40364 Federal Register / Vol. 63, No. 145 /Wednesday, July 29, 1998 /Rules and Regulations

4. The provisions of the

Administrative Procedure Act requiring

notice of proposed rulemaking, the

opportunity for public participation,

and a delay in effective date, are

inapplicable because this regulation

involves a military or foreign affairs

function of the United States (see 5

U.S.C. 553(a)(1)). Further, no other law

requires that a notice of proposed

rulemaking and an opportunity for

public comment be given for this rule.

Because a notice of proposed

rulemaking and an opportunity for

public comment are not required to be

given for this rule by 5 U.S.C. 553, or

by any other law, the analytical

requirements of the Regulatory

Flexibility Act, 5 U.S.C. 601 et seq., are

inapplicable.

Therefore, this regulation is issued in

final form. Although there is no formal

comment period, public comments on

this regulation are welcome on a

continuing basis. Comments should be

submitted to Sharron Cook, Office of

Exporter Services, Bureau of Export

Administration, Department of

Commerce, PO Box 273, Washington,

DC 20044.

List of Subjects in 15 CFR Part 744

Exports, Foreign trade, Reporting and

recordkeeping requirements.

Accordingly, part 744 of the Export

Administration Regulations (15 CFR

parts 730–744) is amended, as follows:

PART 744—[AMENDED]

1. The authority citation for 15 CFR

part 744 continues to read as follows:

Authority: 50 U.S.C. app. 2401 et seq.,

1701 et seq.; 22 U.S.C. 3201 et seq.; 42 U.S.C.

2139a; E.O. 12058, 43 FR 20947, 3 CFR, 1978

Comp., p. 179; E.O. 12851, 58 FR 33181, 3

CFR, 1993 Comp., p. 608; E.O. 12924, 59 FR

43437, 3 CFR, 1994 Comp., p. 917; E.O.

12938, 59 FR 59099, 3 CFR, 1994 Comp., p.

950; Notice of August 15, 1995 (60 FR 42767,

August 17, 1995); and Notice of August 14,

1996 (61 FR 42527); and August 13, 1997 (62

FR 43629, August 15, 1997).

2. Part 744 is amended by adding a

new § 744.10 to read as follows:

§ 744.10 Restrictions on certain entities in

Russia.

(a) General prohibition. Certain

entities in Russia, under investigation

by the Russian government for

suspected export control violations

involving weapons of mass destruction

and missile technology, are included in

Supplement No. 4 of this part 744

(Entity List). (See also § 744.1(c) of the

EAR.) Exporters are hereby informed

that these entities are ineligible to

receive any items subject to he EAR

without a license.

(b) Exceptions. No License Exceptions

apply to the prohibition described in

paragraph (a) of this section.

(c) License review standards.

Applications to export or reexport items

subject to the EAR to these entities will

be reviewed with a presumption of

denial.

3. Supplement No. 4 to part 744 is

amended by adding, in alphabetical

order, the following entities:

Supplement No. 4 to part 744—Entity List

* * * * *

Baltic State Technical University, 1/21, 1-

ya Krasnoarmeiskaya UI., 198005 St.

Petersburg, Russia, for all items subject to the

EAR (see § 744.10 of the EAR)

* * * * *

Europalace 2000, Moscow, Russia, for all

items subject to the EAR (see § 744.10 of the

EAR)

Glavkosmos, 9 Krasnoproletarskaya st.,

103030 Moscow, Russia, for all items subject

to the EAR (see § 744.10 of the EAR)

Garfit (aka State Scientific Research

Institute of Graphite or NIIGRAFIT), 2 Ulitsa

Elektrodnaya, 111524 Moscow, Russia, for all

items subject to the EAR (see § 744.10 of the

EAR)

* * * * *

INOR Scientific Center, Moscow, Russia,

for all items subject to the EAR (see § 744.10

of the EAR)

* * * * *

MOSO Company, Moscow, Russia, for all

items subject to the EAR (see § 744.10 of the

EAR)

* * * * *

Polyus Scientific Production Association, 3

Ulitsa Vvedenskogo, 117342 Moscow, Russia,

for all items subject to the EAR (see § 744.10

of the EAR)

* * * * *

Dated: July 23, 1998.

R. Roger Majak,

Assistant Secretary for Export

Administration.

[FR Doc. 98–20272 Filed 7–28–98; 8:45 am]

BILLING CODE 3510–33–M

DEPARTMENT OF HEALTH AND

HUMAN SERVICES

Food and Drug Administration

21 CFR Part 862

[Docket No. 96P–0228]

Medical Devices; Reclassification and

Codification of Vitamin D Test System

AGENCY: Food and Drug Administration,

HHS.

ACTION: Final rule.

SUMMARY: The Food and Drug

Administration (FDA) is announcing

that it has issued an order in the form

of a letter to INCSTAR Corp.

reclassifying INCSTAR 25–

Hydroxyvitamin D 125I

Radioimmunoassay (RIA). This

radioimmunoassay device is intended

for use in clinical laboratories for the

quantitative determination of 25-

hydroxyvitamin D (25–OH–D) and other

hydroxylated metabolites of vitamin D

in serum or plasma to be used in the

assessment of vitamin D sufficiency.

The device and substantially equivalent

devices of this generic type were

reclassified from class III (premarket

approval) to class II (special controls).

Accordingly, the order is being codified

in the Code of Federal Regulations.

EFFECTIVE DATES: The regulation is

effective August 28, 1998. The

reclassification was effective September

24, 1996.

FOR FURTHER INFORMATION CONTACT:

Sharon K. Lappalainen, Center for

Devices and Radiological Health (HFZ–

440), Food and Drug Administration,

2098 Gaither Rd., Rockville, MD 20850,

301–594–1243.

SUPPLEMENTARY INFORMATION:

I. Background (Regulatory Authorities)

The Federal Food, Drug, and Cosmetic

Act (the act) (21 U.S.C. 301 et seq.), as

amended by the Medical Device

Amendments of 1976 (the 1976

amendments) (Pub. L. 94–295), the Safe

Medical Devices Act of 1990 (the

SMDA) (Pub. L. 101–629), and the Food

and Drug Administration Modernization

Act of 1997 (FDAMA) (Pub. L. 105–115),

established a comprehensive system for

the regulation of medical devices

intended for human use. Section 513 of

the act (21 U.S.C. 360c) established

three categories (classes) of devices,

depending on the regulatory controls

needed to provide reasonable assurance

of their safety and effectiveness. The

three categories of devices are class I

(general controls), class II (special

controls), and class III (premarket

approval).

Under section 513 of the act, devices

that were in commercial distribution

before May 28, 1976 (the date of

enactment of the 1976 amendments),

generally referred to as preamendments

devices, are classified after FDA has: (1)

Received a recommendation from a

device classification panel (an FDA

advisory committee); (2) published the

panel’s recommendation for comment,

along with a proposed regulation
Federal Register / Vol. 63, No. 145 /Wednesday, July 29, 1998 /Rules and Regulations 40365

classifying the device; and (3) published

a final regulation classifying the device.

FDA has classified most

preamendments devices under these

procedures.

Devices that were not in commercial

distribution prior to May 28, 1976,

generally referred to as postamendments

devices, are classified automatically by

statute (section 513(f) of the act into

class III without any FDA rulemaking

process. Those devices remain in class

III and require premarket approval,

unless and until: (1) The device is

reclassified into class I or II; (2) FDA

issues an order classifying the device

into class I or II in accordance with new

section 513(f)(2) of the act as amended

by FDAMA; or (3) FDA issues an order

finding the device to be substantially

equivalent, under section 513(i) of the

act, to a predicate device that does not

require premarket approval. The agency

determines whether new devices are

substantially equivalent to previously

offered devices by means of premarket

notification procedures in section 510(k)

of the act (21 U.S.C. 360(k)) and 21 CFR

part 807 of the regulations.

A preamendments device that has

been classified into class III may be

marketed, by means of premarket

notification procedures, without

submission of a premarket approval

application (PMA) until FDA issues a

final regulation under section 515(b) of

the act (21 U.S.C. 360e(b)) requiring

premarket approval.

Reclassification of postamendments

devices is governed by section 513(f)(3)

of the act, formerly section 513(f)(2) of

the act. This section provides that FDA

may initiate the reclassification of a

device classified into class III under

section 513(f)(1) of the act, or the

manufacturer or importer of a device

may petition the Secretary of the

Department of Health and Human

Services (the Secretary) for the issuance

of an order classifying the device in

class I or class II. FDA’s regulations in

§ 860.134 (21 CFR 860.134) set forth the

procedures for the filing and review of

a petition for reclassification of such

class III devices. In order to change the

classification of the device, it is

necessary that the proposed new class

have sufficient regulatory controls to

provide reasonable assurance of the

safety and effectiveness of the device for

its intended use.

FDAMA added paragraph (f)(2) in

section 513 of the act that addresses

classification of postamendments

devices. New paragraph (f)(2) in section

513 of the act provides that upon receipt

of a ‘‘not substantially equivalent’’

determination, a 510(k) applicant may

request FDA to classify a

postamendments device into class I or

class II. Within 60 days from the date of

such a written request, FDA must

classify the device by written order. If

FDA classifies the device into class I or

II, the applicant has then received

clearance to market the device and it

can be used as a predicate device for

other 510(k)’s. It is expected that this

will be used for low risk devices. This

process does not apply to devices that

have been classified by regulation into

class III—i.e., preamendments class III

devices, or class III devices for which a

PMA is appropriate.

Under section 513(f)(3)(B)(i) of the

act, formerly section 513(f)(2)(B)(i) of

the act, the Secretary may, for good

cause shown, refer a petition to a device

classification panel. If a petition is

referred to a panel, the panel shall make

a recommendation to the Secretary

respecting approval or denial of the

petition. Any such recommendation

shall contain: (1) A summary of the

reasons for the recommendation, (2) a

summary of the data upon which the

recommendation is based, and (3) an

identification of the risks to health (if

any) presented by the device with

respect to which the petition was filed.

On July 1, 1996, FDA filed the

reclassification petition submitted by

INCSTAR Corp., requesting

reclassification of the vitamin D test

system from class III to class II.

On the basis of FDA’s review of the

data submitted in the reclassification

petition, and after reviewing the panel’s

recommendations on two previous

petitions submitted in 1983 and 1985

regarding the quantitative measurement

of vitamin D, FDA issued an order to the

petitioner, reclassifying vitamin D test

system for use in clinical laboratories

for the quantitative determination of 25–

OH–D and other hydroxylated

metabolites of vitamin D in serum or

plasma to be used in the assessment of

vitamin D sufficiency, and substantially

equivalent devices of this generic type,

from class III to class II. Accordingly, as

required by § 860.134(b)(7) of the

regulations, FDA is announcing the

reclassification of the vitamin D test

system intended for use in clinical

laboratories for the quantitative

determination of 25–OH–D and other

hydroxylated metabolites of vitamin D

in serum or plasma to be used in the

assessment of vitamin D sufficiency

from class III into class II. In addition,

FDA is issuing the notice to codify the

reclassification of the device by adding

new § 862.1825.

II. Environmental Impact

The agency has determined under 21

CFR 25.34(b) that this reclassification is

of a type that does not individually or

cumulatively have a significant effect on

the human environment. Therefore,

neither an environmental assessment

nor an environmental impact statement

is required.

III. Analysis of Impacts

FDA has examined the impacts of this

final rule under Executive Order 12866

and the Regulatory Flexibility Act (Pub.

L. 96–354) (as amended by the subtitle

D of the Small Business Regulatory

Fairness Act of 1996 (Pub. L. 104–121)),

and the Unfunded Mandates Reform Act

of 1995 (Pub. L. 104–4). Executive Order

12866 directs agencies to assess all costs

and benefits of available regulatory

alternatives and, when regulation is

necessary, to select regulatory

approaches that maximize net benefits

(including potential economic,

environmental, public health and safety,

and other advantages; distributive

impacts; and equity). The agency

believes that this final rule is consistent

with the regulatory philosophy and

principles identified in the Executive

Order. In addition, the final rule is not

a significant regulatory action as defined

by the Executive Order and so is not

subject to review under the Executive

Order.

The Regulatory Flexibility Act

requires agencies to analyze regulatory

options that would minimize any

significant impact of a rule on small

entities. Reclassification of this device

from class III to class II will relieve all

manufacturers of the device of the cost

of complying with the premarket

approval requirements of section 515 of

the act. Because reclassification will

reduce regulatory costs with respect to

this device, it will impose no significant

economic impact on any small entities,

and it may permit small potential

competitors to enter the marketplace by

lowering their costs. The agency

therefore certifies that this final rule

will not have a significant economic

impact on a substantial number of small

entities. In addition, this final rule will

not impose costs of $100 million or

more on either the private sector or

state, local, and tribal governments in

the aggregate, and therefore a summary

statement or analysis under section

202(a) of the Unfunded Mandates

Refund Act of 1995 is not required.

IV. Paperwork Reduction Act of 1995

FDA has determined that this final

rule contains no collections of

information. Therefore, clearance by the

Office of Management and Budget under

the Paperwork Reduction Act of 1995 is

not required.
40366 Federal Register / Vol. 63, No. 145 /Wednesday, July 29, 1998 /Rules and Regulations

List of Subjects in 21 CFR Part 862

Medical devices.

Therefore, under the Federal Food,

Drug, and Cosmetic Act and under

authority delegated to the Commissioner

of Food and Drugs, 21 CFR part 862 is

amended as follows:

PART 862—CLINICAL CHEMISTRY

AND CLINICAL TOXICOLOGY

DEVICES

1. The authority citation for 21 CFR

part 862 continues to read as follows:

Authority: 21 U.S.C. 351, 360, 360c, 360e,

360j, 371.

2. Section 862.1825 is added to

subpart B to read as follows:

§ 862.1825 Vitamin D test system.

(a) Identification. A vitamin D test

system is a device intended for use in

clinical laboratories for the quantitative

determination of 25-hydroxyvitamin D

(25–OH–D) and other hydroxylated

metabolites of vitamin D in serum or

plasma to be used in the assessment of

vitamin D sufficiency.

(b) Classification. Class II (special

controls).

Vitamin D test systems must comply

with the following special controls: (1)

Labeling in conformance with 21 CFR

809.10 and (2) compliance with existing

standards of the National Committee on

Clinical Laboratory Standards.

Dated: July 17, 1998.

D.B. Burlington.

Director, Center for Devices and Radiological

Health.

[FR Doc. 98–20241 Filed 7–28–98; 8:45 am]

BILLING CODE 4160–01–F

DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[TD 8776]

RIN 1545–AW34

Conversion to the Euro

AGENCY: Internal Revenue Service (IRS),

Treasury.

ACTION: Final and temporary

regulations.

SUMMARY: This document contains

temporary Income Tax Regulations

relating to U.S. taxpayers operating,

investing or otherwise conducting

business in the currencies of certain

European countries that are replacing

their national currencies with a single,

multinational currency called the euro.

These regulations provide rules relating

to adjustments required for qualified

business units operating in such

currencies and rules relating to the tax

effect of holding such currencies or

financial instruments or contracts

denominated in such currencies. The

text of these temporary regulations also

serves as the text of proposed

regulations published elsewhere in this

issue of the Federal Register.

DATES: These regulations are effective

July 29, 1998.

FOR FURTHER INFORMATION CONTACT:

Howard Wiener of the Office of

Associate Chief Counsel (International),

(202) 622–3870, regarding the change in

functional currency rules and Thomas

Preston of the Office of Assistant Chief

Counsel (Financial Institutions and

Products), (202) 622–3930, regarding

section 1001 (not toll free calls).

SUPPLEMENTARY INFORMATION:

Background

On March 9, 1998, the IRS issued

Announcement 98–18 (1998–9 IRB 44)

requesting comments relating to the tax

issues for U.S. taxpayers operating,

investing or otherwise conducting

business in a currency that is converting

to the euro. Numerous comments were

received. After consideration of these

comments, these regulations are

adopted as a temporary Treasury

decision to provide immediate guidance

to taxpayers.

Explanation of Provisions

I. Background

The Treaty on European Union signed

February 7, 1992, (31 I.L.M. 247)

(entered into force November 1, 1993),

sets forth a plan to replace the national

currencies of participating members

(legacy currencies) that meet certain

economic criteria with a single

European currency (euro). Pursuant to

directives of the European Council, the

process of converting the legacy

currencies into the euro will take place

in three phases.

On January 1, 1999, the currency of

participating member states of the

European Union shall be the euro. At

that time, the euro will be substituted

for the currency of each state at a

conversion rate established pursuant to

the Treaty on European Union.

Thereafter, the bills and coins of each of

the legacy currencies will remain in

circulation but will cease to have

independent value apart from the euro.

On January 1, 2002, euro bills and coins

will be introduced into circulation.

From January 1, 1999, until June 30,

2002 (transition period), the legacy

currencies will remain in circulation as

subunits of the euro. The transition

period is referred to as the ‘‘no

prohibition, no compulsion’’ period

because during this time amounts may

generally be denominated in the legacy

currencies and/or the euro at the option

of individuals and businesses. Finally,

by July 1, 2002, the legacy currencies

will no longer be accepted as legal

tender.

On May 3, 1998, the European Union

announced the eleven countries that

would initially participate in the

conversion and the expected rates at

which the respective currencies would

convert to the euro. The eleven

countries are Austria, Belgium, Finland,

France, Germany, Ireland, Italy,

Luxembourg, Netherlands, Portugal, and

Spain. Four current members of the

European Union (Denmark, Greece,

Sweden, and the United Kingdom) will

not participate in the initial conversion

to the euro. These countries, along with

other countries that later join the

European Union, however, may convert

their currencies to the euro at some

future time.

II. Temporary Regulations

1. In General

These temporary regulations provide

guidance regarding certain of the federal

income tax consequences arising from

the introduction of the euro. Consistent

with comments received from taxpayers,

the regulations generally minimize the

tax consequences that arise by reason of

the euro conversion. In a limited

number of circumstances, however, the

Treasury and IRS determined that

considerations, such as administrative

feasibility, made a different result more

appropriate.

The regulations provide guidance

with respect to two issues: (i) the

circumstances under which the euro

conversion creates a realization event

with respect to instruments and

contracts denominated in a legacy

currency, and (ii) the circumstances

under which the euro conversion

constitutes a change in functional

currency for a qualified business unit

(QBU) whose functional currency is a

legacy currency, and certain

consequences thereof.

2. Realization

The temporary regulations provide

that the conversion of legacy currencies

to the euro does not result in a

realization event under section 1001.

This rule is broadly applicable to all

situations where the rights and

obligations of a taxpayer are altered

solely by reason of the euro conversion.

Thus, conversion to the euro of legacy