Federal Register / Vol. 61, No. 97 / Friday, May 17, 1996 / Notices 24957

1Section 551(8) of the APA defines license as

‘‘the whole or a part of an agency permit, certificate,

approval, registration, charter, membership,

statutory exemption or other form of permission.’’

(emphasis added).

2Licensing is defined as ‘‘agency process

respecting the grant, renewal, denial, revocation,

suspension, annulment, withdrawal, limitation,

amendment, modification, or conditioning of a

license.’’ 5 U.S.C. 551(9).

will not be enforceable against a

transition or democratically elected

government in Cuba under section

302(d).

(l) Claimants bringing an action under

Title III will be required to pay a

uniform filing fee, to be established by

the Judicial Conference of the United

States, pursuant to section 302(i).

(m) Section 302(a)(6) provides that no

court of the United States shall decline,

based upon the act of state doctrine, to

make a determination on the merits in

an action brought under Title III.

(n) Section 305 provides that actions

under section 302 may not be brought

more than two years after the trafficking

giving rise to the action has ceased to

occur.

4. Proof of Ownership of a Claim to

Confiscated Property

(a) Section 303(a) provides that

certification of a claim by the FCSC is

conclusive proof of ownership. In all

other cases, the court has the discretion

to appoint a special master, including

the FCSC, to make determinations of the

amount and ownership of the claim.

Determinations made by administrative

agencies or courts of a foreign

government or international

organization shall not be conclusive

unless made pursuant to binding

international arbitration to which the

United States or the claimant submitted

the claim.

(b) Section 303(b) amends the

International Claims Settlement Act of

1949 by authorizing a U.S. district court

to refer to the FCSC factual questions

under Title III involving the amount and

ownership by a U.S. national of a claim

to confiscated property in Cuba.

5. Consistency With International

Claims Practice

(a) Section 303(c) emphasizes that

nothing in the LIBERTAD Act shall be

construed to require or otherwise

authorize the claims of Cuban nationals

who became U.S. citizens after their

property was confiscated to be included

in a future negotiation and espousal of

U.S. claims with a friendly government

in Cuba when diplomatic relations are

restored. Section 303(c) also states that

the LIBERTAD Act shall not be

construed as superseding, amending, or

otherwise altering certifications that

have been made under the FCSC’s Cuba

Claims Program.

(b) Section 304 amends the

International Claims Settlement Act of

1949 to state that no person other than

a certified claimant shall have a claim

to, participate in, or otherwise have an

interest in the compensation proceeds

paid to a U.S. national by virtue of a

certified claim.

6. Presidential Suspension Authority

(a) Section 306(a) provides that,

subject to the President’s suspension

authority, Title III takes effect on August

1, 1996.

(b) Section 306(b) provides the

President with the authority to suspend

the effective date of Title III beyond

August 1, 1996, for up to six months,

and for additional extensions up to six

months, upon a determination and

report to the appropriate congressional

committees that a suspension is

necessary to the national interests of the

United States and will expedite a

transition to democracy in Cuba. An

initial determination and report must be

submitted to the appropriate

congressional committees at least 15

days before August 1, 1996. Additional

suspensions or extensions are subject to

the same reporting and determination

requirements.

(c) Section 306(c) provides the

President with the authority to suspend

the right to bring an action under Title

III after its effective date for up to six

months, and for additional extensions

up to six months, upon a determination

and report that a suspension is

necessary to the national interests of the

United States and will expedite a

transition to democracy in Cuba.

Section 306(c) also emphasizes that after

the effective date no persons may

acquire a property interest in any

potential or pending Title III action, nor

shall pending actions commenced

before the date of suspension be affected

by a suspension.

(d) Section 306(d) provides that the

President may rescind any suspension

made under section 306(b) or section

306(c) upon reporting to the appropriate

congressional committees that doing so

will expedite a transition to democracy

in Cuba.

Dated: May 11, 1996.

Janet Reno,

Attorney General.

[FR Doc. 96–12407 Filed 5–16–96; 8:45 am]

BILLING CODE 4410–01–M

Drug Enforcement Administration

Manufacturer of Controlled

Substances; Notice of Registration

By notice dated August 14, 1995, and

published in the Federal Register on

August 22, 1995 (60 FR 43613), Ganes

Chemicals, Inc., Industrial Park Road,

Pennsville, New Jersey 08070, made

application to the Drug Enforcement

Administration (DEA) to be registered as

a bulk manufacturer of

methylphenidate.

A registered manufacturer of bulk

methylphenidate filed a comment

alleging that DEA’s notice of

application, published in the Federal

Register, did not comply with notice

and comment rulemaking requirements

of the Administrative Procedure Act

(APA). In addition, the commentor

stated that Ganes’ registration would be

contrary to the public interest under 21

U.S.C. 823(a).

The commentor maintains that DEA

‘‘has deprived [the commentor] and

other registered manufacturers and

applicants of the opportunity to offer

fully-informed comments on Ganes’

application.’’ In support of its position,

the commentor submits that

‘‘registration of bulk manufacturers of

schedule I–II controlled substances is

subject to notice and comment

rulemaking.’’ For the reasons provided

below, this conclusion is an incorrect

interpretation of the APA. First, the

commentor ignores the basic definitions

set forth in the APA and, in so doing,

confuses notice and comment

rulemaking with agency licensing

proceedings. The commentor argues that

DEA proceedings to grant or deny an

application for registration as a bulk

manufacturer are rulemakings.

However, the clear language of the

definition of a ‘‘rule’’ exposes the error

of this analysis. The APA defines ‘‘rule

making’’ to mean an ‘‘agency process for

formulating, amending, or repealing a

rule.’’ 5 U.S.C. 551(5).

The APA defines a ‘‘rule’’ as:

The whole or a part of an agency statement

of general or particular applicability and

future effect designed to implement,

interpret, or prescribe law or policy or

describing the organization, procedure, or

practice requirements of an agency and

includes the approval or prescription for the

future of rates, wages, corporate or financial

structures or reorganizations thereof, prices,

facilities, appliances, services or allowances

therefore or of valuations, costs, or

accounting, or practices bearing on any of the

foregoing.

5 U.S.C. 551(4).

Review of the APA’s definitions of

license 1 and licensing 2 reveals that the

granting or denial of a manufacturer’s

application for registration is a licensing

action, not a rulemaking. Courts have
24958 Federal Register / Vol. 61, No. 97 / Friday, May 17, 1996 / Notices

frequently distinguished between

agency licensing actions and rulemaking

proceedings. See, e.g., Gateway

Transportation Co. v. United States, 173

F. Supp. 822, 828 (D.C. Wis. 1959);

Underwater Exotics, Ltd. v. Secretary of

the Interior, 1994 U.S. Dist. LEXIS 2262

(1994). Since courts have interpreted

agency action relating to licensing as not

falling within the APA’s rulemaking

provisions, it is probably not an

oversight that the commentor has not

cited any cases in which an agency

action on a license was required to

comport with § 553 of the APA.

In Underwater Exotics, the United

States District Court for the District of

Columbia drew the distinction between

an agency placing conditions on a

license and agency creation of a rule. In

that case, the Fish and Wildlife Service

(Service) imposed certain conditions on

the plaintiff’s import/export license; the

plaintiff sued, arguing, inter alia, that

the Service failed to comply with the

APA’s rulemaking requirements.

The court looked to the APA’s

definitions of ‘‘licensing’’ and ‘‘rule’’

and concluded that ‘‘the Service’s

imposition of these conditions on a

license did not violate the APA, because

the Service’s actions did not involve the

creation of a rule.’’ 1994 U.S. Dist.

LEXIS 2262, *26. The court explained

that:

The Service’s imposition of conditions on

the plaintiff’s import/export license clearly

fall within the definitions of ‘‘license’’ and

‘‘licensing,’’ * * * this agency action is not

a ‘‘rule making.’’ Absent specific statutory

direction otherwise, a court should not force

an agency to employ a certain procedural

format * * *.

Id.

Since the registration of bulk

manufacturers is not a ‘‘rule,’’ DEA is

not required to follow traditional notice

and comment rulemaking procedures

when granting or denying applications

for such registration. In fact, the D.C.

Circuit, in a case cited by the

commentor, clearly supported this

analysis in a decision in which the court

stated that ‘‘agency action that clearly

falls outside the definition of ‘rule’ is

also freed from rulemaking procedures.’’

Batterton v. Marshall, 648 F. 2d 694,

701 n. 25 (D.C. Cir. 1980).

In a final rule which amended 21 CFR

§ 1301.43(a), effective July 20, 1995,

DEA eliminated the right of current bulk

manufacturers or applicants to request a

hearing on an application to bulk

manufacture a Schedule I or II

controlled substance. In the regulation

as amended, however, DEA continued

to invite comments and objections from

such manufacturers or applicants on a

pending application. (60 FR 32099 (June

20, 1995)). The commentor claims that

DEA voluntarily adopted the APA’s

notice and comment procedures when it

changed the third party hearing

regulation in the final rule of June 20,

1995. This contention, however, is not

supported by either the notice of

proposed rulemaking (59 FR 3055) or

the final rule. In fact, while the final

rule does invite written comments from

current manufacturers and applicants,

nowhere in this rule does DEA state,

implicitly or explicitly, that it intended

to follow notice and comment

rulemaking procedures when acting

upon a bulk manufacturer’s application.

DEA simply stated in the final rule that

it would take into account such written

comments when deciding whether to

grant a particular registration or whether

to issue an Order to Show Cause

proposing to deny an application.

The commentor contends that

‘‘[w]ithout access to * * * Ganes’

application, any reports of DEA

inspections of Ganes, or DEA’s

assessment of how it might apply the

statutory public interest test, it is

impossible for [the commentor] and

other registered manufacturers to offer

fully-informed comments on Ganes’

fitness for registration.’’ Nowhere in the

final rule was it contemplated that DEA

would turn over information in its files

in order for others to determine whether

to object or not. DEA is well aware of

what it has in its own files and will

supplement that information with any

comments filed in rendering a decision

whether or not to grant an application.

In determining whether an applicant

meets the public interest standard, DEA

is perfectly capable of analyzing its own

investigative reports. Therefore, it is not

necessary for DEA to turn over

information it has gathered on a

particular applicant to another

registered manufacturer.

Moreover, under 21 U.S.C. 824(a),

only the Attorney General has the

discretion to decide whether or not to

file an Order to Show Cause. The rule

amending 21 CFR 1301.43 did not and,

indeed, could not, authorize a third

party to exercise such discretion in light

of the clear statutory mandate to place

such decisions exclusively with the

Attorney General.

If DEA determines, based upon its

own investigation and upon information

provided to it through written

comments, that the registration of an

applicant would not be in the public

interest, an Order to Show Cause will be

issued. If the applicant requests a

hearing, the ensuing adjudicatory

proceedings will comply with the APA.

DEA’s decision to address applications

via individual adjudication, and not by

notice and comment rulemaking, is

within its discretion and in conformity

with both the APA and the Controlled

Substances Act (CSA). Courts have held

that agencies have this discretion to

determine whether to proceed by

rulemaking or individual adjudication.

See PBW Stock Exchange v. Securities

and Exchange Commission, 485 F. 2d

718, 731 (3d Cir. 1973), cert. denied 94

S. Ct. 1992.

Finally, the commentor’s citation to

Rodway v. USDA, 514 F. 2d 809 (D.C.

Cir. 1975) and Heron v. Heckler, 576 F.

Supp. 218 (N.D. Cal. 1983) is

inappropriate. In those cases, as the

commentor itself acknowledges, the

agencies in question had either

promulgated a regulation or adopted a

policy statement specifically espousing

the APA’s notice and comment

requirements. DEA has done neither.

The commentor also submitted that

the sixty day comment period was

inadequate because that commentor

needed more time to obtain and assess

documents from DEA and the U.S.

Department of Health and Human

Services, Food and Drug

Administration. The regulation, as

amended June 20, 1995, contemplated

that DEA would receive information

from qualified third parties that is

already available and known to such

parties. As explained above, the intent

of the regulation never was to have

other bulk manufacturers or applicants

become an independent investigative

branch. Under these circumstances, the

sixty-day comment period is adequate.

DEA’s action upon a bulk

manufacturer’s application is not a

rulemaking action. DEA is therefore not

required to follow notice and comment

rulemaking when considering these

applications. Neither the APA nor the

CSA requires DEA to follow notice and

comment rulemaking when acting upon

bulk manufacturer applications. While

DEA invites comments from other bulk

manufacturers and applicants, such

invitation does not translate into an

implicit adoption of notice and

comment rulemaking. Consequently, the

sixty day comment in which to file

comments is reasonable and adequate.

On February 14, 1996, the Commentor

filed a belated, additional comment.

This comment maintained that the

dictum set forth in MD Pharmaceutical,

Inc. v. Drug Enforcement

Administration, No. 95–1267 (D.C. Cir.

January 2, 1996) required DEA to set

forth the reasons why DEA intends to

register Ganes under certain factors set

forth in 21 U.S.C. 823(a). Whether or not

the Commentor’s interpretation is

correct or not, DEA will adequately

address the commentor’s objections and
Federal Register / Vol. 61, No. 97 / Friday, May 17, 1996 / Notices 24959

set forth the reasons why DEA believes

Ganes’ application should be granted

under the factors pursuant to 21 U.S.C.

823(a) as set forth below.

In stating that Ganes Chemicals, Inc.’s

application to manufacture

methylphenidate would be contrary to

the public interest under 21 U.S.C.

823(a), the commentor argues that Ganes

would lack effective controls against

diversion of methylphenidate; that

Ganes’ past experience in the

manufacture of controlled substances

and experience in the establishment of

effective control against diversion were

questionable; that there is currently an

adequate and uninterrupted supply of

methylphenidate under adequately

competitive conditions; and that there

were other relevant factors to indicate

that Ganes’ registration would be

contrary to the public health and safety.

In support of the contentions that

Ganes lacks effective controls to prevent

diversion and that Ganes’ past

experience in this regard was

questionable, the commentor states that

as a result of an Order to Show Cause

issued by DEA and a Civil Complaint

filed in the United States District Court

for the District of New Jersey charging

Ganes with various security and recordkeeping violations and with

manufacturing controlled substances in

excess of quotas, Ganes entered into a

Consent Agreement in December 1980,

agreeing to withdraw its application to

bulk manufacture methaqualone and not

reapply until 1984 and pay a $25,000

fine.

Ganes’ application is based on the

firm’s request to add methylphenidate

to its existing registration as a bulk

manufacturer. Ganes has been and is

currently registered with DEA as a bulk

manufacturer of other Schedule II

controlled substances. Both the Order to

Show Cause and the civil complaint

occurred over fifteen years ago. The firm

has been investigated by DEA on a

regular basis since that time to

determine if the firm maintains effective

controls against diversion and if its

continued registration is consistent with

the public interest. These investigations

have included, in part, inspection and

testing of the firm’s physical security,

audits of the firm’s records, verification

of compliance with state and local law

and a review of the firm’s background

and history. The investigations have

found Ganes to be in compliance with

the CSA and its implementing

regulations.

The commentor argues that there is an

adequate and uninterrupted supply of

methylphenidate under adequately

competitive conditions. In support of

this argument, the commentor asserts

that the present bulk manufacturers are

adequate for this purpose, that quota

restrictions have been eased sufficiently

since 1988, and that the commentor

sells methylphenidate in dosage form to

itself and other distributors.

Under Title 21, CFR 1301.43(b), DEA

is not required to limit the number of

manufacturers solely because a smaller

number is capable of producing an

adequate supply, provided effective

controls against diversion are

maintained. DEA has determined that

effective controls against diversion will

be maintained by Ganes.

The commentor, in support of its

argument that Ganes’ registration would

be contrary to the public health and

safety, cites Ganes’ manufacture of the

List I chemicals, ephedrine and

pseudoephedrine. The commentor states

that DEA has reported that ephedrine

and pseudoephedrine are used in the

clandestine manufacture of

methamphetamine and methcathinone

and that companies such as Ganes may

be the source of these chemicals.

With respect to Ganes’ manufacture of

ephedrine and pseudoephedrine, there

is no evidence of any violations of the

Chemical Diversion and Trafficking Act

(CDTA) and the Domestic Chemical

Diversion Control Act (DCDCA).

Another factor which the commentor

claims is relevant is that the Food and

Drug Administration (FDA) has made

various inspections of Ganes’ two

production centers between 1980 and

1994, and noted various problems with

record keeping, manufacturing practices

and product-complaint procedures. The

commentor states that some of these

findings pertain to controlled

substances.

The FDA violations are based on the

practices of another federal agency

within another department of

government operating under the

authority of distinctly different statutes.

Moreover, DEA has verified with FDA

that Ganes’ drug registration under the

Federal Food, Drug and Cosmetic Act is

current, that the nature of the indicated

(or noted) FDA citations against Ganes

and the FDA actions to ensure

compliance do not warrant a finding

that Ganes’ compliance with Federal

laws is so lacking or inadequate as to

warrant denial under the CSA.

It is within DEA’s sole discretion to

decide whether or not to file an Order

to Show Cause after reviewing all of the

evidence, including the comments and

objections provided to DEA under 21

CFR 1301.43(a). After reviewing all the

evidence, including the comment filed,

DEA has determined, pursuant to 21

U.S.C. 823(a), that it is consistent with

the public interest to grant Ganes’

application to manufacture

methylphenidate at this time. Therefore,

pursuant to 21 U.S.C. 823 and 28 CFR

0.100 and 0.104, the Deputy Assistant

Administrator, Office of Diversion

Control, hereby orders that the

application submitted by the above firm

for registration as a bulk manufacturer

of the basic classes of controlled

substances listed above is granted.

Dated: May 13, 1996.

Gene R. Haislip,

Deputy Assistant Administrator Office of

Diversion Control Drug Enforcement

Administration.

[FR Doc. 96–12429 Filed 5–16–96; 8:45 am]

BILLING CODE 4410–09–M

DEPARTMENT OF LABOR

Employment and Training

Administration

Notice of Determinations Regarding

Eligibility To Apply for Worker

Adjustment Assistance and NAFTA

Transitional Adjustment Assistance

In accordance with Section 223 of the

Trade Act of 1974, as amended, the

Department of Labor herein presents

summaries of determinations regarding

eligibility to apply for trade adjustment

assistance for workers (TA–W) issued

during the period of May, 1996.

In order for an affirmative

determination to be made and a

certification of eligibility to apply for

worker adjustment assistance to be

issued, each of the group eligibility

requirements of Section 222 of the Act

must be met.

(1) That a significant number or

proportion of the workers in the

workers’ firm, or an appropriate

subdivision thereof, have become totally

or partially separated,

(2) That sales or production, or both,

of the firm or subdivision have

decreased absolutely, and

(3) That increases of imports of

articles like or directly competitive with

articles produced by the firm or

appropriate subdivision have

contributed importantly to the

separations, or threat thereof, and to the

absolute decline in sales or production.

Negative Determinations for Worker

Adjustment Assistance

In each of the following cases the

investigation revealed that criterion (3)

has not been met. A survey of customers

indicated that increased imports did not

contribute importantly to worker

separations at the firm.

TA–W–32,177; EMI Co., Erie, PA