E6-16325. Authorized Sources of Narcotic Raw Materials

AGENCY:

Drug Enforcement Administration (DEA), Department of Justice.

ACTION:

Notice of proposed rule making (NPRM).

SUMMARY:

DEA proposes to amend its regulations to update the list of non-traditional countries authorized to export narcotic raw materials (NRM) to the United States. This change would replace Yugoslavia with Spain. This proposed rule seeks to maintain a consistent and reliable supply of narcotic raw materials from a limited number of countries consistent with United States obligations under international treaties and resolutions.

DATES:

Written comments must be postmarked, and electronic comments must be sent, on or before December 4, 2006.

ADDRESSES:

To ensure proper handling of comments, please reference “Docket No. DEA-282P” on all written and electronic correspondence. Written comments being sent via regular mail should be sent to the Deputy Assistant Administrator, Office of Diversion Control, Drug Enforcement Administration, Washington, DC 20537, Attention: DEA Federal Register Representative/Liaison and Policy Section (ODL). Written comments sent via express mail should be sent to DEA Headquarters, Attention: DEA Federal Register Representative/ODL, 2401 Jefferson-Davis Highway, Alexandria, VA 22301. Comments may be directly sent to DEA electronically by sending an electronic message to [e-mail]. Comments may also be sent electronically through http://www.regulations.gov using the electronic comment form provided on that site. An electronic copy of this document is also available at the http://www.regulations.gov Web site. DEA will accept attachments to electronic comments in Microsoft word, WordPerfect, Adobe PDF, or Excel file formats only. DEA will not accept any file formats other than those specifically listed here.

FOR FURTHER INFORMATION CONTACT:

Christine A. Sannerud, Ph.D., Chief, Drug and Chemical Evaluation Section, Office of Diversion Control, Drug Enforcement Administration, Washington, DC 20537, Telephone [phone].

SUPPLEMENTARY INFORMATION:

Legal Authority

DEA enforces the Controlled Substances Act (CSA) (21 U.S.C. 801 et seq.), as amended. DEA regulations implementing this statute are published in Title 21 of the Code of Federal Regulations (CFR), parts 1300 to 1399. These regulations are designed to establish a framework for the legal distribution of controlled substances to deter their diversion for illegal purposes and to ensure an adequate and uninterrupted supply of these drugs for legitimate medical purposes. The CSA and its implementing regulations are consistent with United States treaty obligations that, among other things, address the production, import, and export of controlled substances.

Controlled Substances

Controlled substances are drugs that have a potential for abuse and addiction; these include substances classified as opiates, stimulants, depressants, hallucinogens, anabolic steroids, and drugs that are immediate precursors of these classes of substances. DEA lists controlled substances in 21 CFR part 1308. The substances are divided into five schedules: Schedule I substances have a high potential for abuse and have no accepted medical use. These substances may only be used for research, chemical analysis, or manufacture of other drugs. Schedule II-V substances have an accepted medical use and also have a potential for abuse and addiction. Narcotic raw materials (opium, poppy straw, and concentrate of poppy straw (CPS)) are in Schedule II and are the materials from which morphine, codeine, and thebaine are extracted for purposes of manufacturing a number of Schedule II controlled substances.

Sources of Narcotic Raw Materials

In May 1979, the United Nations' Economic and Social Council (ECOSOC) adopted Resolution 471, which called on importing countries such as the United States to support traditional suppliers of narcotic raw materials (NRM) and to limit imports from non-traditional supplying countries. The resolution, which was reaffirmed by ECOSOC in 1981, was adopted to limit overproduction of NRM, to restore a balance between supply and demand, and to prevent diversion to illicit channels. The United States, based on long-standing policy, does not cultivate or produce NRM, but relies solely on opium, poppy straw, and CPS produced in other countries for the NRM necessary to meet the legitimate medical needs of the United States. In response to Resolution 471, on August 18, 1981, DEA published a final rule specifying certain source countries of NRM (46 FR 41775); the rule is frequently referred to as the 80/20 rule. Under the final rule, currently codified as 21 CFR 1312.13(f) and (g), NRM can be imported from one of only seven countries. Traditional suppliers India and Turkey must be the source of at least 80 percent of the United States' requirement for NRM. Five countries—France, Poland, Hungary, Australia, and Yugoslavia—may be the source of not more than 20 percent. The United States continues to reaffirm its support of the original resolution by supporting similar resolutions each year at the CND.

Recently, DEA registered importers of NRM have imported approximately 90 percent of NRM from traditional suppliers India and Turkey. India is the only country that cultivates poppies for production of opium. All other exporting countries use the CPS method of NRM production, a method that allows the plant to go to seed; portions of the plant are then processed into a concentrate. It is generally believed that CPS is less divertible than opium. CPS may be rich in morphine (CPS-M) or rich in thebaine (CPS-T). The United States imports the majority of its CPS-M from Turkey, with Australia supplying much of the balance.

The 80/20 rule was established based on traditional import amounts and on the U.N. resolution calling on member nations to support traditional sources that have been reliable suppliers and that take measures to curtail diversion. The United States allowed a limited number of non-traditional suppliers to have access to the United States market based on past commercial relationships and on the desirability of preserving alternative sources. This approach was consistent with the U.N. Resolution because it supported India and Turkey, and ensured an adequate and uninterrupted supply of NRM, while limiting the number of supplying countries. DEA continues to support the 80/20 rule.

On June 6, 2005, the Government of Spain petitioned DEA seeking to be added to the list of non-traditional suppliers. Spain stated four reasons that granting its petition would be consistent with United States interests:

• The change would be consistent with the 80/20 rule because it maintains India and Turkey as the two traditional supplier countries, that is, Spain does not seek to be added to the list of traditional suppliers.
• The change would ensure adequate supplies of NRM.
• The change would not result in diversion because Spain maintains strict control and oversight over the cultivation and distribution of NRM.
• The change would allow DEA to monitor diversion and maintain cost-effective supplies.

In its petition, Spain explained that in the early 1970s, Spanish pharmaceutical firms sought authorization to cultivate opium poppies to produce NRM. In 1973, Spain authorized a single firm, Alcaliber, to cultivate, harvest, store, and prepare extracts from the opium poppy. Spain is now the fifth largest cultivator of opium poppies; Spain is the fourth largest producer of CPS and the third largest exporter of CPS-M.^[1] Spain has ratified international agreements to control production and commerce in opium products. In accordance with these international agreements, Spain has implemented a comprehensive regulatory regime for controlling the cultivation, production, and export of NRM. The petition stated that this control ensures that NRM produced in Spain are not diverted to illicit uses.

DEA has reviewed the petition and is proposing to change the list of non-traditional suppliers to remove Yugoslavia and replace it with Spain. DEA has determined that the successor states to the former Yugoslavia no longer produce NRM for export. Therefore, replacing Yugoslavia with Spain will continue to limit the number of non-traditional suppliers to the United States while ensuring that an adequate number of sources of NRM are available. The change does not otherwise affect how the 80/20 rule is implemented.

Regulatory Certifications

Regulatory Flexibility Act

The Deputy Assistant Administrator, Office of Diversion Control, hereby certifies that this rulemaking has been drafted in accordance with the Regulatory Flexibility Act (5 U.S.C. 605(b)), that he has reviewed this regulation, and by approving it certifies that this regulation will not have a significant economic impact on a substantial number of small business entities. The proposed rule imposes no new costs or burden on small entities.

Executive Order 12866

The Deputy Assistant Administrator, Office of Diversion Control, further certifies that this rulemaking has been drafted in accordance with the principles in Executive Order 12866 Section 1(b). It has been determined that this is a significant regulatory action. Therefore, this action has been reviewed by the Office of Management and Budget.

Executive Order 12988

This proposed rule meets the applicable standards set forth in Sections 3(a) and 3(b)(2) of Executive Order 12988.

Executive Order 13132

This proposed rule does not preempt or modify any provision of State law; nor does it impose enforcement responsibilities on any State; nor does it diminish the power of any State to enforce its own laws. Accordingly, this rulemaking does not have federalism implications warranting the application of Executive Order 13132.

Unfunded Mandates Reform Act of 1995

This proposed rule will not result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $117,000,000 or more (adjusted for inflation) in any one year, and will not significantly or uniquely affect small governments. Therefore, no actions were deemed necessary under the provisions of the Unfunded Mandates Reform Act of 1995.

Small Business Regulatory Enforcement Fairness Act of 1996

This proposed rule is not a major rule as defined by Section 804 of the Small Business Regulatory Enforcement Fairness Act of 1996. This rule will not result in an annual effect on the economy of $100,000,000 or more; a major increase in costs or prices; or significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based companies to compete with foreign-based companies in domestic and export markets.

List of Subjects in 21 CFR Part 1312

• Administrative practice and procedure
• Drug traffic control
• Exports
• Imports
• Reporting and recordkeeping requirements

For the reasons set out above, 21 CFR part 1312 is proposed to be amended as follows:

PART 1312—IMPORTATION AND EXPORTATION OF CONTROLLED SUBSTANCES

1. The authority citation for Part 1312 continues to read as follows:

Authority: 21 U.S.C. 952, 953, 954, 957, 958.

2. Section 1312.13 is proposed to be amended by revising paragraphs (f) and (g) to read as follows:

§ 1312.13

Issuance of import permit.

* * * * *

(f) Notwithstanding paragraphs (a)(1) and (a)(2) of this section, the Administrator shall permit, pursuant to 21 U.S.C. 952(a)(1) or (a)(2)(A), the importation of approved narcotic raw material (opium, poppy straw and concentrate of poppy straw) having as its source:

(1) Turkey,

(2) India,

(3) Spain,

(4) France,

(5) Poland,

(6) Hungary, and

(7) Australia.

(g) At least eighty (80) percent of the narcotic raw material imported into the United States shall have as its original source Turkey and India. Except under conditions of insufficient supplies of narcotic raw materials, not more than twenty (20) percent of the narcotic raw material imported into the United States annually shall have as its source Spain, France, Poland, Hungary and Australia.

Dated: September 26, 2006.

Joseph T. Rannazzisi,

Deputy Assistant Administrator, Office of Diversion Control.

Footnotes

1.  

“Narcotic Drugs: Estimated World Requirements for 2005—Statistics for 2003”, Tables II and XIII; International Narcotics Control Board (E/INCB/2004/2).