Source: https://www.deadiversion.usdoj.gov/fed_regs/rules/2000/fr0719.htm
Timestamp: 2018-02-19 06:05:50
Document Index: 376612112

Matched Legal Cases: ['arts 1300', '§ 1300', 'art 1301', 'art 1301', '§ 1301', 'ART 1307', '§ 1307']

2000 - Establishment of Freight Forwarding Facilities for DEA Distributing Registrants
RESOURCES > Federal Register Notices > Rules - 2000 > Establishment of Freight Forwarding Facilities for DEA Distributing Registrants
[Page 44674-44679]
[DOCID:fr19jy00-10]
[DEA-143F]
RIN 1117-AA36
SUMMARY: This rule defines the term freight forwarding facility and establishes storage, security, and recordkeeping requirements for controlled substances that transit such facilities. It also provides a waiver to a freight forwarding facility from the requirement for registration with the Drug Enforcement Administration. This rule will afford a registrant who is authorized to engage in the general distribution of controlled substances a more efficient and competitive means to distribute controlled substances and should minimize in-transit losses.
DEA acknowledges the comments that limiting the definition to such as extent, while simplifying the issue of responsibility under the law and regulations, could result in complex, inefficient, and duplicative efforts for a company that operates multiple distributing registrations. The company would be required to maintain and operate a separate freight forwarding facility for each registered distributing location. Therefore, the proposal is
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being amended to allow a corporate entity that maintains multiple distributing registrations the ability to operate a single freight forwarding facility for shipments in transit from any of its registered distributing locations. Such a provision remains consistent with the existing framework of DEA's requirements because the controlled substances remain in the custody and control of the corporate entity who maintains both the freight forwarding facility and the various registrations with DEA. That corporate entity is responsible for ensuring that the laws and regulations are adhered to and for the safekeeping of the controlled substances transiting the facility. The ultimate responsibility for compliance would, of course, rest with the DEA registered location making the shipment, should there be any violations or thefts or losses of controlled substances from the shipment.
One of the factors in DEA's decision to establish the waiver of the registration requirement for freight forwarding facilities was that in the normal course of freight forwarding activities, shipments of controlled substances will transit a facility with minimal delay. As one commenter noted, "* * * Product arrives at the facility via the long distance conveyance and is transferred to the appropriate short distance conveyance, typically within a matter of 2 hours or less * * *" However, recognizing that there are a variety of factors, such as bad weather, mechanical breakdowns, scheduling errors, etc., that may interfere with the timely transit of shipments through the facility, DEA included in the definition of a freight forwarding facility the provision that controlled substances may be stored for less than 24 hours. DEA expects that any registrant operating a freight forwarding facility will ensure that any controlled substances transiting the facility will remain there for less than 24 hours.
DEA is not going to attempt to define in these regulations what would constitute an emergency. Any attempt to do so would inevitably fall short of its intended purpose. There are simply too many variables that could influence whether an event would, or would not, qualify as an emergency. Each event will have to be looked at individually, not only in terms of what has occurred, but also in terms of what efforts the registrant had taken prior to the event to anticipate and prevent any disruption of operations and what efforts are taken following the event to safeguard the controlled substances and return to normal operations. Registrants should approach this issue from the perspective of taking all possible steps to anticipate unusual events and ensure that these events do not prevent compliance with the regulations.
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As an alternative to continuous observation of controlled substances, two commenters suggested a "lock down" of the facility. DEA believes that a distributing registrant who has the ability to "lock down" a freight forwarding facility equipped with the appropriate alarm system or kept under constant visual surveillance by security patrols would, in effect, secure the controlled substances in a manner equivalent to the security requirements stated in 21 CFR 1301.72(b)(3), thus satisfying the requirement in the new 21 CFR 1301.77(a)(2).
The NPRM prohibited the use of a freight forwarding facility for handling the transit of controlled substance returns due to concerns that the custody and control of the controlled substance returns would be transferred from the registered customer at a non-registered location. DEA is amending its proposal to allow controlled substance returns within a single corporate structure to be routed through the corporate owned or operated freight forwarding facility only when the distributing registrant provides the same transfer, storage, security, and recordkeeping controls as outlined in this regulation for controlled substance distributions through a freight forwarding facility. In other words, a distributing registrant may pick up a pre-authorized customer return in the same manner it makes deliveries. DEA is amending Section 1307.12 of the regulations to acknowledge the fact that a person may return controlled substances to a supplier either directly or through a freight forwarding facility provided that the return is pre-arranged and the returning registrant delivers the controlled substance(s) directly to an agent on employee of the receiving registrant. DEA is also making a technical correction in this section to the U.S. Code citation which should read "21 U.S.C. 822(c)" rather than "21 U.S.C. 823(c)".
In order to accept transfer of controlled substance returns, a distributing registrant must have received advance notification from the customer of its intent to return controlled substances. Controlled substance returns can only be transferred from a customer to an authorized representative of a distributing registrant in sealed, packaged, unmarked containers. The transfer of controlled substance returns from the customer to the authorized representative must be properly documented by both parties to the transaction so that there is an ability to track the flow of the returns from the customer back through the freight forwarding facility to the distributing registrant. Controlled substance returns cannot be shipped by a customer
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directly to a freight forwarding facility nor can controlled substance returns be distributed from the freight forwarding facility to any other registrant except the original seller since the freight forwarding facility is a non-registered entity. Further, returns must transit the freight forwarding facility in less than 24 hours.
Controlled substances that are being transferred through a freight forwarding facility may be stored in the facility for less than 24 hours. During storage, containers with controlled substances must be kept under continuous observation by designated individuals or maintained in a secured area that meets the present requirements for storage of Schedule III through V controlled substances. 'Locking down' a facility that also has a monitored alarm system or is subject to continuous monitoring by security personnel is consistent with the security requirements under 21 CFR 1301.72(b)(3) and 1301.77(a)(2).
The Deputy Assistant Administrator, Office of Diversion Control has reviewed this rule in accordance with the Regulatory Flexibility Act (5 U.S.C. 605(b)) and certifies that it will not have a significant economic impact on a substantial number of small entities. This final rule provides an alternative system that may allow certain person(s) authorized to distribute controlled substances a more efficient means of delivering controlled substances. In fact, the regulated industry has represented that this procedure will benefit the industry by allowing it to lower costs associated with shipping controlled substances.
This final rule has been drafted and reviewed in accordance with Executive Order 12866, Sec. 1(b), Principles of Regulation. The Deputy Assistant Administrator, Office of Diversion Control, has determined that this rule is not a significant regulatory action under Executive Order 12866, Sec. 3(f), Regulatory Planning and Review, and accordingly this rule has not been reviewed by the Office of Management and Budget. This regulation provides an exemption for freight forwarding facilities operated by a person from certain requirements of the CSA, thus allowing them a more efficient and cost effective means of doing business.
For reasons set out above, DEA is amending 21 CFR Parts 1300, 1301, 1304 and 1307 to read as follows:
§ 1300.01 Definitions.
(42) The term freight forwarding facility means a separate facility operated by a distributing registrant through which sealed, packaged controlled substances in unmarked shipping containers (i.e., the containers do not indicate that the contents include controlled substances) are, in the course of delivery to, or return from, customers, transferred in less than 24 hours. A distributing registrant who operates a freight forwarding facility may use the facility to transfer controlled substances from any location the distributing registrant operates that is registered with the Administration to manufacture, distribute, or import controlled substances, or, with respect to returns, registered to dispense controlled substances, provided that the notice required by Sec. 1301.12(b)(4) of Part 1301 of this chapter has been submitted and approved. For purposes of this definition, a distributing registrant is a person who is registered with the Administration as a manufacturer, distributor, and/or importer.
(4) A freight forwarding facility, as defined in Sec. 1300.01 of this part, provided that the distributing registrant operating the facility has submitted written notice of intent to operate the facility by registered mail, return receipt requested (or other suitable means of documented delivery) and such notice has been approved. The notice shall be submitted to the Special Agent in Charge of the Administration's offices in both the area in which the facility is located and each area in which the distributing registrant maintains a registered location that will transfer controlled substances through the facility. The notice shall detail the registered locations that will utilize the facility, the location of the facility, the hours of operation, the individual(s) responsible for the controlled substances, the security and recordkeeping procedures that will be employed, and whether controlled substances returns will be processed through the facility. The notice must also detail what state licensing requirements apply to the facility and the registrant's actions to comply with any such requirements. The Special Agent in Charge of the DEA Office in the area where the freight forwarding facility will be operated will provide written notice of approval or disapproval to the person with thirty days after confirmed receipt of the notice. Registrants that are currently operating freight forwarding facilities under a memorandum of understanding with the Administration must provide notice as required by this section no later than September 18, 2000 and receive written approval from the Special Agent in Charge of the DEA Office in the area in which the freight forwarding facility is operated in order to continue operation of the facility.
3. Part 1301 is amended by adding a new § 1301.77 to read as follows:
(2) stored in a secured area that meets the requirements of Section 1301.72(b) of this Part. For purposes of this requirement, a facility that may be locked down (i.e., secured against physical entry in a manner consistent
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with requirements of Section 1301.72(b)(3)(ii) of this part) and has a monitored alarm system or is subject to continuous monitoring by security personnel will be deemed to meet the requirements of Section 1301.72(b)(3) of this Part.
PART 1307--[AMENDED]
§ 1307.12 Distribution to supplier.