Control of Ergocristine, a Chemical Precursor Used in the Illicit LSD Has Been Manufactured Illegally ■ 8

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PART 522—IMPLANTATION OR DEPARTMENT OF JUSTICE and only microgram amounts are INJECTABLE DOSAGE FORM NEW required to produce overt ANIMAL DRUGS Drug Enforcement Administration hallucinations. It induces a heightened awareness of sensory input that is ■ 7. The authority citation for 21 CFR 21 CFR Part 1310 accompanied by an enhanced sense of part 522 continues to read as follows: [Docket No. DEA–320F] clarity, but reduced ability to control what is experienced. Authority: 21 U.S.C. 360b. RIN 1117–AB24 Illicit Production of LSD § 522.1081 [Amended] Control of Ergocristine, a Chemical Precursor Used in the Illicit LSD has been manufactured illegally ■ 8. In paragraph (b)(2) of § 522.1081, Manufacture of Lysergic Acid since the 1960s. A limited number of remove ‘‘Nos. 058639 and 063323’’ and Diethylamide, as a List I Chemical chemists, probably less than a dozen, in its place add ‘‘No. 058639’’. are believed to be manufacturing nearly AGENCY: Drug Enforcement all of the LSD available in the United PART 524—OPHTHALMIC AND Administration (DEA), Department of States. Clandestine laboratory operators TOPICAL DOSAGE FORM NEW Justice. must adhere to precise and complex ANIMAL DRUGS ACTION: Final rule. production procedures, and production SUMMARY: of LSD is relatively difficult. ■ 9. The authority citation for 21 CFR This rulemaking finalizes a February 24, 2010, Notice of Proposed part 524 continues to read as follows: LSD has historically been produced Rulemaking in which DEA proposed to from lysergic acid, which is made from Authority: 21 U.S.C. 360b. control the chemical precursor ergotamine or ergonovine, substances ergocristine as a List I chemical under derived from an ergot fungus on rye, or § 524.520 [Removed] the Controlled Substances Act (CSA). from lysergic acid amide, a chemical ■ 10. Remove § 524.520. Clandestine laboratories are using this found in morning glory seeds. chemical as a substitute for the List I § 524.1580c [Amended] chemicals ergotamine and ergonovine to Movement to Ergocristine as LSD illicitly manufacture the schedule I Precursor and Largest LSD Laboratory ■ 11. In paragraph (b) of § 524.1580c, controlled substance lysergic acid Ever Seized by DEA remove ‘‘Nos. 000010, 000069, and diethylamide (LSD). Because of the existing CSA 050749’’ and in its place add ‘‘Nos. This rule is being finalized as regulatory controls on the LSD 000010 and 000069’’. proposed. Therefore, handlers of precursors lysergic acid, lysergic acid ergocristine shall be subject to the amide, ergotamine, and ergonovine, PART 558—NEW ANIMAL DRUGS FOR chemical regulatory provisions of the clandestine laboratory operators have USE IN ANIMAL FEEDS CSA and its implementing regulations. sought uncontrolled sources of This rulemaking does not establish a precursor material for the production of ■ 12. The authority citation for 21 CFR threshold for domestic and international LSD. This has led to the illicit part 558 continues to read as follows: transactions of ergocristine. As such, all utilization of the precursor chemical transactions involving ergocristine, Authority: 21 U.S.C. 360b, 371. ergocristine as a direct substitute for regardless of size, shall be regulated. § 558.485 [Amended] This rulemaking also specifies that ergotamine and ergonovine for the illicit chemical mixtures containing production of LSD. In fact, the largest ■ 13. In § 558.485, in paragraph (b)(3), ergocristine will not be exempt from clandestine LSD laboratory ever seized remove ‘‘010439’’. regulatory requirements at any by DEA utilized ergocristine as the LSD precursor. Recipes documenting § 558.625 [Amended] concentration. Therefore, all transactions of chemical mixtures procedures for utilizing ergocristine in LSD synthesis are easily found on the ■ 14. In § 558.625, remove and reserve containing any quantity of ergocristine Internet. paragraphs (b)(42) and (b)(45). shall be regulated and subject to control under the CSA. Availability of the Precursor Chemical § 558.630 [Amended] DATES: This rulemaking becomes effective May 2, 2011. Persons seeking DEA has determined that ergocristine ■ 15. In § 558.630, remove and reserve registration must apply on or before is readily available from commercial paragraph (b)(4); and in paragraph May 2, 2011 to continue their business chemical suppliers. DEA has identified (b)(5), remove ‘‘010439,’’ and ‘‘016968,’’. pending final action by DEA on their at least three suppliers of ergocristine, of Dated: March 25, 2011. application. which one distributor is located domestically; the other two are based in Leslie Kux, FOR FURTHER INFORMATION CONTACT: Germany and the Czech Republic. Acting Assistant Commissioner for Policy. Christine A. Sannerud, PhD, Chief, Drug [FR Doc. 2011–7560 Filed 3–30–11; 8:45 am] and Chemical Evaluation Section, Office This rule implements both domestic BILLING CODE 4160–01–P of Diversion Control, Drug Enforcement and import/export controls on Administration, 8701 Morrissette Drive, ergocristine (and its salts). As noted in Springfield, VA 22152; telephone: (202) the February 24, 2010, Notice of 307–7183. Proposed Rulemaking (75 FR 8287), SUPPLEMENTARY INFORMATION: such controls are deemed necessary for law enforcement to identify domestic Background and international transactions in Lysergic acid diethylamide (LSD) is a ergocristine, due to growing concerns synthetic schedule I hallucinogen. It is regarding its use for the illicit the most potent hallucinogen known manufacture of LSD.

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Regulation of Ergocristine as a List I reviewed and accepted by DEA under require separate registration if any Chemical 21 CFR 1310.13 (Exemption by location is involved with the The CSA, specifically 21 U.S.C. Application Process). Since even a small manufacture, distribution, importation, 802(34), and its implementing amount of ergocristine is able to be used or exportation of ergocristine. Further, a regulations at 21 CFR 1310.02(c), in the illicit manufacture of a significant separate registration is required for each amount of LSD, the control of chemical principal place of business at one provide the Attorney General with the mixtures containing any amount of general physical location where List I authority to specify, by regulation, ergocristine is necessary to prevent the chemicals are manufactured, additional chemicals as List I illicit extraction, isolation, and use of distributed, imported, or exported by a chemicals’’ if they are used in the the ergocristine. Therefore, all chemical person (21 CFR 1309.23). Any person manufacture of a controlled substance mixtures containing any quantity of manufacturing, distributing, importing, in violation of the CSA, and are ergocristine will be subject to CSA or exporting an ergocristine chemical important to the manufacture of the control, unless the ergocristine mixture will be subject to the controlled substance. Ergocristine is manufacturer is granted an exemption registration requirement under the CSA being used in clandestine laboratories as by the application process discussed as well. the precursor material for the illicit below. The Table of Concentration DEA notes that warehouses are manufacture of the schedule I controlled Limits in 21 CFR 1310.12(c) is hereby exempt from the requirement of substance LSD. This rule implements modified to reflect the fact that chemical registration and may lawfully possess the regulation of ergocristine as a List I mixtures containing any amount of List I chemicals, if the possession of chemical because DEA finds that it is ergocristine are subject to CSA chemical those chemicals is in the usual course used in the illicit manufacture of the control provisions. of business (21 U.S.C. 822(c)(2), 21 controlled substance LSD and is U.S.C. 957(b)(1)(B)). For purposes of this important to the illicit manufacture of Exemption by Application Process exemption, the warehouse must receive the controlled substance LSD. DEA has implemented an application the List I chemical from a DEA Handlers of ergocristine shall be process to exempt chemical mixtures registrant and shall only distribute the subject to the chemical regulatory from the requirements of the CSA and List I chemical back to the DEA provisions of the CSA, including 21 CFR its implementing regulations (21 CFR registrant and registered location from parts 1309, 1310, 1313, and 1316. This 1310.13). Under the application process, which it was received. All other rulemaking does not establish a manufacturers may submit an activities conducted by a warehouse do threshold for domestic and import application for exemption for those not fall under this exemption; a transactions of ergocristine pursuant to mixtures that do not qualify for warehouse that distributes List I the provisions of 21 CFR 1310.04(g). automatic exemption. Exemption status chemicals to persons other than the Due to the high potency of LSD, even a can be granted if DEA determines that registrant and registered location from single gram (i.e., 1/28th of an ounce) of the mixture is formulated in such a way which they were obtained is conducting ergocristine can be used illicitly to make that it cannot be easily used in the illicit distribution activities and is required to thousands of dosage units of LSD. production of a controlled substance register as such (21 CFR 1309.23(b)(1)). Therefore, all ergocristine transactions, and that the listed chemical cannot be Any person manufacturing, regardless of size, shall be regulated readily recovered (i.e., it meets the distributing, importing, or exporting transactions as defined in 21 CFR conditions in 21 U.S.C. 802(39)(A)(vi)). ergocristine or a chemical mixture 1300.02(b)(28). As such, all ergocristine containing ergocristine will be subject to Requirements for Handling List I transactions will be subject to the registration requirement under the Chemicals recordkeeping, annual manufacturer CSA. DEA recognizes, however, that it reporting of inventory and use data, The designation of ergocristine as a is not possible for persons who are import/export controls, and other CSA List I chemical subjects ergocristine subject to the registration requirement to chemical regulatory requirements. handlers to all of the regulatory controls immediately complete and submit an and administrative, civil, and criminal application for registration and for DEA Comments sanctions applicable to the manufacture, to immediately issue registrations for DEA did not receive any comments in distribution, importing, and exporting of those activities. Therefore, to allow response to the February 24, 2010, a List I chemical. Persons potentially continued legitimate commerce in Notice of Proposed Rulemaking handling ergocristine, including ergocristine, DEA is establishing in (NPRM), which proposed the control of regulated chemical mixtures containing 21 CFR 1310.09, a temporary exemption ergocristine. Therefore, this rule ergocristine, will be required to comply from the registration requirement for finalizes the NPRM, as proposed. with the following List I chemical persons desiring to engage in activities As such, effective May 2, 2011, regulations: with ergocristine, provided that DEA handlers of ergocristine shall be subject Registration. Any person who receives a properly completed to the chemical regulatory provisions of manufactures, distributes, imports, or application for registration on or before the CSA and its implementing exports a List I chemical, or proposes to May 2, 2011. The temporary exemption regulations, including 21 CFR parts engage in the manufacture, distribution, for such persons will remain in effect 1309, 1310, 1313, and 1316. importation, or exportation of a List I until DEA takes final action on their chemical, must obtain a registration application for registration or Chemical Mixtures Containing pursuant to the CSA (21 U.S.C. 822, application for exemption of a chemical Ergocristine 957). Regulations describing registration mixture. Chemical mixtures containing for List I chemical handlers are set forth The temporary exemption applies ergocristine will not be exempt from in 21 CFR part 1309. Consistent with 21 solely to the registration requirement; regulatory requirements at any CFR parts 1309 and 1310, separate all other chemical control requirements, concentration, unless an application for registrations will be required for including recordkeeping and reporting, exemption of a chemical mixture is manufacturing, distribution, importing, would become effective May 2, 2011. submitted by an ergocristine and exporting of ergocristine. Different Therefore, all transactions of manufacturer and the application is locations operated by a single entity ergocristine and chemical mixtures

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containing ergocristine will be regulated Security. All applicants and identify only two foreign firms that list while an application for registration or registrants shall provide effective ergocristine as a product. These firms exemption is pending. This is necessary controls against theft and diversion of appear to sell ergocristine as an active because not regulating these chemicals as described in 21 CFR pharmaceutical ingredient, but a search transactions could result in increased 1309.71. of the Food and Drug Administration’s diversion of chemicals desirable to drug Administrative Inspection. Places, database of approved drugs did not traffickers. including factories, warehouses, or identify any drug with ergocristine as an Additionally, the temporary other establishments and conveyances, active ingredient. Consequently, DEA exemption does not suspend applicable where registrants or other regulated does not believe that at this time any Federal criminal laws relating to persons may lawfully hold, firm conducting legitimate business is ergocristine, nor does it supersede State manufacture, distribute, dispense, likely to have to comply with the rule. or local laws or regulations. All administer, or otherwise dispose of a handlers of ergocristine must comply regulated chemical/chemical mixture or Executive Order 12988 with applicable State and local where records relating to those activities requirements in addition to the CSA are kept or required to be kept, are This regulation meets the applicable regulatory controls. controlled premises as defined in standards set forth in Sections 3(a) and Records and Reports. The CSA 21 CFR 1316.02(c). The CSA (21 U.S.C. 3(b)(2) of Executive Order 12988, Civil (21 U.S.C. 830) requires that certain 880) allows for administrative Justice Reform. records be kept and reports be made inspections of these controlled premises Executive Order 13132 with respect to listed chemicals. as provided in 21 CFR part 1316, Regulations describing recordkeeping Subpart A. This rulemaking does not preempt or and reporting requirements are set forth Regulatory Certifications modify any provision of State law; nor in 21 CFR part 1310. Pursuant to 21 CFR does it impose enforcement 1310.04, a record must be made and Regulatory Flexibility Act and Small responsibilities on any State; nor does it maintained for two years after the date Business Concerns diminish the power of any State to of a transaction involving a listed The Administrator hereby certifies enforce its own laws. Accordingly, this chemical, provided the transaction is a that this rulemaking has been drafted in rulemaking does not have federalism regulated transaction. accordance with the Regulatory implications warranting the application Each regulated bulk manufacturer of a Flexibility Act (5 U.S.C. 601–612). DEA of Executive Order 13132. listed chemical will be required to has been able to identify only one U.S. submit manufacturing, inventory, and distributor that lists ergocristine among Unfunded Mandates Reform Act of 1995 use data on an annual basis (21 CFR its products. Because most of the firm’s This rule will not result in the 1310.05(d)). Existing standard industry product source appears to be located expenditure by State, local, and Tribal reports containing the required outside the U.S. and because DEA has governments, in the aggregate, or by the information will be acceptable, not been able to identify any U.S. private sector, of $126,400,000 or more provided the information is readily manufacturer that produces a product retrievable from the report. containing ergocristine, DEA does not (adjusted for inflation) in any one year, Title 21 CFR 1310.05(a) requires that consider it likely that this domestic and will not significantly or uniquely each regulated person shall report to distributor would be subject to the rule, affect small governments. Therefore, no DEA any regulated transaction involving unless they imported ergocristine. The actions were deemed necessary under an extraordinary quantity of a listed only probable legitimate commerce in the provisions of the Unfunded chemical, an uncommon method of this chemical appears to be the use of Mandates Reform Act of 1995. payment or delivery, or any other ergocristine as precursor material for the Congressional Review Act circumstance that the regulated person synthesis of a research compound. If believes may indicate that the listed used for this purpose, then there would This rule is not a major rule as chemical will be used in violation of the be a registration and recordkeeping defined by Section 804 of the CSA and its corresponding regulations. requirement for this distributor to Congressional Review Act/Small Persons are also required to report any import the ergocristine. Such use would Business Regulatory Enforcement proposed regulated transaction with a likely be extremely limited. Therefore, Fairness Act of 1996 (Congressional person whose description or other the Administrator certifies that this rule Review Act). This rule will not result in identifying characteristics the will not have a significant economic an annual effect on the economy of Administration has previously impact on a substantial number of small $100,000,000 or more; a major increase furnished to the regulated person; any entities. unusual or excessive loss or in cost or prices; or significant adverse disappearance of a listed chemical Executive Order 12866 effects on competition, employment, under the control of the regulated The Administrator certifies that this investment, productivity, innovation, or person; any in-transit loss in which the rulemaking has been drafted in on the ability of United States-based regulated person is the supplier; and accordance with the principles in companies to compete with foreign- any domestic regulated transaction in a Executive Order 12866 Section 1(b). It based companies in domestic and tableting or encapsulating machine. has been determined that this is ‘‘a export markets. Import/Export. All imports, exports, significant regulatory action.’’ Therefore, List of Subjects in 21 CFR Part 1310 and international transactions of a listed this action has been reviewed by the chemical shall comply with the CSA Office of Management and Budget. DEA Drug traffic control, Exports, Imports, import and export provisions including has not conducted an economic analysis Reporting and recordkeeping 21 U.S.C. 957 and 971. Regulations for of the final rule because DEA has been requirements. importation and exportation of List I able to identify only one company with chemicals are described in 21 CFR part a U.S. address that lists ergocristine For the reasons set out above, 21 CFR 1313. among its products. DEA was able to part 1310 is amended as follows:

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PART 1310—RECORDS AND ■ 4. Section 1310.09 is amended by (2) Any person who manufactures, REPORTS OF LISTED CHEMICALS adding new paragraph (l) to read as distributes, imports, or exports a AND CERTAIN MACHINES follows: chemical mixture containing ergocristine and its salts whose ■ 1. The authority citation for part 1310 § 1310.09 Temporary exemption from registration. application for exemption is continues to read as follows: subsequently denied by DEA must * * * * * Authority: 21 U.S.C. 802, 827(h), 830, (l)(1) Each person required under obtain a registration with DEA. A 871(b), 890. sections 302 and 1007 of the Act temporary exemption from the ■ 2. Section 1310.02 is amended by (21 U.S.C. 822, 957) to obtain a registration requirement will also be adding a new paragraph (a)(30) to read registration to manufacture, distribute, provided for those persons whose as follows: import, or export regulated ergocristine applications for exemption are denied, provided that DEA receives a properly § 1310.02 Substances covered. and its salts, including regulated chemical mixtures pursuant to completed application for registration * * * * * § 1310.12, is temporarily exempted from on or before 30 days following the date (a) * * * the registration requirement, provided of official DEA notification that the (30) Ergocristine and its salts 8612 that DEA receives a properly completed application for exemption has been * * * * * application for registration or denied. The temporary exemption for ■ 3. Section 1310.04 is amended by application for exemption for a such persons will remain in effect until redesignating paragraphs (g)(1)(ii) chemical mixture containing DEA takes final action on their through (g)(1)(ix) as paragraphs ergocristine and its salts pursuant to registration application. (g)(1)(iii) through (g)(1)(x), and adding a § 1310.13 on or before May 2, 2011. The ■ new paragraph (g)(1)(ii) to read as exemption will remain in effect for each 5. Section 1310.12 is amended by follows: person who has made such application adding in alphabetical order an entry until the Administration has approved ‘‘Ergocristine and its salts’’ in the table § 1310.04 Maintenance of records. or denied that application. This ‘‘Table of Concentration Limits’’ to read * * * * * exemption applies only to registration; as follows: (g) * * * all other chemical control requirements § 1310.12 Exempt chemical mixtures. (1) * * * set forth in the Act and parts 1309, (iii) Ergocristine and its salts 1310, 1313, and 1316 of this chapter * * * * * * * * * * remain in full force and effect. (c) * * *

TABLE OF CONCENTRATION LIMITS

DEA chemical code No. Concentration Special conditions

List I Chemicals

******* Ergocristine and its salts ...... 8612 Not exempt at any concentra- Chemical mixtures containing any amount of ergocristine tion. and its salts are not exempt.

*******

* * * * * ACTION: Correcting amendment. M. Axelrod, (202) 622–7713 (not toll- Dated: March 21, 2011. free numbers). SUMMARY: Michele M. Leonhart, This document describes SUPPLEMENTARY INFORMATION: correcting amends to final and Administrator. temporary regulations concerning the Background [FR Doc. 2011–7548 Filed 3–30–11; 8:45 am] treatment of certain intercompany gain The final and temporary regulations BILLING CODE 4410–09–P with respect to stock owned by (TD 9515) that are the subject of this members of a consolidated group. These document are under section 1502 of the regulations provide for the Internal Revenue Code. DEPARTMENT OF THE TREASURY redetermination of intercompany gain as excluded from gross income in certain Need for Correction Internal Revenue Service transactions involving stock transfers As published, the final and temporary between members of a consolidated regulations (TD 9515) contain errors that 26 CFR Part 1 group. These errors were made when may prove to be misleading and are in [TD 9515] the agency published final and need of clarification. temporary regulations (TD 9515) in the RIN 1545–BH20 Federal Register on Friday, March 4, List of Subjects in 26 CFR Part 1 Guidance Under Section 1502; 2011 (76 FR 11956). Income taxes, Reporting and recordkeeping requirements. Amendment of Matching Rule for DATES: This correction is effective on Certain Gains on Member Stock; March 31, 2011, and is applicable on Correction of Publication Correction March 4, 2011. Accordingly, 26 CFR part 1 is AGENCY: Internal Revenue Service (IRS), FOR FURTHER INFORMATION CONTACT: John corrected by making the following Treasury. F. Tarrant, (202) 622–7790 or Lawrence correcting amendments:

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