[Federal Register Volume 61, Number 62 (Friday, March 29, 1996)]
[Rules and Regulations]
[Pages 14022-14024]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-7739]
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DEPARTMENT OF JUSTICE
Drug Enforcement Administration
21 CFR Part 1310
[DEA-135F]
RIN 1117-AA30
Manufacturer Reporting
AGENCY: Drug Enforcement Administration (DEA), Justice.
ACTION: Final Rule.
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SUMMARY: This rule is issued by the Deputy Administrator of the Drug
Enforcement Administration (DEA) to implement provisions of the
Domestic Chemical Diversion Control Act of 1993 (Pub. 103-200) (DCDCA)
to specify certain reporting requirements for manufacturers of listed
chemicals. This rule requires bulk manufacturers of listed chemicals to
provide annual reports containing certain production data to the DEA.
EFFECTIVE DATE: April 29, 1996. The first annual reports which detail
data for calendar year 1995, shall be submitted on or before June 27,
1996.
FOR FURTHER INFORMATION CONTACT: Howard McClain Jr., Chief, Drug and
Chemical Evaluation Section, Office of Diversion Control, Drug
Enforcement Administration, Washington, D.C. 20537 Telephone (202) 307-
7183.
SUPPLEMENTARY INFORMATION: The Domestic Chemical Diversion Control Act
1993 (Pub. 103-200) (DCDCA) amended 21 U.S.C. 830(b) to require that
regulated persons who manufacture listed chemicals (other than a drug
product that is exempted under 21 U.S.C. 802(39)(A)(iv)) report
annually to DEA information detailing the specific quantities
manufactured. This rule specifies certain reporting requirements for
manufacturers of listed chemicals and finalizes a proposed rule
published in the Federal Register on September 26, 1995 (60 FR 49529).
Interested parties were given 60 days to submit written comments
regarding the proposed rule.
Comments
Five organizations submitted comments in response to the proposed
regulations. One comment suggested that Section 1310.03(b) be modified
in order to clarify that the reporting requirements pertain to both
List I and List II chemicals. Therefore Section 1310.01(b) has been
amended to clarify that ``Each regulated person who manufactures a List
I or List II chemical shall file reports regarding such manufacture as
specified in Section 1310.05.''
Another comment stated that DEA had not clearly established its
basis for needing information requested under the reporting
requirement. This requirement, which was established by the Domestic
Chemical Diversion Control Act of 1993, will provide the DEA with
information on the amounts of listed chemicals available in the U.S.
and provide specific strategic information and parameters on the size
and direction of the legitimate listed chemical market and the
availability of such chemicals for diversion. It will also enable the
DEA to provide the International Narcotics Control Board (INCB) with
aggregate data regarding the production and availability of chemicals
controlled under provisions of the 1988 United Nations Convention
Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances.
Two comments requested that hydrochloric acid be exempted and one
comment suggested that sulfuric acid be exempted since only exports of
these chemicals to certain countries are currently regulated. However,
both these chemicals are controlled in Table II of the 1988 United
Nations Convention Against Illicit Traffic in Narcotic Drugs and
Psychotropic Substances. This reporting provision will enable the DEA
to provide the INCB with aggregate manufacturing data on hydrochloric
and sulfuric acid.
The DEA recognizes that bulk manufacturers must file other similar
reports to other government agencies. For example, one of the comments
stated that the requested information is provided to the U.S.
Environmental Protection Agency (EPA) four times per year. Therefore,
as stated in the Notice of Proposed Rulemaking, if an existing standard
industry report contains the information required in Section 1310.06(h)
and such information is separate or readily retrievable from the
report, that report may be submitted in satisfaction of this
requirement. Each report shall be submitted to the DEA under company
letterhead and signed by an appropriate, responsible official.
One comment stated that even though the DEA has specified that an
existing standard industry report may satisfy the reporting
requirements, the reporting obligation would end up as a special report
for each listed material at each location and therefore would be
extremely burdensome. In addition, two comments dealt with the issue of
whether data must be reported by individual facility, as opposed to
submitting one corporate report which includes data for all facilities.
In response to these concerns, the DEA has determined that either
reporting method is acceptable. Therefore, each business entity which
manufactures a listed chemical may elect to (1) report separately by
individual location or (2) report as an aggregate amount for the entire
business entity. These manufacturers, however, must inform the DEA of
which method they will use.
One commentor asked whether inventories should be reported for
listed chemicals stored in foreign locations. The DEA has determined
that such foreign inventories are not subject to the inventory
reporting requirements since such material would have already been
reported to the DEA under existing export notification requirements if
it were manufactured in the U.S. and shipped to a foreign location.
One commentor requested clarification of the term year-end
inventory as used in Section 1310.06(h)(3). For purposes of this annual
reporting requirement, inventory shall reflect the quantity of listed
chemicals, whether in bulk or non-exempt product form, held in storage
for later distribution. Inventory does not include waste material for
destruction, material stored as an in-process intermediate or other in-
process material. The DEA recognizes that bulk manufacturers may have
specific situations which will affect the complexity of inventory
reporting. Therefore, the Drug and Chemical Evaluation Section, Office
of Diversion Control, Drug Enforcement Administration is available to
provide guidance in response to questions bulk manufacturers may have
regarding what material should be included as inventory.
One commentor requested clarification of the terms ``product'' and
``converted'' as used in Section 1310.06(h)(5). The term product refers
to all pharmaceutical preparations and chemical mixtures exempted under
Sections 1310.01(f)(1)(iv) or 1310.01(f)(1)(v) intended for later
distribution. In order to provide clarification of Section
1310.06(h)(5), the term ``converted'' is being removed. This section
will now specify that each annual report required by Section 1310.05(d)
shall provide ``[t]he aggregate quantity of each listed chemical
manufactured which becomes a component of a product exempted
[[Page 14023]]
under Section 1310.01(f)(1)(iv) or 1310.01(f)(1)(v) during the
preceding calendar year.''
One commentor requested clarification that the reporting
requirements do not apply to formulators of chemical mixtures. In
response to this comment, a bulk manufacturer is defined under the
proposed rule, as a person who produces a listed chemical by means of
chemical synthesis or by extraction from other substances. Unless a
formulator of chemical mixtures produces a listed chemical by means of
chemical synthesis or by extraction from other substances, that
formulator is not considered a bulk manufacturer and therefore is not
subject to these reporting requirements.
One firm noted that the proposed rule stated that quantities be
reported to the nearest kilogram. The comment further stated that this
was not feasible due to the large volumes of some of the listed
chemicals. In response to this inquiry, be advised that the reference
to reporting ``to the nearest kilogram'' was intended to mean that
quantities should be reported in kilogram units of measure and was not
intended to specify the precision with which data should be supplied.
The DEA is therefore modifying the regulatory language to read that
information should be reported ``in kilogram units of measure''.
One firm commented that an exemption should be provided for bulk
manufacturers that produce listed chemicals solely for internal
consumption. The DEA has determined that bulk manufacturers that
produce a listed chemical solely for internal consumption shall not be
required to report for that listed chemical. For purposes of these
reporting requirements, internal consumption shall consist of any
quantity of a listed chemical otherwise not available for further
resale or distribution. Internal consumption shall include (but not be
limited to) quantities used for quality control testing, quantities
consumed in-house or production losses. Internal consumption does not
include the quantities of a listed chemical consumed in the production
of exempted products. (These quantities used in the production of
exempted products shall be reported separately.) Section 1310.05 has
been modified to reflect this reporting exemption.
One firm commented that the proposed rule establishes a DEA code
number for each listed chemical and made a suggestion regarding the use
of an alternate numbering system. However, the proposed rule only
clarifies and implements manufacturer reporting requirements and does
not deal with the issue of DEA code numbers. This issue was previously
addressed under the regulations which implemented the Chemical
Diversion and Trafficking Act (60 FR 32447). In that notice, DEA
responded that it had considered the use of other numbering systems
such as the Chemical Abstract Services (CAS) and Harmonized Tariff
System (HTS). However, in reviewing these systems DEA determined that
they were designed for other purposes and that their use could lead to
confusion and jeopardize the accuracy of information reported to DEA.
In the HTS numbering system there are multiple chemicals that are
assigned the same number and in the CAS numbering system there are
chemicals that are assigned multiple codes. The DEA has produced and
made available a chemical reference guide that provides a cross
reference to the CAS and HTS numbers.
Conclusion
These reporting requirements will apply only to bulk manufacturers
of listed chemicals. The term bulk manufacturer as used in this
regulation means a person who manufactures a listed chemical by means
of chemical synthesis or by extraction from other substances. It does
not include persons whose sole activity consists of repackaging or
relabeling listed chemical products or the manufacture of drug dosage
form products which contain a listed chemical. For each listed
chemical, each manufacturer is required to report annually to DEA (1)
the year-end inventory, (2) the aggregate quantity manufactured, (3)
the aggregate quantity used for internal consumption and (4) the
aggregate quantity of each listed chemical manufactured which becomes a
component of a product exempted under Section 1310.01(f)(1)(iv) or
1310.01(f)(1)(v) during the preceding calendar year. While
manufacturers are required to report the quantities of listed chemicals
used in the production of exempted products (e.g. exempted drug
products and chemical mixtures), the manufacturer is not required to
report data regarding the aggregate quantity of the exempted products
produced.
Data provided under these reporting requirements shall be submitted
annually to the Drug and Chemical Evaluation Section, Drug Enforcement
Administration, Washington D.C. 20537, on or before the 15th day of
March of the year immediately following the calendar year for which
submitted. However, in order to provide sufficient time for preparation
of the initial annual reports which detail manufacturing data for
calendar year 1995, these initial reports shall not be due until June
27, 1996.
The Attorney General has delegated authority under the CSA and all
subsequent amendments to the CSA to the Administrator of the DEA (28
CFR 0.100). The Administrator, in turn, has redelegated this authority
to the Deputy Administrator pursuant to 28 CFR 0.104. The Deputy
Administrator hereby certifies that this rulemaking will have no
significant impact upon entities whose interests must be considered
under the Regulatory Flexibility Act, 5 U.S.C. 601 et seq. The DEA
estimates that only approximately 210 manufacturers of listed chemicals
will be impacted by these reporting requirements. The impact is minimal
since the requested information is frequently maintained in the normal
course of business operation. In an effort to further minimize the
impact of these reporting requirements and avoid duplicate reporting,
the DEA will accept existing reports which contain the required data,
provided the data is separate or readily retrievable from other data in
the report.
This final rule is not a significant regulatory action and
therefore has not been reviewed by the Office of Management and Budget
pursuant to Executive Order 12866.
This action has been analyzed in accordance with the principles and
criteria in E.O. 12612, and it has been determined that the rule does
not have sufficient federalism implications to warrant the preparation
of a Federalism Assessment.
List of Subjects in 21 CFR Part 1310
Drug traffic control, Reporting and recordkeeping requirements,
List I and List II Chemicals.
For reasons as set out above, 21 CFR Part 1310 is amended as
follows:
PART 1310--[AMENDED]
1. The authority citation for Part 1310 continues to read as
follows:
Authority: 21 U.S.C. 801, 830, 871(b).
2. Section 1310.03 is amended by redesignating the existing text as
paragraph (a) and adding a new paragraph (b) to read as follows:
Sec. 1310.03 Persons required to keep records and file reports.
(a) * * *
(b) Each regulated person who manufactures a List I or List II
chemical shall file reports regarding such
[[Page 14024]]
manufacture as specified in Section 1310.05.
3. Section 1310.05 is amended by adding a new paragraph (d) to read
as follows:
Sec. 1310.05 Reports.
* * * * *
(d) Each regulated bulk manufacturer of a listed chemical shall
submit manufacturing, inventory and use data on an annual basis as set
forth in Sec. 1310.06(h). This data shall be submitted annually to the
Drug and Chemical Evaluation Section, Drug Enforcement Administration
(DEA), Washington, D.C. 20537, on or before the 15th day of March of
the year immediately following the calendar year for which submitted. A
business entity which manufactures a listed chemical may elect to
report separately by individual location or report as an aggregate
amount for the entire business entity provided that they inform the DEA
of which method they will use. This reporting requirement does not
apply to drug or other products which are exempted under
Secs. 1310.01(f)(1)(iv) or 1310.01(f)(1)(v) except as set forth in
Sec. 1310.06(h)(5). Bulk manufacturers that produce a listed chemical
solely for internal consumption shall not be required to report for
that listed chemical. For purposes of these reporting requirements,
internal consumption shall consist of any quantity of a listed chemical
otherwise not available for further resale or distribution. Internal
consumption shall include (but not be limited to) quantities used for
quality control testing, quantities consumed in-house or production
losses. Internal consumption does not include the quantities of a
listed chemical consumed in the production of exempted products. If an
existing standard industry report contains the information required in
Sec. 1310.06(h) and such information is separate or readily retrievable
from the report, that report may be submitted in satisfaction of this
requirement. Each report shall be submitted to the DEA under company
letterhead and signed by an appropriate, responsible official. For
purposes of this paragraph only, the term regulated bulk manufacturer
of a listed chemical means a person who manufactures a listed chemical
by means of chemical synthesis or by extraction from other substances.
The term bulk manufacturer does not include persons whose sole activity
consists of the repackaging or relabeling of listed chemical products
or the manufacture of drug dosage from products which contain a listed
chemical.
4. Section 1310.06 is amended by adding a new paragraph (h) to read
as follows:
Sec. 1310.06 Content of records and reports.
* * * * *
(h) Each annual report required by Section 1310.05(d) shall provide
the following information for each listed chemical manufactured:
(1) The name, address and chemical registration number (if any) of
the manufacturer and person to contact for information.
(2) The aggregate quantity of each listed chemical that the company
manufactured during the preceding calendar year.
(3) The year-end inventory of each listed chemical as of the close
of business on the 31st day of December of each year. (For each listed
chemical, if the prior period's ending inventory has not previously
been reported to DEA, this report should also detail the beginning
inventory for the period.) For purposes of this requirement, inventory
shall reflect the quantity of listed chemicals, whether in bulk or non-
exempt product form, held in storage for later distribution. Inventory
does not include waste material for destruction, material stored as an
in-process intermediate or other in-process material.
(4) The aggregate quantity of each listed chemical used for
internal consumption during the preceding calendar year, unless the
chemical is produced solely for internal consumption.
(5) The aggregate quantity of each listed chemical manufactured
which becomes a component of a product exempted from Section
1310.01(f)(1)(iv) or 1310.01(f)(1)(v) during the preceding calendar
year.
(6) Data shall identify the specific isomer, salt or ester when
applicable but quantitative data shall be reported as anhydrous base or
acid in kilogram units of measure.
Dated: March 19, 1996.
Stephen H. Greene,
Deputy Administrator, Drug Enforcement Administration.
[FR Doc. 96-7739 Filed 3-28-96; 8:45 am]
BILLING CODE 4410-09-M
