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[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[S. 1767 Engrossed in Senate (ES)]

103d CONGRESS

  1st Session

                                S. 1767

_______________________________________________________________________

                                 AN ACT

  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.
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
103d CONGRESS
  1st Session
                                S. 1767

_______________________________________________________________________

                                 AN ACT

 
  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.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Domestic Chemical Diversion Control 
Act of 1993''.

SEC. 2. DEFINITION AMENDMENTS.

    (a) Definitions.--Section 102 of the Controlled Substances Act (21 
U.S.C. 802) is amended--
            (1) in paragraph (33), by striking ``any listed precursor 
        chemical or listed essential chemical'' and inserting ``any 
        list I chemical or any list II chemical'';
            (2) in paragraph (34)--
                    (A) by striking ``listed precursor chemical'' and 
                inserting ``list I chemical''; and
                    (B) by striking ``critical to the creation'' and 
                inserting ``important to the manufacture'';
            (3) in paragraph (34) (A), (F), and (H), by inserting ``, 
        its esters,'' before ``and'';
            (4) in paragraph (35)--
                    (A) by striking ``listed essential chemical'' and 
                inserting ``list II chemical'';
                    (B) by inserting ``(other than a list I chemical)'' 
                before ``specified''; and
                    (C) by striking ``as a solvent, reagent, or 
                catalyst''; and
            (5) in paragraph (38), by inserting ``or who acts as a 
        broker or trader for an international transaction involving a 
        listed chemical, a tableting machine, or an encapsulating 
        machine'' before the period;
            (6) in paragraph (39)(A)--
                    (A) by striking ``importation or exportation of'' 
                and inserting ``importation, or exportation of, or an 
                international transaction involving shipment of,'';
                    (B) in clause (iii) by inserting ``or any category 
                of transaction for a specific listed chemical or 
                chemicals'' after ``transaction'';
                    (C) by amending clause (iv) to read as follows:
                    ``(iv) any transaction in a listed chemical that is 
                contained in a drug that may be marketed or distributed 
                lawfully in the United States under the Federal Food, 
                Drug, and Cosmetic Act (21 U.S.C. 301 et seq.) unless--
                            ``(I)(aa) the drug contains ephedrine or 
                        its salts, optical isomers, or salts of optical 
                        isomers as the only active medicinal ingredient 
                        or contains ephedrine or its salts, optical 
                        isomers, or salts of optical isomers and 
                        therapeutically insignificant quantities of 
                        another active medicinal ingredient; or
                            ``(bb) the Attorney General has determined 
                        under section 204 that the drug or group of 
                        drugs is being diverted to obtain the listed 
                        chemical for use in the illicit production of a 
                        controlled substance; and
                            ``(II) the quantity of ephedrine or other 
                        listed chemical contained in the drug included 
                        in the transaction or multiple transactions 
                        equals or exceeds the threshold established for 
                        that chemical by the Attorney General.''; and
                    (D) in clause (v), by striking the semicolon and 
                inserting ``which the Attorney General has by 
                regulation designated as exempt from the application of 
                this title and title III 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;'';
            (7) in paragraph (40), by striking ``listed precursor 
        chemical or a listed essential chemical'' each place it appears 
        and inserting ``list I chemical or a list II chemical''; and
            (8) by adding at the end the following new paragraphs:
    ``(42) The term `international transaction' means a transaction 
involving the shipment of a listed chemical across an international 
border (other than a United States border) in which a broker or trader 
located in the United States participates.
    ``(43) The terms `broker' and `trader' mean a person that assists 
in arranging an international transaction in a listed chemical by--
            ``(A) negotiating contracts;
            ``(B) serving as an agent or intermediary; or
            ``(C) bringing together a buyer and seller, a buyer and 
        transporter, or a seller and transporter.''.
    (b) Removal of Exemption of Certain Drugs.--
            (1) Procedure.--Part B of the Controlled Substances Act (21 
        U.S.C. 811 et seq.) is amended by adding at the end the 
        following new section:

                ``removal of exemption of certain drugs

    ``Sec. 204. (a) Removal of Exemption.--The Attorney General shall 
by regulation remove from exemption under section 102(39)(A)(iv) a drug 
or group of drugs that the Attorney General finds is being diverted to 
obtain a listed chemical for use in the illicit production of a 
controlled substance.
    ``(b) Factors To Be Considered.--In removing a drug or group of 
drugs from exemption under subsection (a), the Attorney General shall 
consider, with respect to a drug or group of drugs that is proposed to 
be removed from exemption--
            ``(1) the scope, duration, and significance of the 
        diversion;
            ``(2) whether the drug or group of drugs is formulated in 
        such a way that it cannot be easily used in the illicit 
        production of a controlled substance; and
            ``(3) whether the listed chemical can be readily recovered 
        from the drug or group of drugs.
    ``(c) Specificity of Designation.--The Attorney General shall limit 
the designation of a drug or a group of drugs removed from exemption 
under subsection (a) to the most particularly identifiable type of drug 
or group of drugs for which evidence of diversion exists unless there 
is evidence, based on the pattern of diversion and other relevant 
factors, that the diversion will not be limited to that particular drug 
or group of drugs.
    ``(d) Reinstatement of Exemption With Respect to Particular Drug 
Products.--
            ``(1) Reinstatement.--On application by a manufacturer of a 
        particular drug product that has been removed from exemption 
        under subsection (a), the Attorney General shall by regulation 
        reinstate the exemption with respect to that particular drug 
        product if the Attorney General determines that the particular 
        drug product is manufactured and distributed in a manner that 
        prevents diversion.
            ``(2) Factors to be considered.--In deciding whether to 
        reinstate the exemption with respect to a particular drug 
        product under paragraph (1), the Attorney General shall 
        consider--
                    ``(A) the package sizes and manner of packaging of 
                the drug product;
                    ``(B) the manner of distribution and advertising of 
                the drug product;
                    ``(C) evidence of diversion of the drug product;
                    ``(D) any actions taken by the manufacturer to 
                prevent diversion of the drug product; and
                    ``(E) such other factors as are relevant to and 
                consistent with the public health and safety, including 
                the factors described in subsection (b) as applied to 
                the drug product.
            ``(3) Status pending application for reinstatement.--A 
        transaction involving a particular drug product that is the 
        subject of a bona fide pending application for reinstatement of 
        exemption filed with the Attorney General not later than 60 
        days after a regulation removing the exemption is issued 
        pursuant to subsection (a) shall not be considered to be a 
        regulated transaction if the transaction occurs during the 
        pendency of the application and, if the Attorney General denies 
        the application, during the period of 60 days following the 
        date on which the Attorney General denies the application, 
        unless--
                    ``(A) the Attorney General has evidence that, 
                applying the factors described in subsection (b) to the 
                drug product, the drug product is being diverted; and
                    ``(B) the Attorney General so notifies the 
                applicant.
            ``(4) Amendment and modification.--A regulation reinstating 
        an exemption under paragraph (1) may be modified or revoked 
        with respect to a particular drug product upon a finding that--
                    ``(A) applying the factors described in subsection 
                (b) to the drug product, the drug product is being 
                diverted; or
                    ``(B) there is a significant change in the data 
                that led to the issuance of the regulation.''.
            (2) Clerical amendment.--The table of contents of the 
        Comprehensive Drug Abuse Prevention and Control Act of 1970 (84 
        Stat. 1236) is amended by adding at the end of that portion 
        relating to part B of title II the following new item:

``Sec. 204. Removal of exemption of certain drugs.''.
    (c) Regulation of Listed Chemicals.--Section 310 of the Controlled 
Substances Act (21 U.S.C. 830) is amended--
            (1) in subsection (a)(1)--
                    (A) by striking ``precursor chemical'' and 
                inserting ``list I chemical''; and
                    (B) in subparagraph (B), by striking ``an essential 
                chemical'' and inserting ``a list II chemical''; and
            (2) in subsection (c)(2)(D), by striking ``precursor 
        chemical'' and inserting ``chemical control''.

SEC. 3. REGISTRATION REQUIREMENTS.

    (a) Rules and Regulations.--Section 301 of the Controlled 
Substances Act (21 U.S.C. 821) is amended by striking the period and 
inserting ``and to the registration and control of regulated persons 
and of regulated transactions.''.
    (b) Persons Required To Register Under Section 302.--Section 302 of 
the Controlled Substances Act (21 U.S.C. 822) is amended--
            (1) in subsection (a)(1), by inserting ``or list I 
        chemical'' after ``controlled substance'' each place it 
        appears;
            (2) in subsection (b)--
                    (A) by inserting ``or list I chemicals'' after 
                ``controlled substances''; and
                    (B) by inserting ``or chemicals'' after ``such 
                substances'';
            (3) in subsection (c), by inserting ``or list I chemical'' 
        after ``controlled substance'' each place it appears; and
            (4) in subsection (e), by inserting ``or list I chemicals'' 
        after ``controlled substances''.
    (c) Registration Requirements Under Section 303.--Section 303 of 
the Controlled Substances Act (21 U.S.C. 823) is amended by adding at 
the end the following new subsection:
    ``(h) The Attorney General shall register an applicant to 
distribute a list I chemical unless the Attorney General determines 
that registration of the applicant is inconsistent with the public 
interest. Registration under this subsection shall not be required for 
the distribution of a drug product that is exempted under section 
102(39)(A)(iv). In determining the public interest for the purposes of 
this subsection, the Attorney General shall consider--
            ``(1) maintenance by the applicant of effective controls 
        against diversion of listed chemicals into other than 
        legitimate channels;
            ``(2) compliance by the applicant with applicable Federal, 
        State, and local law;
            ``(3) any prior conviction record of the applicant under 
        Federal or State laws relating to controlled substances or to 
        chemicals controlled under Federal or State law;
            ``(4) any past experience of the applicant in the 
        manufacture and distribution of chemicals; and
            ``(5) such other factors as are relevant to and consistent 
        with the public health and safety.''.
    (d) Denial, Revocation, or Suspension of Registration.--Section 304 
of the Controlled Substances Act (21 U.S.C. 824) is amended--
            (1) in subsection (a)--
                    (A) by inserting ``or a list I chemical'' after 
                ``controlled substance'' each place it appears; and
                    (B) by inserting ``or list I chemicals'' after 
                ``controlled substances'';
            (2) in subsection (b), by inserting ``or list I chemical'' 
        after ``controlled substance'';
            (3) in subsection (f), by inserting ``or list I chemicals'' 
        after ``controlled substances'' each place it appears; and
            (4) in subsection (g)--
                    (A) by inserting ``or list I chemicals'' after 
                ``controlled substances'' each place it appears; and
                    (B) by inserting ``or list I chemical'' after 
                ``controlled substance'' each place it appears.
    (e) Persons Required To Register Under Section 1007.--Section 1007 
of the Controlled Substances Import and Export Act (21 U.S.C. 957) is 
amended--
            (1) in subsection (a)--
                    (A) in paragraph (1), by inserting ``or list I 
                chemical'' after ``controlled substance''; and
                    (B) in paragraph (2), by striking ``in schedule I, 
                II, III, IV, or V,'' and inserting ``or list I 
                chemical,''; and
            (2) in subsection (b)--
                    (A) in paragraph (1), by inserting ``or list I 
                chemical'' after ``controlled substance'' each place it 
                appears; and
                    (B) in paragraph (2), by inserting ``or list I 
                chemicals'' after ``controlled substances''.
    (f) Registration Requirements Under Section 1008.--Section 1008 of 
the Controlled Substances Import and Export Act (21 U.S.C. 958) is 
amended--
            (1) in subsection (c)--
                    (A) by inserting ``(1)'' after ``(c)''; and
                    (B) by adding at the end the following new 
                paragraph:
    ``(2)(A) The Attorney General shall register an applicant to import 
or export a list I chemical unless the Attorney General determines that 
registration of the applicant is inconsistent with the public interest. 
Registration under this subsection shall not be required for the import 
or export of a drug product that is exempted under section 
102(39)(A)(iv).
    ``(B) In determining the public interest for the purposes of 
subparagraph (A), the Attorney General shall consider the factors 
specified in section 303(h).'';
            (2) in subsection (d)--
                    (A) in paragraph (3), by inserting ``or list I 
                chemical or chemicals,'' after ``substances,''; and
                    (B) in paragraph (6), by inserting ``or list I 
                chemicals'' after ``controlled substances'' each place 
                it appears;
            (3) in subsection (e), by striking ``and 307'' and 
        inserting ``307, and 310''; and
            (4) in subsections (f), (g), and (h), by inserting ``or 
        list I chemicals'' after ``controlled substances'' each place 
        it appears.
    (g) Prohibited Acts C.--Section 403(a) of the Controlled Substances 
Act (21 U.S.C. 843(a)) is amended--
            (1) by amending paragraphs (6) and (7) to read as follows:
            ``(6) to possess any three-neck round-bottom flask, 
        tableting machine, encapsulating machine, or gelatin capsule, 
        or any equipment, chemical, product, or material which may be 
        used to manufacture a controlled substance or listed chemical, 
        knowing, intending, or having reasonable cause to believe, that 
        it will be used to manufacture a controlled substance or listed 
        chemical in violation of this title or title III;
            ``(7) to manufacture, distribute, export, or import any 
        three-neck round-bottom flask, tableting machine, encapsulating 
        machine, or gelatin capsule, or any equipment, chemical, 
        product, or material which may be used to manufacture a 
        controlled substance or listed chemical, knowing, intending, or 
        having reasonable cause to believe, that it will be used to 
        manufacture a controlled substance or listed chemical in 
        violation of this title or title III or, in the case of an 
        exportation, in violation of this title or title III or of the 
        laws of the country to which it is exported;'';
            (2) by striking the period at the end of paragraph (8) and 
        inserting ``; or''; and
            (3) by adding at the end the following new paragraph:
            ``(9) to distribute, import, or export a list I chemical 
        without the registration required by this title or title 
        III.''.

SEC. 4. REPORTS BY BROKERS AND TRADERS; CRIMINAL PENALTIES.

    (a) Notification, Suspension of Shipment, and Penalties With 
Respect to Importation and Exportation of Listed Chemicals.--Section 
1018 of the Controlled Substances Import and Export Act (21 U.S.C. 971) 
is amended by adding at the end the following new subsection:
    ``(d) A person located in the United States who is a broker or 
trader for an international transaction in a listed chemical that is a 
regulated transaction solely because of that person's involvement as a 
broker or trader shall, with respect to that transaction, be subject to 
all of the notification, reporting, recordkeeping, and other 
requirements placed upon exporters of listed chemicals by this title 
and title II.''.
    (b) Prohibited Acts A.--Section 1010(d) of the Controlled 
Substances Import and Export Act (21 U.S.C. 960(d)) is amended to read 
as follows:
    ``(d) A person who knowingly or intentionally--
            ``(1) imports or exports a listed chemical with intent to 
        manufacture a controlled substance in violation of this title 
        or title II;
            ``(2) exports a listed chemical in violation of the laws of 
        the country to which the chemical is exported or serves as a 
        broker or trader for an international transaction involving a 
        listed chemical, if the transaction is in violation of the laws 
        of the country to which the chemical is exported;
            ``(3) imports or exports a listed chemical knowing, or 
        having reasonable cause to believe, that the chemical will be 
        used to manufacture a controlled substance in violation of this 
        title or title II; or
            ``(4) exports a listed chemical, or serves as a broker or 
        trader for an international transaction involving a listed 
        chemical, knowing, or having reasonable cause to believe, that 
        the chemical will be used to manufacture a controlled substance 
        in violation of the laws of the country to which the chemical 
        is exported,
shall be fined in accordance with title 18, imprisoned not more than 10 
years, or both.''.

SEC. 5. EXEMPTION AUTHORITY; ANTISMUGGLING PROVISION.

    (a) Notification Requirement.--Section 1018 of the Controlled 
Substances Import and Export Act (21 U.S.C. 971), as amended by section 
1505(a) of this Act, is amended by adding at the end the following new 
subsection:
    ``(e)(1) The Attorney General may by regulation require that the 
15-day notification requirement of subsection (a) apply to all exports 
of a listed chemical to a specified country, regardless of the status 
of certain customers in such country as regular customers, if the 
Attorney General finds that such notification is necessary to support 
effective chemical diversion control programs or is required by treaty 
or other international agreement to which the United States is a party.
    ``(2) The Attorney General may by regulation waive the 15-day 
notification requirement for exports of a listed chemical to a 
specified country if the Attorney General determines that such 
notification is not required for effective chemical diversion control. 
If the notification requirement is waived, exporters of the listed 
chemical shall be required to submit to the Attorney General reports of 
individual exportations or periodic reports of such exportation of the 
listed chemical, at such time or times and containing such information 
as the Attorney General shall establish by regulation.
    ``(3) The Attorney General may by regulation waive the 15-day 
notification requirement for the importation of a listed chemical if 
the Attorney General determines that such notification is not necessary 
for effective chemical diversion control. If the notification 
requirement is waived, importers of the listed chemical shall be 
required to submit to the Attorney General reports of individual 
importations or periodic reports of the importation of the listed 
chemical, at such time or times and containing such information as the 
Attorney General shall establish by regulation.''.
    (b) Prohibited Acts A.--Section 1010(d) of the Controlled 
Substances Import and Export Act (21 U.S.C. 960(d)), as amended by 
section 4(b) of this Act, is amended--
            (1) by striking ``or'' at the end of paragraph (3);
            (2) by striking the comma at the end of paragraph (4) and 
        inserting a semicolon; and
            (3) by adding at the end the following new paragraphs:
            ``(5) imports or exports a listed chemical, with the intent 
        to evade the reporting or recordkeeping requirements of section 
        1018 applicable to such importation or exportation by falsely 
        representing to the Attorney General that the importation or 
        exportation qualifies for a waiver of the 15-day notification 
        requirement granted pursuant to section 1018(e) (2) or (3) by 
        misrepresenting the actual country of final destination of the 
        listed chemical or the actual listed chemical being imported or 
        exported; or
            ``(6) imports or exports a listed chemical in violation of 
        section 1007 or 1018,''.

SEC. 6. ADMINISTRATIVE INSPECTIONS AND AUTHORITY.

    Section 510 of the Controlled Substances Act (21 U.S.C. 880) is 
amended--
            (1) by amending subsection (a)(2) to read as follows:
            ``(2) places, including factories, warehouses, and other 
        establishments, and conveyances, where persons registered under 
        section 303 (or exempt from registration under section 302(d) 
        or by regulation of the Attorney General) or regulated persons 
        may lawfully hold, manufacture, distribute, dispense, 
        administer, or otherwise dispose of controlled substances or 
        listed chemicals or where records relating to those activities 
        are maintained.''; and
            (2) in subsection (b)(3)--
                    (A) in subparagraph (B), by inserting ``, listed 
                chemicals,'' after ``unfinished drugs''; and
                    (B) in subparagraph (C), by inserting ``or listed 
                chemical'' after ``controlled substance'' and inserting 
                ``or chemical'' after ``such substance''.

SEC. 7. THRESHOLD AMOUNTS.

    Section 102(39)(A) of the Controlled Substances Act (21 U.S.C. 
802(39)(A)), as amended by section 2, is amended by inserting ``a 
listed chemical, or if the Attorney General establishes a threshold 
amount for a specific listed chemical,'' before ``a threshold amount, 
including a cumulative threshold amount for multiple transactions''.

SEC. 8. AMENDMENTS TO LIST I.

    Section 102(34) of the Controlled Substances Act (21 U.S.C. 
802(34)) is amended--
            (1) by striking subparagraphs (O), (U), and (W);
            (2) by redesignating subparagraphs (P) through (T) as (O) 
        through (S), subparagraph (V) as (T), and subparagraphs (X) and 
        (Y) as (U) and (X), respectively;
            (3) in subparagraph (X), as redesignated by paragraph (2), 
        by striking ``(X)'' and inserting ``(U)''; and
            (4) by inserting after subparagraph (U), as redesignated by 
        paragraph (2), the following new subparagraphs:
                    ``(V) benzaldehyde.
                    ``(W) nitroethane.''.

SEC. 9. ELIMINATION OF REGULAR SUPPLIER STATUS AND CREATION OF REGULAR 
              IMPORTER STATUS.

    (a) Definition.--Section 102(37) of the Controlled Substances Act 
(21 U.S.C. 802(37)) is amended to read as follows:
    ``(37) The term `regular importer' means, with respect to a listed 
chemical, a person that has an established record as an importer of 
that listed chemical that is reported to the Attorney General.''.
    (b) Notification.--Section 1018 of the Controlled Substances Act 
(21 U.S.C. 971) is amended--
            (1) in subsection (b)--
                    (A) in paragraph (1) by striking ``regular supplier 
                of the regulated person'' and inserting ``to an 
                importation by a regular importer''; and
                    (B) in paragraph (2)--
                            (i) by striking ``a customer or supplier of 
                        a regulated person'' and inserting ``a customer 
                        of a regulated person or to an importer''; and
                            (ii) by striking ``regular supplier'' and 
                        inserting ``the importer as a regular 
                        importer''; and
            (2) in subsection (c)(1) by striking ``regular supplier'' 
        and inserting ``regular importer''.

SEC. 10. REPORTING OF LISTED CHEMICAL MANUFACTURING.

    Section 310(b) of the Controlled Substances Act (21 U.S.C. 830(b)) 
is amended--
            (1) by inserting ``(1)'' after ``(b)'';
            (2) by redesignating paragraphs (1), (2), (3), and (4) as 
        subparagraphs (A), (B), (C), and (D), respectively;
            (3) by striking ``paragraph (1)'' each place it appears and 
        inserting ``subparagraph (A)'';
            (4) by striking ``paragraph (2)'' and inserting 
        ``subparagraph (B)'';
            (5) by striking ``paragraph (3)'' and inserting 
        ``subparagraph (C)''; and
            (6) by adding at the end the following new paragraph:
            ``(2) A regulated person that manufactures a listed 
        chemical shall report annually to the Attorney General, in such 
        form and manner and containing such specific data as the 
        Attorney General shall prescribe by regulation, information 
        concerning listed chemicals manufactured by the person. The 
        requirement of the preceding sentence shall not apply to the 
        manufacture of a drug product that is exempted under section 
        102(39)(A)(iv).''.

SEC. 11. EFFECTIVE DATE.

    This Act and the amendments made by this Act shall take effect on 
the date that is 120 days after the date of enactment of this Act.

            Passed the Senate November 20 (legislative day, November 
      2), 1993.

            Attest:

                                                             Secretary.

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