEA has identified chemical mixtures containing red phosphorus at 
domestic illicit methamphetamine manufacturing sites. Traffickers 
sometimes utilize the striker plates of safety matchbooks or boxes, or 
road flares as a source of red phosphorus. The coating on the striker 
plate contains from 25 to 60 percent red phosphorus. An estimated 20 to 
400 striker plates are needed to obtain one gram of red phosphorus. One 
gram of red phosphorus could yield approximately 1.5 grams of 
methamphetamine hydrochloride, which is the end product of clandestine 
manufacturing. DEA conducted a review of data collected by the El Paso 
Intelligence Center (EPIC), which collects data on clandestine 
laboratory seizures by federal and state authorities. In 2004, EPIC 
reported 4,454 methamphetamine laboratories that utilized red 
phosphorus; 458 of these obtained the red phosphorus from matchbook 
striker plates, which is approximately ten percent of the total.
    EPIC does not report the potential amount of methamphetamine 
produced from red phosphorus extracted from striker plates. However, 
only the smallest illicit laboratories (in terms of production 
capability) are known to use extracted red phosphorus, and these 
individuals manufacture predominantly for personal use. Although ten 
percent of the laboratories use extracted red phosphorus, the total 
amount of methamphetamine produced by these laboratories is relatively 
small. Large scale methamphetamine laboratories which have been 
identified by DEA have historically utilized bulk red phosphorus and 
not red phosphorus extracted from striker plates.

Proposed Concentration Limits for Exempt Chemical Mixtures Containing 
Regulated Phosphorus

    DEA is proposing to establish concentration limits for chemical

[[Page 36309]]

mixtures containing phosphorus. If finalized as proposed, all chemical 
mixtures that have a concentration at or below the established 
concentration limit shall be automatically exempt from CSA chemical 
regulatory controls. Those chemical mixtures having a concentration 
above the concentration limit shall be List I regulated chemicals and 
subject to the chemical regulatory requirements of the CSA.
    DEA is not aware of any chemical mixtures containing white 
phosphorus. It is believed that few chemical mixtures in this chemical 
exist because it is too reactive and unstable when mixed with other 
chemicals. Since DEA has not identified any white phosphorus mixtures, 
DEA is not proposing a concentration limit for white phosphorus and 
therefore, any chemical mixture containing white phosphorus would be 
subject to CSA regulatory control.
    Hypophosphorous acid is marketed in aqueous solutions of 50 percent 
and can be readily used in the illicit manufacture of methamphetamine. 
Such aqueous solutions of hypophosphorous acid, however, are not 
considered chemical mixtures and are therefore currently subject to DEA 
chemical regulations, regardless of concentration. (As stated earlier, 
DEA does not consider a chemical mixture to mean the combination of a 
listed chemical and an inert carrier. An inert carrier can be any 
chemical that does not modify the function of the listed chemical but 
is present to aid in the delivery of the listed chemical. Examples 
include, but are not limited to, dilutions in water, alcohol or the 
presence of a carrier gas.) No chemical mixtures containing 
hypophosphorous acid have been identified by DEA.
    Traffickers use hypophosphite salts and hypophosphorous acid 
similarly. DEA has identified several chemical mixtures containing 
hypophosphite salts in combination with other chemicals for use as mold 
and mildew inhibitors. Additionally, DEA has identified at least one 
industrial product where sodium hypophosphite is in a chemical mixture 
in combination with resins. The concentration of hypophosphite salts 
within these chemical mixtures does not exceed 20 percent.
    The above chemical mixtures have limited potential for use in a 
clandestine laboratory because of the (a) low concentrations of the 
hypophosphite salts, and (b) interference from other chemicals in the 
mixtures. Therefore, DEA is proposing that a 30 percent concentration 
limit for hypophosphorous acid and its salts (hypophosphite salts) be 
established.
    It is important to clarify, again, that DEA does not consider a 
chemical mixture to mean the combination of a listed chemical and an 
inert carrier. Therefore, solutions of hypophosphorous acid or 
hypophosphite salt in water, alcohol, or another inert carrier, are not 
considered chemical mixtures and are therefore currently subject to DEA 
chemical regulatory controls regardless of concentration.
    As discussed above, only the smallest clandestine methamphetamine 
laboratories use chemical mixtures obtained from matchbook striker 
plates as a source of red phosphorus. Although concerned about this 
type of diversion, DEA determined that the regulation of matchbook 
striker plates is impractical and will create undue administrative 
burdens for both law enforcement and the regulated sector.
    DEA is proposing an 80 percent concentration limit for red 
phosphorus. DEA has determined that chemical mixtures containing over 
80 percent red phosphorus are useful in large-scale methamphetamine 
production and therefore should not be automatically exempt from 
regulatory controls.
    A chemical mixture having a regulated form of phosphorus at or 
below the concentration limit can still be a regulated chemical mixture 
if another listed chemical is present above its concentration limit. 
The exemption of chemical mixtures from regulatory controls does not 
remove criminal liability for persons who knowingly sell or possess any 
products containing regulated phosphorus for use in violation of the 
CSA.

Exemption by Application Process

    DEA recognizes that the concentration limits proposed in this rule 
may not identify all phosphorus mixtures that should receive exemption 
status. DEA has implemented an application process to exempt additional 
mixtures (21 CFR 1310.13). This application process was finalized in 
the Final Rule (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)(vi)). An application may be for a single or a 
multiple number of formulations. All chemical mixtures which are 
granted exemption via the application process will be listed in 21 CFR 
1310.13(i).
    This rulemaking is also proposing changes to the existing 
application process. 21 CFR 1310.13(e) provides that within 30 days 
after the receipt of an application for an exemption, the Administrator 
will notify the applicant of acceptance or rejection of the 
application. This paragraph is proposed to be modified in order to 
clarify that this acceptance or rejection only pertains to the 
acceptance or rejection of the application ``for filing'' and does not 
pertain to the granting or denial of the application based upon the 
merits of the application. Furthermore, DEA is proposing that this 
paragraph be modified by removing the 30-day timeframe for 
notification, and instead, specify that such notification be ``in 
writing'' and ``within a reasonable period of time''.

Thresholds and Excluded Transactions for Regulated Phosphorus Chemical 
Mixtures

    Regulated phosphorus compounds do not have a threshold as described 
in 21 CFR 1310.04(g)(1). Thus, all transactions in regulated 
phosphorus, including its regulated chemical mixtures, are regulated 
transactions. Certain transactions, described in 21 CFR 1310.08, are 
excluded from the definition of a regulated transaction. These are 
domestic and international return shipments of reusable containers from 
customer to producer containing residual quantities of red phosphorus 
or white phosphorus in rail cars and intermodal tank containers which 
conform to International Standards Organization specifications (with 
capacities greater than or equal to 2,500 gallons in a single 
container). This exclusion also applies to regulated chemical mixtures 
containing red phosphorus or white phosphorus.

Requirements That Apply to Regulated List I Chemical Mixtures

    Persons interested in handling List I chemicals, including 
regulated chemical mixtures containing List I chemicals, must comply 
with the following:
    Registration. Any person who manufactures, distributes, imports, or 
exports a List I chemical, or proposes to engage in the manufacture, 
distribution, importation, or exportation of a List I chemical, must 
obtain a registration pursuant to the CSA (21 U.S.C. 823, 957). 
Regulations describing registration for List I chemical handlers are 
set forth in 21 CFR part 1309.

[[Page 36310]]

    Separate registration is required for manufacturing, distribution, 
importing, and exporting. Different locations operated by a single 
entity require separate registration if any location is involved with 
the manufacture, distribution, import, or export of a List I chemical. 
Any person manufacturing, distributing, importing, or exporting a 
regulated List I chemical mixture is subject to the registration 
requirement under the CSA. DEA recognizes, however, that it is not 
possible for persons who manufacture, distribute, import, or export 
regulated phosphorus compounds, to immediately complete and submit an 
application for registration and for DEA to issue registrations 
immediately for those activities. Therefore, to allow continued 
legitimate commerce in the compounds, DEA is proposing to establish in 
21 CFR 1310.09 a temporary exemption from the registration requirement 
for persons desiring to manufacture, distribute, import, or export 
regulated phosphorus compounds, provided that DEA receives a properly 
completed application for registration on or before 30 days after DEA 
publishes a Final Rule finalizing these requirements in the Federal 
Register. The temporary exemption for such persons will remain in 
effect until DEA takes final action on their application for 
registration.
    The temporary exemption applies solely to the registration 
requirement; all other chemical control requirements, including 
recordkeeping and reporting, will remain in effect. Additionally, the 
temporary exemption does not suspend applicable federal criminal laws 
relating to the phosphorus compounds, nor does it supersede state or 
local laws or regulations. All handlers of these materials must comply 
with their state and local requirements in addition to the CSA and 
other federal regulatory controls.
    DEA notes that warehouses are exempt from the requirement of 
registration and may lawfully possess List I chemicals, if the 
possession of those chemicals is in the usual course of business (21 
U.S.C. 822(c)(2), 21 U.S.C. 957(b)(1)(B)). For purposes of this 
exemption, the warehouse must receive the List I chemical from a DEA 
registrant and shall only distribute the List I chemical back to the 
DEA registrant and registered location from which it was received. All 
other activities conducted by a warehouse do not fall under this 
exemption; a warehouse that distributes List I chemicals to persons 
other than the registrant and registered location from which they were 
obtained is conducting distribution activities and is required to 
register as such (21 U.S.C. 802(39)(A)(ii)).
    Records and Reports. The CSA (21 U.S.C. 830) requires that certain 
records be kept and reports be made that involve listed chemicals. 
Regulations describing recordkeeping and reporting requirements are set 
forth in 21 CFR part 1310. A record must be made and maintained for two 
years after the date of a transaction involving a listed chemical, 
provided the transaction is a regulated transaction.
    Each regulated bulk manufacturer of a 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.
    Title 21 CFR 1310.05 requires that each regulated person shall 
report to DEA any regulated transaction involving an extraordinary 
quantity of a listed chemical, an uncommon method of payment or 
delivery, or any other circumstance that the regulated person believes 
may indicate that the listed chemical will be used in violation of the 
CSA. Regulated persons are also required to report to DEA any proposed 
regulated transaction with a person whose description or other 
identifying information has been furnished to the regulated person. 
Finally, regulated persons are required to report any unusual or 
excessive loss or disappearance of a listed chemical.
    Import/Export. All imports/exports of a listed chemical 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 
part 1313. Separate registration is necessary for each activity (21 CFR 
1309.22).
    Security. All applicants and registrants shall provide effective 
controls against theft and diversion of chemicals as described in 21 
CFR 1309.71.
    Administrative Inspection. Places, including factories, warehouses, 
or other establishments and conveyances, where regulated persons may 
lawfully hold, manufacture, or distribute, dispense, administer, or 
otherwise dispose of a regulated chemical/chemical 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.
    The goal of this rulemaking is to deny traffickers access to 
regulated phosphorus compounds while minimizing the burden on 
legitimate industry. 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 phosphorus compounds and change them into non-listed 
chemicals, formulate phosphorus compounds into exempt chemical mixtures 
or consume them in industrial processes.

Technical Revision to 21 CFR 1310.12(a) and 1310.13(i)

    While preparing this rulemaking, DEA became aware that references 
to section 1018 of the Act (21 U.S.C. 971) were inadvertently omitted 
from 21 CFR 1310.12(a) and 1310.13(i). Therefore, DEA is proposing that 
this rulemaking amend these sections by adding this citation. This 
insertion is a clarification and does not alter the current treatment 
of exempt chemical mixtures under the CSA.
    As DEA discussed in its December 15, 2004, Final Rule (specifically 
69 FR 74963, comment 10) all chemical mixtures not exempt from CSA 
regulatory controls are subject to all aspects of those controls, 
including importation and exportation requirements. Thus, chemical 
mixtures that are exempt under 21 CFR 1310.12 and 1310.13 are also 
exempt from the requirements of Section 1018 of the Act (21 U.S.C. 
971). The requirements of 21 U.S.C. 971 apply to ``each regulated 
person, who imports or exports a listed chemical.'' Since a person 
distributing an exempt chemical mixture is not a ``regulated person'' 
as defined by 21 U.S.C. 802(38), that person is exempt from the 
requirements of 21 U.S.C. 971.
    DEA notes that this is a technical correction only. All exempt 
chemical mixtures have been treated as such for import and export 
purposes, and all regulated mixtures have been treated as regulated 
transactions for import and export purposes. DEA is merely including a 
reference which was inadvertently omitted from this regulatory 
language.

Regulatory Certifications

Regulatory Flexibility and Small Business Concerns

    The Deputy Administrator hereby certifies that this rulemaking has 
been

[[Page 36311]]

drafted in accordance with the Regulatory Flexibility Act (5 U.S.C. 
601-612). In the ANPRM, DEA sought information from manufacturers about 
the impact of setting concentration limits for chemical mixtures 
containing phosphorus. Only three companies, none small businesses, 
provided information. Some of the mixtures sold by one of the 
commenters would be subject to this proposed rule, but DEA could not 
determine whether any of the products that may be produced with those 
phosphorus mixtures would also be covered. DEA is, therefore, seeking 
comments on whether any of the products contain phosphorus would exceed 
the proposed concentration limits. DEA notes, however, that the cost of 
compliance with the rule is low and is unlikely to impose a significant 
cost on any manufacturing, distributing, importing, or exporting firm. 
The recordkeeping requirements can be met with standard business 
records; most firms maintain adequate security to meet DEA's 
regulations. The primary cost of compliance is the registration fee. 
For manufacturers, the registration fee is $2,293 annually; for 
distributors, importers, and exporters, the fee is $1,147 annually. 
These fees are substantially less than one percent of annual sales for 
manufacturers, distributors, importers, and exporters. Data from the 
2002 Economic Census indicate that small chemical manufacturers 
generally have sales well above $1 million; most small chemical 
distributors have sales above $250,000.

Executive Order 12866

    This regulation has been drafted and reviewed in accordance with 
Executive Order 12866, Section 1(b), Principles of Regulation. It has 
been 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. The information DEA received in response to the 
ANPRM indicates that few phosphorus mixtures will be subject to the 
regulation. Those mixtures appear to be produced by current DEA 
registrants on whom the rule will impose no new requirements. DEA is 
seeking comments on whether any firms purchasing covered mixtures are 
producing products that would themselves be subject to the rule.
    As stated earlier in this rulemaking the vast majority of the 
chemical mixtures that will become subject to this proposed rulemaking 
have large industrial uses. Regulated chemical mixtures are not items 
having common household uses. Although concerned about the diversion of 
matchbook striker plates, DEA determined that the regulation of 
matchbook striker plates is impractical and will create undue 
administrative burdens for both law enforcement and the regulated 
sector.
    Benefits. Phosphorus is a chemical important in the clandestine 
manufacture of methamphetamine and amphetamine. This rule seeks to 
eliminate the use of certain chemical mixtures whose high 
concentrations of phosphorus make them valued by traffickers seeking 
this chemical for their clandestine laboratory operations.
    Methamphetamine remains the primary drug produced in illicit 
laboratories within the U.S. Data from the El Paso Intelligence 
Center's (EPIC) Clandestine Laboratory Database indicates that there 
were more than 17,170 methamphetamine laboratory incidents in calendar 
year 2004; in 2005, as State laws began to limit sales of over-the-
counter medications containing primary ingredients used in the illicit 
manufacture of methamphetamine (ephedrine, pseudoephedrine, and 
phenylpropanolamine), the number of incidents declined to 12,139. In 
2006, with both State and Federal controls coming into effect, the 
number of incidents fell significantly to 7,347, but that is still 
about 20 clandestine laboratory incidents a day.
    According to the Substance Abuse and Mental Health Services 
Administration (SAMHSA), Drug Abuse Warning Network, in 2003, the 
latest year for which data are available (since SAMHSA is currently 
amending 2004, 2005, and 2006 data), amphetamine and methamphetamine 
emergency department (ED) visits rose from 25,200 in 1995 to 38,960 in 
2002 and 42,500 in 2003 If the cost of the ED visit is $500, which is 
probably low in many areas, the total cost for 42,500 visits would have 
been $21.25 million for 2003.
    The surge in methamphetamine abuse and the manufacture of the drug 
in clandestine laboratories have caused serious law enforcement and 
environmental problems, particularly in rural communities. Rural areas 
are frequently the site of clandestine laboratories because the 
manufacturing process produces distinctive odors and can be identified 
if there are close neighbors. Besides causing crime as clandestine 
laboratory operators steal ingredients to make methamphetamine and 
steal to support their addiction, the clandestine laboratories often 
leave serious pollution behind. A laboratory can produce 6 to 10 pounds 
of hazardous waste for every pound of methamphetamine produced. As DEA 
noted in its Interim Final Rule implementing the retail sales 
requirements of the Combat Methamphetamine Epidemic Act of 2005 (CMEA) 
(Title VII of Pub. L. 109-172), clean-up costs in Fiscal Year 2006 were 
more than $12 million (71 FR 56008, September 26, 2006).
    The Federal and State cleanups are generally limited to removing 
chemicals that could be reused; they do not address water and soil 
pollution that remains. Owners of the property are responsible for 
completing the cleanup of contaminated water and soil, but if the owner 
cannot pay the cost, either the local governments must bear the burden 
or the contamination remains.
    This rule is intended to continue the trend of reducing the number 
of clandestine laboratories. This trend will reduce the cost to State 
and local governments as well as the hazard to law enforcement officers 
and others from exposure to the toxic chemicals left behind.

Executive Order 12988

    This regulation meets the applicable standards set forth in 
Sections 3(a) and 3(b)(2) of Executive Order 12988 Civil Justice 
Reform.

Executive Order 13132

    This rulemaking does not preempt or modify any provision of state 
law; nor does it impose enforcement responsibilities on any state; nor 
does it diminish the power of any state to enforce its own laws. 
Accordingly, this rulemaking does not have federalism implications 
warranting the application of Executive Order 13132.

Unfunded Mandates Reform Act of 1995

    This rule will not result in the expenditure by state, local, and 
tribal governments, in the aggregate, or by the private sector, of 
$120,000,000 or more (adjusted for inflation) in any one year, and will 
not significantly or uniquely affect small governments. Therefore, no 
actions were deemed necessary under the provisions of the Unfunded 
Mandates Reform Act of 1995.

Congressional Review Act

    This rule is not a major rule as defined by Section 804 of the 
Small Business Regulatory Enforcement Fairness Act of 1996 
(Congressional Review Act). This rule will not result in an annual 
effect on the economy of $100,000,000 or more; a major increase in cost 
or prices; or significant adverse effects on competition, employment, 
investment, productivity, innovation, or

[[Page 36312]]

on the ability of United States-based companies to compete with 
foreign-based companies in domestic and export markets.

Paperwork Reduction Act

    This rule proposes that chemical mixtures containing 80 percent and 
less of red phosphorus or 30 percent and less of hypophosphorous acid 
or its salts are automatically exempt from CSA regulatory controls 
pertaining to chemicals and that no automatic exemption be established 
for chemical mixtures containing white phosphorus. Under this proposed 
method of automatic exemption, persons who handle these exempt chemical 
mixtures will not be subject to CSA regulatory controls, including the 
requirement to register with DEA, the requirement to report 
manufacturing activities to DEA annually, and the requirement to file 
importation and exportation advance notification and return declaration 
information with DEA. For persons handling regulated chemical mixtures, 
DEA anticipates granting some of these mixtures exempt status by the 
application process (21 CFR 1310.13).
    At this time, DEA lacks specific information regarding the 
potential impact of this regulation on the regulated industry. DEA does 
not believe that the impact will be significant, and has been unable to 
identify any chemical mixtures that are certain to be affected by this 
regulation. DEA also anticipates that some chemical mixtures would be 
granted exemptions based on the application process.
    DEA does not have reliable estimates regarding the number of 
persons who would be required to register as a result of the control of 
chemical mixtures containing regulated forms of phosphorus. Nor does 
DEA have accurate estimates regarding manufacturing, import and export 
activities involving chemicals mixtures addressed in this rulemaking. 
Responses to the previous Advance Notice of Proposed Rulemaking did not 
address this issue. Therefore, DEA is specifically seeking information 
regarding the number of persons affected, and the potential number of 
importation and exportation transactions that would be affected by this 
regulation. Therefore, DEA will revise three existing information 
collections related to the handling of chemical mixtures containing 
listed forms of phosphorus once it receives further information:
     ``Application for Registration under Domestic Chemical 
Diversion Control Act of 1993 and Renewal Application for Registration 
under Domestic Chemical Diversion Control Act of 1993'' [OMB 
information collection 1117-0031]
     ``Annual Reporting Requirement for Manufacturers of Listed 
Chemicals'' [OMB information collection 1117-0029]
     ``Import/Export Declaration for List I and List II 
Chemicals'' [OMB information collection 1117-0023]

List of Subjects in 21 CFR Part 1310

    Drug traffic control, List I and List II chemicals, reporting 
requirements.
    For the reasons set out above, 21 CFR Part 1310 is proposed to be 
amended as follows:

PART 1310-- RECORDS AND REPORTS OF LISTED CHEMICALS AND CERTAIN 
MACHINES [AMENDED]

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

    Authority:  21 U.S.C. 802, 827(h), 830, 871(b), 890.
    2. Section 1310.09 is amended by revising paragraph (k) to read as 
follows:

Sec.  1310.09  Temporary Exemption From Registration.

* * * * *
    (k) Each person required by Sections 302 and 1007 of the Act (21 
U.S.C. 822 and 957) to obtain a registration to manufacture, 
distribute, import, or export regulated chemical mixtures which contain 
red phosphorus, white phosphorus, hypophosphorous acid (and its salts), 
pursuant to Sections 1310.12 and 1310.13, is temporarily exempted from 
the registration requirement, provided that DEA receives a properly 
completed application for registration or application for exemption on 
or before July 26, 2010. The exemption will remain in effect for each 
person who has made such application until the Administrator 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. Any person who manufactures, 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.
    3. Section 1310.12 is amended by revising paragraph (a) and by 
amending the Table of Concentration Limits in paragraph (c) by adding 
entries for ``hypophosphorous acid and its salts'', ``red phosphorus'', 
and ``white phosphorus'' in alphabetical order to read as follows:

Sec.  1310.12  Exempt Chemical Mixtures.

    (a) The chemical mixtures meeting the criteria in paragraphs (c) or 
(d) of this Section are exempted by the Administrator from application 
of Sections 302, 303, 310, 1007, 1008, and 1018 of the Act (21 U.S.C. 
822, 823, 830, 957, 958, and 971) to the extent described in paragraphs 
(b) and (c) of this Section.
* * * * *
    (c) * * *

                                          Table of Concentration Limits
----------------------------------------------------------------------------------------------------------------
                                         DEA chemical
           List I chemicals               code number    Concentration (percent)         Special conditions
----------------------------------------------------------------------------------------------------------------

                                                  * * * * * * *
Hypophosphorous acid and its salts....            6797  30% by weight if a solid,  The weight is determined by
                                                         weight or volume if a      measuring the mass of
                                                         liquid.                    hypophosphorous acid and its
                                                                                    salts in the mixture; the
                                                                                    concentration limit is
                                                                                    calculated by summing the
                                                                                    concentrations of all forms
                                                                                    of hypophosphorous acid and
                                                                                    its salts in the mixture.
                                                                                    The Administration does not
                                                                                    consider a chemical mixture
                                                                                    to mean the combination of a
                                                                                    listed chemical and an inert
                                                                                    carrier. Therefore, any
                                                                                    solution consisting of
                                                                                    hypophosphorous acid (and
                                                                                    its salts), dispersed in
                                                                                    water, alcohol, or another
                                                                                    inert carrier, is not
                                                                                    considered a chemical
                                                                                    mixture and is therefore
                                                                                    subject to chemical
                                                                                    regulatory controls at all
                                                                                    concentrations.

[[Page 36313]]

                                                  * * * * * * *
Red Phosphorus........................            6795  80% by weight............

                                                  * * * * * * *
White phosphorus......................            6796  Not exempt at any          Chemical mixtures containing
                                                         concentration.             any amount of white
                                                                                    phosphorus are not exempt
                                                                                    due to concentration, unless
                                                                                    otherwise exempted.

                                                  * * * * * * *
List II chemicals.....................

                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------

* * * * *
    4. Section 1310.13 is amended by revising paragraph (e) and 
paragraph (i) introductory text to read as follows:

Sec.  1310.13  Exemption of chemical mixtures; application.

* * * * *
    (e) Within a reasonable period of time after the receipt of an 
application for an exemption under this section, the Administrator will 
notify the applicant in writing of the acceptance or rejection of the 
application for filing. If the application is not accepted for filing, 
an explanation will be provided. The Administrator is not required to 
accept an application if any information required pursuant to paragraph 
(c) of this section or requested pursuant to paragraph (d) of this 
section is lacking or not readily understood. The applicant may, 
however, amend the application to meet the requirements of paragraphs 
(c) and (d) of this section. If the exemption is subsequently granted, 
the applicant shall again be notified in writing and the Administrator 
shall issue, and publish in the Federal Register, an order on the 
application. This order shall specify the date on which it shall take 
effect. The Administrator shall permit any interested person to file 
written comments on or objections to the order. If any comments or 
objections raise significant issues regarding any findings of fact or 
conclusions of law upon which the order is based, the Administrator may 
suspend the effectiveness of the order until he has reconsidered the 
application in light of the comments and objections filed. Thereafter, 
the Administrator shall reinstate, terminate, or amend the original 
order as deemed appropriate.
* * * * *
    (i) The following chemical mixtures, in the form and quantity 
listed in the application submitted (indicated as the ``date'') are 
designated as exempt chemical mixtures for the purposes set forth in 
this section and are exempted by the Administrator from application of 
Sections 302, 303, 310, 1007, 1008, and 1018 of the Act (21 U.S.C. 822, 
823, 830, 957, 958, and 971):
* * * * *

    Dated: June 16, 2010.
Michele M. Leonhart,
Acting Administrator.
[FR Doc. 2010-15160 Filed 6-24-10; 8:45 am]
BILLING CODE 4410-09-P
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