81 FR 3957 - Self-Certification and Employee Training of Mail-Order Distributors of Scheduled Listed Chemical Products

DEPARTMENT OF JUSTICE
Drug Enforcement Administration

Federal Register Volume 81, Issue 15 (January 25, 2016)

This document finalizes the Drug Enforcement Administration's rule implementing the requirements of the Combat Methamphetamine Enhancement Act of 2010 establishing self-certification and training requirements for mail-order distributors of scheduled listed chemical products. This action finalizes without change the interim final rule with request for comment published on April 13, 2011.

[Federal Register Volume 81, Number 15 (Monday, January 25, 2016)]
[Rules and Regulations]
[Pages 3957-3959]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-01377]



[[Page 3957]]

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DEPARTMENT OF JUSTICE

Drug Enforcement Administration

21 CFR Part 1314

[Docket No. DEA-347]
RIN 1117-AB30


Self-Certification and Employee Training of Mail-Order 
Distributors of Scheduled Listed Chemical Products

AGENCY: Drug Enforcement Administration, Department of Justice.

ACTION: Final rule.

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SUMMARY: This document finalizes the Drug Enforcement Administration's 
rule implementing the requirements of the Combat Methamphetamine 
Enhancement Act of 2010 establishing self-certification and training 
requirements for mail-order distributors of scheduled listed chemical 
products. This action finalizes without change the interim final rule 
with request for comment published on April 13, 2011.

DATES: This rule takes effect January 25, 2016.

FOR FURTHER INFORMATION CONTACT: Barbara J. Boockholdt, Office of 
Diversion Control, Drug Enforcement Administration, 8701 Morrissette 
Drive, Springfield, Virginia 22512; Telephone: (202) 598-6812.

SUPPLEMENTARY INFORMATION:

Legal Authority

    The Drug Enforcement Administration (DEA) implements and enforces 
titles II and III of the Comprehensive Drug Abuse Prevention and 
Control Act of 1970, as amended. 21 U.S.C. 801-971. Titles II and III 
are referred to as the ``Controlled Substances Act'' and the 
``Controlled Substances Import and Export Act,'' respectively, but they 
are collectively referred to as the ``Controlled Substances Act'' or 
the ``CSA'' for the purposes of this action. The DEA publishes the 
implementing regulations for these statutes in title 21 of the Code of 
Federal Regulations (CFR), parts 1300 to 1321. The CSA and its 
implementing regulations are designed to prevent, detect, and eliminate 
the diversion of controlled substances and listed chemicals into the 
illicit market while providing for the legitimate medical, scientific, 
research, and industrial needs of the United States.
    The CSA grants the Attorney General authority to promulgate rules 
and regulations relating to the registration and control of the 
manufacture, distribution, and dispensing of controlled substances and 
listed chemicals, 21 U.S.C. 821, and the efficient execution of his 
statutory functions. 21 U.S.C. 871(b). The Attorney General has 
delegated this authority to the Administrator of the DEA, 28 CFR 
0.100(b), who in turn has redelegated certain authorities to the Deputy 
Assistant Administrator of the DEA Office of Diversion Control 
(``Deputy Assistant Administrator''), 28 CFR part 0, appendix to 
subpart R.
    By this document, the DEA finalizes the interim final rule, ``Self-
Certification and Employee Training of Mail-Order Distributors of 
Scheduled Listed Chemical Products'' published on April 13, 2011, at 76 
FR 20518. This rule became effective on April 13, 2011. The interim 
final rule solicited public comments for which the comment period 
closed on June 13, 2011. No comments were received in response to the 
publication. No changes are being made to the rule.

Background

    The preamble to the interim final rule explained that section 2 of 
the Combat Methamphetamine Enhancement Act of 2010 (MEA) (Pub. L. 111-
268, 124 Stat. 2847) amended 21 U.S.C. 830(e)(2) to establish new 
requirements for mail-order distributors to self-certify with the DEA 
in order to sell scheduled listed chemical products at retail. Sales 
``at retail'' are those intended for personal use. 21 U.S.C. 802(48); 
21 CFR 1300.02(b). As Congress directed in the MEA, the DEA has 
established through this rule criteria for certifications of mail-order 
distributors consistent with the criteria previously established for 
certifications of other regulated sellers.\1\ The self-certification 
must include a statement that the mail-order distributor understands 
the requirements applicable under 21 CFR part 1314 and agrees to comply 
with those requirements. Prior to certification, mail-order 
distributors of scheduled listed chemical products are required to 
provide the DEA-developed training (available at the DEA's Web site) to 
their employees.
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    \1\ The DEA initially established criteria for certifications 
for regulated sellers pursuant to the Combat Methamphetamine 
Epidemic Act of 2005 (CMEA), Public Law 109-177, 120 Stat. 256. The 
DEA implemented the retail sales provisions of the CMEA through 
Interim Final Rule, ``Retail Sales of Scheduled Listed Chemical 
Products; Self-Certification of Regulated Sellers of Scheduled 
Listed Chemical Products,'' published Sept. 26, 2006 at 71 FR 56008; 
corrected at 71 FR 60609, Oct. 13, 2006.
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    The MEA is the most recent in a series of legislative actions aimed 
at preventing illicit drug manufacturers' access to methamphetamine 
precursor chemicals and enhancing penalties for methamphetamine 
production and trafficking. Methamphetamine is a highly addictive 
stimulant drug in schedule II of the CSA. As recognized through the 
acts of Congress, the clandestine manufacture and distribution of 
methamphetamine have been and continue to be serious national public 
health problems.\2\
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    \2\ E.g., H.R.Rep. No. 109-299, pt. 2 (2005); For a summary of 
effects of methamphetamine abuse and addiction see NIDA InfoFacts: 
Methamphetamine (available at http://www.drugabuse.gov/publications/drugfacts/methamphetamine).
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Who are ``mail-order distributors'' subject to the training and self-
certification requirements?

    The MEA refers to ``mail-order distributors'' but does not define 
the term. As stated in the interim final rule, the idea of mail-order 
distributor is developed in 21 CFR part 1314, which discusses regulated 
persons who make a sale at retail of a scheduled listed chemical 
product and are required under Sec.  1310.03(c) to submit a report of 
the sales transaction to the Administration. 21 CFR 1314.100(a). The 
CSA and its implementing regulations impose recordkeeping and reporting 
requirements on regulated persons who engage in transactions with a 
nonregulated person or who engage in an export transaction involving 
ephedrine, pseudoephedrine, phenylpropanolamine, or gamma-
hydroxybutyric acid, including drug products containing these 
chemicals, and who use or attempt to use the Postal Service or any 
private or commercial carrier. 21 CFR 1310.03(c). Of those subject to 
the recordkeeping and reporting requirements, only those distributors 
who engage in mail-order sales at retail of scheduled listed chemical 
products are subject to the training and self-certification 
requirements. 21 CFR 1314.101 and 1314.102. A ``mail-order sale,'' for 
purposes of part 1314, is defined by DEA regulations as a retail sale 
of scheduled listed chemical products for personal use where a 
regulated person uses or attempts to use the U.S. Postal Service or any 
private or commercial carrier to deliver the product to the customer. 
21 CFR 1314.03. Mail-order sales include purchase orders submitted by 
phone, mail, fax, Internet, or any method other than a face-to-face 
transaction. Id. The terms ``regulated person,'' ``scheduled listed 
chemical product,'' and ``at retail'' are defined in 21 U.S.C. 802.
    The DEA is taking this opportunity in publishing this final rule to 
provide in this supplementary information a clearer discussion of the 
development of

[[Page 3958]]

the statutory and regulatory requirements relating to ``mail-order 
distributors'' than was included in the preamble of the interim final 
rule. Before 1996 persons now labeled as ``mail-order distributors'' 
were not subject to specific regulation as a distinct group. Beginning 
in 1996, Congress has imposed a number of requirements on these 
distributors, specifically, in such laws as the Comprehensive 
Methamphetamine Control Act of 1996 (CMCA), Public Law 104-237, 110 
Stat. 3099; the Methamphetamine Anti-Proliferation Act of 2000 (MAPA), 
Public Law 106-310, 114 Stat. 1227; the Combat Methamphetamine Epidemic 
Act of 2005 (CMEA), Public Law 109-177, 120 Stat. 256; and the MEA.
    The CMCA established monthly reporting requirements applicable to 
regulated persons who engage in transactions with nonregulated persons 
involving ephedrine, pseudoephedrine, or phenylpropanolamine (including 
drug products containing these chemicals) and use or attempt to use the 
Postal Service or any private or commercial carrier. 21 U.S.C. 
830(b)(3)(B). The DEA implemented the monthly reporting requirement at 
21 CFR 1310.03(c). The MAPA amended 21 U.S.C. 830(b)(3)(B) to require 
regulated persons also to report mail-order export transactions 
involving ephedrine, pseudoephedrine, and phenylpropanolamine.
    The MAPA also established exemptions from the mail-order reporting 
requirements, including an exemption relating to non-``face-to-face'' 
transactions. 21 U.S.C. 830(b)(3)(D)(ii). That exemption stipulates 
that retail distributors generally are not required to report non-face-
to-face sales of U.S. Food and Drug Administration-approved (FDA-
approved) drug products containing ephedrine, pseudoephedrine, or 
phenylpropanolamine to ultimate users if the seller's activities 
related to those products are almost exclusively confined to sales for 
personal use, both in terms of number and volume of sales. Id.; 21 
U.S.C. 802(49). Subsequently, the CMEA specified, however, that this 
clause is not applicable to sales of scheduled listed chemical products 
at retail. 21 U.S.C. 830(b)(3)(D)(ii). The DEA interprets this to mean 
that ``retail stores that deliver these products to customers by mail 
or delivery services will need to comply with the provisions for mail 
order sales reporting for these transaction[s].'' 71 FR 56008, 56011, 
Sept. 26, 2006.
    Certain additional requirements apply to mail-order distributors. 
For instance, under the CMEA, mail-order distributors making retail 
sales of scheduled listed chemical products must confirm the 
purchaser's identity and may not sell more than 7.5 grams of ephedrine 
base, pseudoephedrine base, or phenylpropanolamine base in scheduled 
listed chemical products per customer during a 30-day period. 21 U.S.C. 
830(e)(2)(A)-(B). Most recently, the MEA added the requirement that 
mail-order distributors self-certify in order to sell scheduled listed 
chemical products at retail, and makes it unlawful for any person to 
negligently fail to self-certify as required under section 830. 21 
U.S.C. 830(e)(2)(C) and 842(a)(10).

Which locations are subject to the self-certification requirement?

    Section 2 of the MEA, codified at 21 U.S.C. 830(e)(2)(c), requires 
the Attorney General to establish by regulation ``criteria for 
certifications of mail-order distributors that are consistent with the 
criteria established for the certifications of regulated sellers'' 
under the CMEA. The CMEA specifies that a separate certification is 
required for each place of business at which scheduled listed chemical 
products are sold at retail. 21 U.S.C. 830(e)(1)(B)(ii)(II); 21 CFR 
1314.40(c). The DEA analyzed the plain language and purpose of the 
statute to interpret the meaning of ``each place of business'' where 
retail sales are made.\3\ As described in the interim final rule, DEA 
concludes that mail-order distributors are required to certify at: (1) 
Every location that prepares or packages product for distribution to 
customers, and (2) every location where employees accept payment for 
such sales. This interpretation is consistent with the intent of the 
MEA to ensure that mail-order distributors of scheduled listed chemical 
products are aware of their recordkeeping, reporting, customer 
identification, and sales limit requirements.
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    \3\ The DEA notes that this statutory language is materially 
different than the language requiring entities that manufacture, 
distribute, or dispense controlled substances or list I chemicals to 
register at ``each principal place of business or professional 
practice.'' 21 U.S.C. 822(e). The intent and rationale for the two 
requirements are different, as well.
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Regulatory Analyses

Executive Order 12866 (Regulatory Planning and Review)

    This regulation has been drafted and reviewed in accordance with 
Executive Order 12866, ``Regulatory Planning and Review,'' section 
1(b), Principles of Regulation. It has been determined that this is not 
``a significant regulatory action.'' As discussed above, and in the 
interim final rule, this action is codifying statutory provisions and 
involves no agency discretion as to regulatory alternatives. As 
analyzed in the interim final rule at 76 FR 20158, the DEA has 
determined that the MEA's requirements will not impose an annual cost 
on the economy of $100 million or more, the standard for an 
economically significant rule under Executive Order 12866. The DEA 
received no public comments with respect to the interim final rule.

Paperwork Reduction Act of 1995

    To address the new mandates of the MEA, the DEA has revised its 
existing information collection ``Self-Certification, Training and 
Logbooks for Regulated Sellers and Mail-Order Distributors of Scheduled 
Listed Chemical Products,'' Information Collection 1117-0046. The MEA 
requires mail-order distributors to train any employee who will be 
involved in selling scheduled listed chemical products and to document 
the training. Mail-order distributors must also self-certify to the DEA 
that all affected employees have been trained and that the mail-order 
distributor is in compliance with all provisions of the CMEA. No 
comments were received by the DEA regarding the information collection.

Regulatory Flexibility Analysis

    The Deputy Assistant Administrator, in accordance with the 
Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612), 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 
entities. As noted in the interim final rule, the RFA applies to rules 
that are subject to notice and comment. The DEA determined, as 
explained in the interim final rule, that public notice and comment 
were impracticable and contrary to the public interest. Consequently, 
the RFA does not apply.
    Although the RFA does not apply to this rulemaking, the DEA has 
reviewed the potential impacts in the interim final rule, in which the 
DEA certified that the rule will not have a significant economic impact 
on small entities. As published in the interim final rule, based on 
reports filed, DEA expects that the rule will affect only 9 firms, two 
of which are not small based on the Small Business Administration's 
size standards. For the seven small firms, the only costs are the $21 
annual fee, the time required to complete the certification (0.5 hours 
or about $20 for a new self-certification application), and

[[Page 3959]]

cost of training (0.5 hours or about $10). The cost of compliance for 
these firms, which appear to have between 5 and 25 employees, not all 
of whom would need to be trained, is less than $200 and in most cases, 
less than $100. The smallest mail order pharmacies (those with fewer 
than five employees) have average annual sales of $1 million. The cost 
of compliance is, therefore, less than 0.1 percent of sales and would 
not impose a significant economic burden on any small entity.
    The DEA received no public comments with respect to the interim 
final rule and the DEA has not received any other information that 
would materially change the impact of this rule on small entities. 
Therefore, the DEA concludes this rulemaking will not have a 
significant economic impact on a substantial number of small entities.

Unfunded Mandates Reform Act of 1995

    This rule will not impose unfunded mandates as defined by the 
Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4, 109 Stat. 48). 
This rule will not result in the expenditure by State, local and tribal 
governments, in the aggregate, or by the private sector, of $100 
million or more in any one year, and it 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.

E.O. 12988 (Civil Justice Reform)

    This regulation meets the applicable standards set forth in section 
3(a) and 3(b)(2) of Executive Order 12988 Civil Justice Reform.

Executive Order 13132 (Federalism)

    This rulemaking has been analyzed in accordance with the principles 
and criteria contained in Executive Order 13132, and the DEA has 
determined that this action does not have sufficient federalism 
implications to warrant the preparation of a federalism summary impact 
statement. This rulemaking does not impose enforcement responsibilities 
on any State; nor does it diminish the power of any State to enforce 
its own laws. The requirements of this rule are mandated under the MEA, 
and the DEA has no authority to alter them or change the preemption. 
Accordingly, this rulemaking does not have federalism implications 
warranting the application of Executive Order 13132.

Executive Order 13175 (Tribal Consultation)

    The DEA has analyzed this action under Executive Order 13175 and 
this rule will not have substantial direct effects on one or more 
Indian tribes; will not impose substantial direct compliance costs on 
Indian tribal governments; and will not preempt tribal law. Therefore, 
a tribal summary impact statement is not required.

Congressional Review Act

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

List of Subjects in 21 CFR Part 1314

    Drug traffic control, Reporting and recordkeeping requirements.

    Accordingly, the interim final rule amending 21 CFR part 1314 which 
was published at 76 FR 20518 on April 13, 2011, is adopted as a final 
rule without change.

    Dated: January 19, 2016.
Louis J. Milione,
Deputy Assistant Administrator, Office of Diversion Control.
[FR Doc. 2016-01377 Filed 1-22-16; 8:45 am]
 BILLING CODE 4410-09-P