II

103D CONGRESS

1ST SESSION S. 1663

To amend the Comprehensive Drug Abuse Prevention and Control Act of

1970 to control the diversion of certain chemicals used in the illicit

production of controlled substances such as methcathinone and methamphetamine, and for other purposes.

IN THE SENATE OF THE UNITED STATES

NOVEMBER 17 (legislative day, NOVEMBER 2), 1993

Mr. LEVIN (for himself, Mr. RIEGLE, Mr. FEINGOLD, and Mr. KOHL) introduced the following bill; which was read twice and referred to the Committee on the Judiciary

A BILL

To amend the Comprehensive Drug Abuse Prevention and

Control Act of 1970 to control the diversion of certain

chemicals used in the illicit production of controlled substances such as methcathinone and methamphetamine,

and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Domestic Chemical

5 Diversion Control Act of 1993’’.
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1 SEC. 2. DEFINITION AMENDMENTS.

2 (a) DEFINITIONS.—Section 102 of the Controlled

3 Substances Act (21 U.S.C. 802) is amended—

4 (1) in paragraph (33), by striking ‘‘any listed

5 precursor chemical or listed essential chemical’’ and

6 inserting ‘‘any list I chemical or any list II chemi7 cal’’;

8 (2) in paragraph (34)—

9 (A) by striking ‘‘listed precursor chemical’’

10 and inserting ‘‘list I chemical’’; and

11 (B) by striking ‘‘critical to the creation’’

12 and inserting ‘‘important to the manufacture’’;

13 (3) in paragraph (34)(A), (F), and (H), by in14 serting ‘‘, its esters,’’ before ‘‘and’’;

15 (4) in paragraph (35)—

16 (A) by striking ‘‘listed essential chemical’’

17 and inserting ‘‘list II chemical’’;

18 (B) by inserting ‘‘(other than a list I

19 chemical)’’ before ‘‘specified’’; and

20 (C) by striking ‘‘as a solvent, reagent, or

21 catalyst’’; and

22 (5) in paragraph (38), by inserting ‘‘or who

23 acts as a broker or trader for an international trans24 action involving a listed chemical, a tableting ma25 chine, or an encapsulating machine’’ before the

26 period;
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1 (6) in paragraph (39)(A)—

2 (A) by striking ‘‘importation or exportation

3 of’’ and inserting ‘‘importation, or exportation

4 of, or an international transaction involving

5 shipment of,’’;

6 (B) in clause (iii) by inserting ‘‘or any cat7 egory of transaction for a specific listed chemi8 cal or chemicals’’ after ‘‘transaction’’;

9 (C) by amending clause (iv) to read as

10 follows:

11 ‘‘(iv) any transaction in a listed chemical

12 that is contained in a drug that may be mar13 keted or distributed lawfully in the United

14 States under the Federal Food, Drug, and Cos15 metic Act (21 U.S.C. 301 et seq.) unless—

16 ‘‘(I)(aa) the drug contains ephedrine

17 or its salts, optical isomers, or salts of op18 tical isomers as the only active medicinal

19 ingredient or contains ephedrine or its

20 salts, optical isomers, or salts of optical

21 isomers and therapeutically insignificant

22 quantities of another active medicinal in23 gredient; or

24 ‘‘(bb) the Attorney General has deter25 mined under section 204 that the drug or
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1 group of drugs is being diverted to obtain

2 the listed chemical for use in the illicit pro3 duction of a controlled substance; and

4 ‘‘(II) the quantity of ephedrine or

5 other listed chemical contained in the drug

6 included in the transaction or multiple

7 transactions equals or exceeds the thresh8 old established for that chemical by the

9 Attorney General.’’; and

10 (D) in clause (v), by striking the semicolon

11 and inserting ‘‘which the Attorney General has

12 by regulation designated as exempt from the

13 application of this title and title II based on a

14 finding that the mixture is formulated in such

15 a way that it cannot be easily used in the illicit

16 production of a controlled substance and that

17 the listed chemical or chemicals contained in

18 the mixture cannot be readily recovered;’’;

19 (7) in paragraph (40), by striking ‘‘listed pre20 cursor chemical or a listed essential chemical’’ each

21 place it appears and inserting ‘‘list I chemical or a

22 list II chemical’’; and

23 (8) by adding at the end the following new

24 paragraphs:
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1 ‘‘(42) The term ‘international transaction’ means a

2 transaction involving the shipment of a listed chemical

3 across an international border (other than a United States

4 border) in which a broker or trader located in the United

5 States participates.

6 ‘‘(43) The terms ‘broker’ and ‘trader’ mean a person

7 that assists in arranging an international transaction in

8 a listed chemical by—

9 ‘‘(A) negotiating contracts;

10 ‘‘(B) serving as an agent or intermediary; or

11 ‘‘(C) bringing together a buyer and seller, a

12 buyer and transporter, or a seller and transporter.’’.

13 (b) REMOVAL OF EXEMPTION OF CERTAIN DRUGS.—

14 (1) PROCEDURE.—Part B of the Controlled

15 Substances Act (21 U.S.C. 811 et seq.) is amended

16 by adding at the end the following new section:

17 ‘‘REMOVAL OF EXEMPTION OF CERTAIN DRUGS

18 ‘‘SEC. 204. (a) REMOVAL OF EXEMPTION.—The At19 torney General shall by regulation remove from exemption

20 under section 102(39)(A)(iv) a drug or group of drugs

21 that the Attorney General finds is being diverted to obtain

22 a listed chemical for use in the illicit production of a con23 trolled substance.

24 ‘‘(b) FACTORS TO BE CONSIDERED.—In removing a

25 drug or group of drugs from exemption under subsection

26 (a), the Attorney General shall consider, with respect to
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1 a drug or group of drugs that is proposed to be removed

2 from exemption—

3 ‘‘(1) the scope, duration, and significance of the

4 diversion;

5 ‘‘(2) whether the drug or group of drugs is for6 mulated in such a way that it cannot be easily used

7 in the illicit production of a controlled substance;

8 and

9 ‘‘(3) whether the listed chemical can be readily

10 recovered from the drug or group of drugs.

11 ‘‘(c) SPECIFICITY OF DESIGNATION.—The Attorney

12 General shall limit the designation of a drug or a group

13 of drugs removed from exemption under subsection (a) to

14 the most particularly identifiable type of drug or group

15 of drugs for which evidence of diversion exists unless there

16 is evidence, based on the pattern of diversion and other

17 relevant factors, that the diversion will not be limited to

18 that particular drug or group of drugs.

19 ‘‘(d) REINSTATEMENT OF EXEMPTION WITH RE20 SPECT TO PARTICULAR DRUG PRODUCTS.—

21 ‘‘(1) REINSTATEMENT.—On application by a

22 manufacturer of a particular drug product that has

23 been removed from exemption under subsection (a),

24 the Attorney General shall by regulation reinstate

25 the exemption with respect to that particular drug
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1 product if the Attorney General determines that the

2 particular drug product is manufactured and distrib3 uted in a manner that prevents diversion.

4 ‘‘(2) FACTORS TO BE CONSIDERED.—In decid5 ing whether to reinstate the exemption with respect

6 to a particular drug product under paragraph (1),

7 the Attorney General shall consider—

8 ‘‘(A) the package sizes and manner of

9 packaging of the drug product;

10 ‘‘(B) the manner of distribution and adver11 tising of the drug product;

12 ‘‘(C) evidence of diversion of the drug

13 product;

14 ‘‘(D) any actions taken by the manufac15 turer to prevent diversion of the drug product;

16 and

17 ‘‘(E) such other factors as are relevant to

18 and consistent with the public health and safe19 ty, including the factors described in subsection

20 (b) as applied to the drug product.

21 ‘‘(3) STATUS PENDING APPLICATION FOR REIN22 STATEMENT.—A transaction involving a particular

23 drug product that is the subject of a bona fide pend24 ing application for reinstatement of exemption filed

25 with the Attorney General not later than 60 days
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1 after a regulation removing the exemption is issued

2 pursuant to subsection (a) shall not be considered to

3 be a regulated transaction if the transaction occurs

4 during the pendency of the application and, if the

5 Attorney General denies the application, during the

6 period of 60 days following the date on which the

7 Attorney General denies the application, unless—

8 ‘‘(A) the Attorney General has evidence

9 that, applying the factors described in sub10 section (b) to the drug product, the drug prod11 uct is being diverted; and

12 ‘‘(B) the Attorney General so notifies the

13 applicant.

14 ‘‘(4) AMENDMENT AND MODIFICATION.—A reg15 ulation reinstating an exemption under paragraph

16 (1) may be modified or revoked with respect to a

17 particular drug product upon a finding that—

18 ‘‘(A) applying the factors described in sub19 section (b) to the drug product, the drug prod20 uct is being diverted; or

21 ‘‘(B) there is a significant change in the

22 data that led to the issuance of the regula23 tion.’’.

24 (2) CLERICAL AMENDMENT.—The table of con25 tents of the Comprehensive Drug Abuse Prevention
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1 and Control Act of 1970 (84 Stat. 1236) is amended

2 by adding at the end of that portion relating to part

3 B of title II the following new item:

‘‘Sec. 204. Removal of exemption of certain drugs.’’.

4 (c) REGULATION OF LISTED CHEMICALS.—Section

5 310 of the Controlled Substances Act (21 U.S.C. 830) is

6 amended—

7 (1) in subsection (a)(1)—

8 (A) by striking ‘‘precursor chemical’’ and

9 inserting ‘‘list I chemical’’; and

10 (B) in subparagraph (B), by striking ‘‘an

11 essential chemical’’ and inserting ‘‘a list II

12 chemical’’; and

13 (2) in subsection (c)(2)(D), by striking ‘‘precur14 sor chemical’’ and inserting ‘‘chemical control’’.

15 SEC. 3. REGISTRATION REQUIREMENTS.

16 (a) RULES AND REGULATIONS.—Section 301 of the

17 Controlled Substances Act (21 U.S.C. 821) is amended

18 by striking the period and inserting ‘‘and to the registra19 tion and control of regulated persons and of regulated

20 transactions.’’.

21 (b) PERSONS REQUIRED TO REGISTER UNDER SEC22 TION 302.—Section 302 of the Controlled Substances Act

23 (21 U.S.C. 822) is amended—
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1 (1) in subsection (a)(1), by inserting ‘‘or list I

2 chemical’’ after ‘‘controlled substance’’ each place it

3 appears;

4 (2) in subsection (b)—

5 (A) by inserting ‘‘or list I chemicals’’ after

6 ‘‘controlled substances’’; and

7 (B) by inserting ‘‘or chemicals’’ after

8 ‘‘such substances’’;

9 (3) in subsection (c), by inserting ‘‘or list I

10 chemical’’ after ‘‘controlled substance’’ each place it

11 appears; and

12 (4) in subsection (e), by inserting ‘‘or list I

13 chemicals’’ after ‘‘controlled substances’’.

14 (c) REGISTRATION REQUIREMENTS UNDER SECTION

15 303.—Section 303 of the Controlled Substances Act (21

16 U.S.C. 823) is amended by adding at the end the following

17 new subsection:

18 ‘‘(h) The Attorney General shall register an applicant

19 to distribute a list I chemical unless the Attorney General

20 determines that registration of the applicant is inconsist21 ent with the public interest. Registration under this sub22 section shall not be required for the distribution of a drug

23 product that is exempted under section 102(39)(A)(iv). In

24 determining the public interest for the purposes of this

25 subsection, the Attorney General shall consider—
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1 ‘‘(1) maintenance by the applicant of effective

2 controls against diversion of listed chemicals into

3 other than legitimate channels;

4 ‘‘(2) compliance by the applicant with applica5 ble Federal, State, and local law;

6 ‘‘(3) any prior conviction record of the appli7 cant under Federal or State laws relating to con8 trolled substances or to chemicals controlled under

9 Federal or State law;

10 ‘‘(4) any past experience of the applicant in the

11 manufacture and distribution of chemicals; and

12 ‘‘(5) such other factors as are relevant to and

13 consistent with the public health and safety.’’.

14 (d) DENIAL, REVOCATION, OR SUSPENSION OF REG15 ISTRATION.—Section 304 of the Controlled Substances

16 Act (21 U.S.C. 824) is amended—

17 (1) in subsection (a)—

18 (A) by inserting ‘‘or a list I chemical’’

19 after ‘‘controlled substance’’ each place it ap20 pears; and

21 (B) by inserting ‘‘or list I chemicals’’ after

22 ‘‘controlled substances’’;

23 (2) in subsection (b), by inserting ‘‘or list I

24 chemical’’ after ‘‘controlled substance’’;
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1 (3) in subsection (f), by inserting ‘‘or list I

2 chemicals’’ after ‘‘controlled substances’’ each place

3 it appears; and

4 (4) in subsection (g)—

5 (A) by inserting ‘‘or list I chemicals’’ after

6 ‘‘controlled substances’’ each place it appears;

7 and

8 (B) by inserting ‘‘or list I chemical’’ after

9 ‘‘controlled substance’’ each place it appears.

10 (e) PERSONS REQUIRED TO REGISTER UNDER SEC11 TION 1007.—Section 1007 of the Controlled Substances

12 Import and Export Act (21 U.S.C. 957) is amended—

13 (1) in subsection (a)—

14 (A) in paragraph (1), by inserting ‘‘or list

15 I chemical’’ after ‘‘controlled substance’’; and

16 (B) in paragraph (2), by striking ‘‘in

17 schedule I, II, III, IV, or V,’’ and inserting ‘‘or

18 list I chemical,’’; and

19 (2) in subsection (b)—

20 (A) in paragraph (1), by inserting ‘‘or list

21 I chemical’’ after ‘‘controlled substance’’ each

22 place it appears; and

23 (B) in paragraph (2), by inserting ‘‘or list

24 I chemicals’’ after ‘‘controlled substances’’.
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1 (f) REGISTRATION REQUIREMENTS UNDER SECTION

2 1008.—Section 1008 of the Controlled Substances Import

3 and Export Act (21 U.S.C. 958) is amended—

4 (1) in subsection (c)—

5 (A) by inserting ‘‘(1)’’ after ‘‘(c)’’; and

6 (B) by adding at the end the following new

7 paragraph:

8 ‘‘(2)(A) The Attorney General shall register an appli9 cant to import or export a list I chemical unless the Attor10 ney General determines that registration of the applicant

11 is inconsistent with the public interest. Registration under

12 this subsection shall not be required for the import or ex13 port of a drug product that is exempted under section

14 102(39)(A)(iv).

15 ‘‘(B) In determining the public interest for the pur16 poses of subparagraph (A), the Attorney General shall

17 consider the factors specified in section 303(h).’’;

18 (2) in subsection (d)—

19 (A) in paragraph (3), by inserting ‘‘or list

20 I chemical or chemicals,’’ after ‘‘substances,’’;

21 and

22 (B) in paragraph (6), by inserting ‘‘or list

23 I chemicals’’ after ‘‘controlled substances’’ each

24 place it appears;
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1 (3) in subsection (e), by striking ‘‘and 307’’

2 and inserting ‘‘307, and 310’’; and

3 (4) in subsections (f), (g), and (h), by inserting

4 ‘‘or list I chemicals’’ after ‘‘controlled substances’’

5 each place it appears.

6 (g) PROHIBITED ACTS C.—Section 403(a) of the

7 Controlled Substances Act (21 U.S.C. 843(a)) is amend8 ed—

9 (1) by amending paragraphs (6) and (7) to

10 read as follows:

11 ‘‘(6) to possess any three-neck round-bottom

12 flask, tableting machine, encapsulating machine, or

13 gelatin capsule, or any equipment, chemical, prod14 uct, or material which may be used to manufacture

15 a controlled substance or listed chemical, knowing,

16 intending, or having reasonable cause to believe, that

17 it will be used to manufacture a controlled substance

18 or listed chemical in violation of this title or title II;

19 ‘‘(7) to manufacture, distribute, export, or im20 port any three-neck round-bottom flask, tableting

21 machine, encapsulating machine, or gelatin capsule,

22 or any equipment, chemical, product, or material

23 which may be used to manufacture a controlled sub24 stance or listed chemical, knowing, intending, or

25 having reasonable cause to believe, that it will be
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1 used to manufacture a controlled substance or listed

2 chemical in violation of this title or title II or, in the

3 case of an exportation, in violation of this title or

4 title II or of the laws of the country to which it is

5 exported;’’;

6 (2) by striking the period at the end of para7 graph (8) and inserting ‘‘; or’’; and

8 (3) by adding at the end the following new

9 paragraph:

10 ‘‘(9) if the person is a regulated person, to dis11 tribute, import, or export a list I chemical without

12 the registration required by this Act.’’.

13 SEC. 4. ANTI-SMUGGLING PROVISION.

14 Section 1010(d) of the Controlled Substances Import

15 and Export Act (21 U.S.C. 960(d)) is amended—

16 (1) by striking ‘‘or’’ at the end of paragraph

17 (1); and

18 (2) by adding at the end the following new

19 paragraph:

20 ‘‘(3) imports or exports a listed chemical in vio21 lation of section 1007 or 1018,’’.

22 SEC. 5. ADMINISTRATIVE INSPECTIONS AND AUTHORITY.

23 Section 510 of the Controlled Substances Act (21

24 U.S.C. 880) is amended—
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1 (1) by amending subsection (a)(2) to read as

2 follows:

3 ‘‘(2) places, including factories, warehouses,

4 and other establishments, and conveyances, where

5 persons registered under section 303 (or exempt

6 from registration under section 302(d) or by regula7 tion of the Attorney General) or regulated persons

8 may lawfully hold, manufacture, distribute, dispense,

9 administer, or otherwise dispose of controlled sub10 stances or listed chemicals or where records relating

11 to those activities are maintained.’’; and

12 (2) in subsection (b)(3)—

13 (A) in subparagraph (B), by inserting ‘‘,

14 listed chemicals,’’ after ‘‘unfinished drugs’’; and

15 (B) in subparagraph (C), by inserting ‘‘or

16 listed chemical’’ after ‘‘controlled substance’’

17 and inserting ‘‘or chemical’’ after ‘‘such sub18 stance’’.

19 SEC. 6. FORFEITURE EXPANSION.

20 Section 511(a)(6) of the Controlled Substances Act

21 (21 U.S.C. 881(a)(6)) is amended by inserting ‘‘or listed

22 chemical’’ after ‘‘controlled substance’’.

23 SEC. 7. THRESHOLD AMOUNTS.

24 Section 102(39)(A) of the Controlled Substances Act

25 (21 U.S.C. 802(39)(A)), as amended by section 2, is
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1 amended by inserting ‘‘a listed chemical, or if the Attorney

2 General establishes a threshold amount for a specific listed

3 chemical,’’ before ‘‘a threshold amount, including a cumu4 lative threshold amount for multiple transactions’’.

5 SEC. 8. EFFECTIVE DATE.

6 This Act and the amendments made by this Act shall

7 take effect on the date that is 120 days after the date

8 of enactment of this Act.

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