DEA has implemented an application process to exempt certain chemical mixtures from the requirements of the CSA and its implementing regulations.^[6] Manufacturers may submit an application for exemption for those mixtures that do not meet the criteria set forth in 21 CFR 1310.12(d) for an automatic exemption. Pursuant to 21 CFR 1310.12(a), DEA may grant an exemption of a chemical mixture, by publishing a final rule in the Federal Register , if DEA determines that: (1) The mixture is formulated in such a way that it cannot be easily used in the illicit production of a controlled substance, and (2) the listed chemical or chemicals cannot be readily recovered.

Requirements for Handling List I Chemicals

If finalized as proposed, the designation of these three chemicals as list I chemicals will subject handlers (manufacturers, distributors, importers, and exporters) and proposed handlers to all of the regulatory controls and administrative, civil, and criminal actions applicable to the manufacture, distribution, importation, and exportation of a list I chemical. Upon publication of a final rule, persons potentially handling these three chemicals, including regulated chemical mixtures containing any of these three chemicals, would be required to comply with the following list I chemical regulations:

1. Registration. Any person who handles (manufactures, distributes, imports, or exports), or proposes to engage in such handling of, any of these three chemicals or a chemical mixture containing any of these three chemicals must obtain a registration pursuant to 21 U.S.C. 822, 823, 957, and 958. Regulations describing registration for list I chemical handlers are set forth in 21 CFR part 1309. DEA regulations require separate registrations for manufacturing, distributing, importing, and exporting of any of these three chemicals.^[7] Further, a separate registration is required for each principal place of business at one general physical location where list I chemicals are manufactured, distributed, imported, or exported by a person.^[8]

DEA notes that under the CSA, “warehousemen” are not required to register and may lawfully possess list I chemicals, if the possession of those chemicals is in the usual course of business or employment.^[9] Under DEA implementing regulations, the warehouse in question must receive the list I chemical from a DEA registrant, shall only distribute the list I chemical back to the DEA registrant, and registered location from which it was received.^[10] A warehouse that distributes list I chemicals to persons other than the registrant and registered location from which they were obtained is conducting distribution activities and is required to register as such.

Upon publication of a final rule, any person manufacturing, distributing, importing, or exporting any of these three chemicals or a chemical mixture containing any of these three chemicals will become subject to the registration requirement under the CSA. DEA recognizes, however, that it is not possible for persons subject to the registration requirement to immediately complete and submit an application for registration and for DEA to immediately issue registrations for those activities. Therefore, to allow continued legitimate commerce in these three chemicals, DEA is proposing to establish in 21 CFR 1310.09 a temporary exemption from the registration requirement for persons desiring to engage in activities with any of these three chemicals, provided that DEA receives a properly completed application for registration on or before 30 days after publication of a final rule implementing regulations regarding these three chemicals. The temporary exemption for such persons will remain in effect until DEA takes final action on their application for registration or application for exemption of a chemical mixture.

The temporary exemption applies solely to the registration requirement; all other chemical control requirements, including recordkeeping and reporting, would become effective on the effective date of the final rule. Therefore, all transactions of these three chemicals and chemical mixtures containing any of these three chemicals will be regulated while an application for registration or exemption is pending. This is necessary because failing to regulate these transactions could result in increased diversion of chemicals desirable to drug traffickers.

Additionally, the temporary exemption does not suspend applicable federal criminal laws relating to these three chemicals, nor does it supersede State or local laws or regulations. All handlers of any of these three chemicals must comply with applicable State and local requirements in addition to the CSA regulatory controls.

2. Records and Reports. Every DEA registrant would be required to maintain records and submit reports to DEA with respect to these three chemicals pursuant to 21 U.S.C. 830(a) and (b)(1) and (2) and in accordance with 21 CFR 1310.04 and 1310.05. Pursuant to 21 CFR 1310.04(a), a record must be made and maintained for two years after the date of a transaction involving a listed chemical, provided the transaction is a regulated transaction.

Each regulated bulk manufacturer of a listed chemical is required to submit manufacturing, inventory, and use data on an annual basis.^[11] Existing standard industry reports containing the required information will be acceptable, provided the information is separate or readily retrievable from the report.

The CSA and its implementing regulations require that each regulated person must report to DEA any regulated transaction involving an extraordinary quantity of a listed chemical, an uncommon method of payment or delivery, or any other circumstance that the regulated person believes may indicate that the listed chemical will be used in violation of subchapter I of the CSA. In addition, regulated persons must report any proposed regulated transaction with a person whose description or other identifying characteristics DEA has previously furnished to the regulated person, any unusual or excessive loss or disappearance of a listed chemical under the control of the regulated person, and any in-transit loss in which the regulated person is the supplier.^[12]

3. Importation and Exportation. All importation and exportation of these three chemicals would need to be in compliance with 21 U.S.C. 957, 958, and 971 and in accordance with 21 CFR part 1313.

4. Security. All applicants and registrants would be required to provide effective controls against theft and diversion in accordance with 21 CFR 1309.71–1309.73.

5. Administrative Inspection. Places, including factories, warehouses, or other establishments and conveyances, where registrants or other regulated persons may lawfully hold, manufacture, distribute, or otherwise dispose of a list I chemical or where records relating to those activities are maintained, are controlled premises as defined in 21 U.S.C. 880(a) and 21 CFR 1316.02(c). The CSA allows for administrative inspections of these controlled premises as provided in 21 CFR part 1316, subpart A. 21 U.S.C. 88).

6. Liability. Any activity involving these three chemicals not authorized by, or in violation of, the CSA would be unlawful, and may subject the person to administrative, civil, and/or criminal action.