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materials needed to fully address all (c) Failure to take action. (1) FDA may Controlled Substances Act (CSA) deficiencies identified in the complete consider a biologics license applicant or exemptions for chemical mixtures response letter. A biologics license supplement applicant’s failure to either containing ephedrine and/or application or supplement for which resubmit or withdraw the application or pseudoephedrine with concentration FDA issued a complete response letter, supplement within 1 year after issuance limits at or below five percent. Upon the but which was withdrawn before of a complete response letter to be a effective date of the Interim Rule, all approval and later submitted again, is request by the applicant to withdraw the ephedrine and pseudoephedrine not a resubmission. application or supplement, unless the chemical mixtures, regardless of applicant has requested an extension of concentration and form, became subject PART 601—LICENSING time in which to resubmit the to the regulatory provisions of the CSA. I 23. The authority citation for 21 CFR application or supplement. FDA will DEA regulated the importation, part 601 continues to read as follows: grant any reasonable request for such an exportation, manufacture, and extension. FDA may consider an distribution of these chemical mixtures Authority: 15 U.S.C. 1451–1561; 21 U.S.C. applicant’s failure to resubmit the by requiring persons who handle these 321, 351, 352, 353, 355, 356b, 360, 360c– application or supplement within the chemical mixtures to register with DEA, 360f, 360h–360j, 371, 374, 379e, 381; 42 maintain certain records common to U.S.C. 216, 241, 262, 263, 264; sec. 122, Pub. extended time period or request an L. 105–115, 111 Stat. 2322 (21 U.S.C. 355 additional extension to be a request by business practice, and file certain note). the applicant to withdraw the reports, regarding these chemical application. mixtures. No comments to the Interim § 601.3 [Added] (2) If FDA considers an applicant’s Rule were received. This Final Rule I 24. Section 601.3 is added to subpart failure to take action in accordance with finalizes the Interim Rule without A to read as follows: paragraph (c)(1) of this section to be a change. request to withdraw the application, the § 601.3 Complete response letter to the EFFECTIVE DATE: August 11, 2008. applicant. agency will notify the applicant in FOR FURTHER INFORMATION CONTACT: writing. The applicant will have 30 days (a) Complete response letter. The Christine A. Sannerud, PhD, Chief, Drug from the date of the notification to & Chemical Evaluation Section, Office Food and Drug Administration will explain why the application or send the biologics license applicant or of Diversion Control, Drug Enforcement supplement should not be withdrawn Administration, Washington, DC 20537, supplement applicant a complete and to request an extension of time in response letter if the agency determines telephone (202) 307–7183, fax (202) which to resubmit the application or 353–1263, or e-mail [email protected]. that it will not approve the biologics supplement. FDA will grant any SUPPLEMENTARY INFORMATION: license application or supplement in its reasonable request for an extension. If present form. the applicant does not respond to the Background (1) Description of specific notification within 30 days, the deficiencies. A complete response letter On July 25, 2007 (72 FR 40738), the application or supplement will be will describe all of the deficiencies that Drug Enforcement Administration deemed to be withdrawn. the agency has identified in a biologics (DEA) published an Interim Rule with license application or supplement, Dated: June 26, 2008. Request for Comment removing the except as stated in paragraph (a)(2) of Jeffrey Shuren, Controlled Substances Act (CSA) this section. Associate Commissioner for Policy and exemptions for chemical mixtures (2) Inadequate data. If FDA Planning. containing ephedrine and/or determines, after a biologics license [FR Doc. E8–15608 Filed 7–9–08; 8:45 am] pseudoephedrine with concentration application or supplement is filed, that BILLING CODE 4160–01–S limits at or below five percent. Those the data submitted are inadequate to chemical mixtures included dietary support approval, the agency might supplements containing the List I issue a complete response letter without DEPARTMENT OF JUSTICE chemicals ephedrine or first conducting required inspections, pseudoephedrine, which are regulated testing submitted product lots, and/or Drug Enforcement Administration as chemical mixtures under the CSA. reviewing proposed product labeling. DEA had previously exempted these (3) Recommendation of actions for 21 CFR Part 1310 products from CSA regulatory control if the total concentration of the ephedrine approval. When possible, a complete [Docket No. DEA–284F] response letter will recommend actions and/or pseudoephedrine was at or that the applicant might take to place its RIN 1117–AB11 below five percent, in an effort to reduce biologics license application or the regulatory burden on the dietary and Elimination of Exemptions for supplement in condition for approval. nutritional supplement industry (68 FR (b) Applicant actions. After receiving Chemical Mixtures Containing the List 23195, May 1, 2003). However, on a complete response letter, the biologics I Chemicals Ephedrine and/or February 11, 2004, the Food and Drug license applicant or supplement Pseudoephedrine Administration (FDA) issued a Final applicant must take either of the AGENCY: Drug Enforcement Rule (69 FR 6787) declaring dietary following actions: Administration (DEA), Department of supplements containing ephedrine (1) Resubmission. Resubmit the Justice. alkaloids adulterated under the Federal application or supplement, addressing ACTION: Final rule. Food, Drug, and Cosmetic Act (the all deficiencies identified in the FFD&C Act) because these dietary complete response letter. SUMMARY: The Drug Enforcement supplements present an unreasonable (2) Withdrawal. Withdraw the Administration (DEA) is finalizing, risk of illness or injury. Effective April application or supplement. A decision without change, the Interim Rule with 12, 2004, the FDA rule prohibited the to withdraw the application or Request for Comment published in the sale of dietary supplements containing supplement is without prejudice to a Federal Register on July 25, 2007 (72 FR ephedrine alkaloids such as ephedra subsequent submission. 40738). The Interim Rule removed the (also known as Ma Huang, sida

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cordifolia and pinellia). The effect of the alkaloids (including ephedrine and Action Taken by the Interim Rule FDA rule was to ban the lawful pseudoephedrine.) Other plant sources marketing of these products. that contain such ephedrine alkaloids The Interim Rule published by DEA DEA notes that the FDA ban addresses include Sida cordifolia L. and Pinellia July 25, 2007 (72 FR 40738) removed the only the marketing of dietary ternata (Thunb.) Makino. Common exemption for chemical mixtures having supplements containing ephedrine names that have been used for the a total concentration of ephedrine and/ alkaloids. The raw materials used to various plants that contain ephedrine or pseudoephedrine of five percent (or manufacture these dietary supplements alkaloids include sea grape, yellow less). By removing these exemptions, all are not restricted by the FDA ban. horse, joint fir, popotillo, and country chemical mixtures containing ephedrine Accordingly, to control those materials, mallow. As DEA discussed in its Interim and/or pseudoephedrine became regulated chemical mixtures subject to DEA needed to address the importation, Rule, although the proportions of the control under the CSA, including exportation, manufacture, or various ephedrine alkaloids in botanical registration, recordkeeping, reporting, distribution of chemical mixtures with species vary from one species to and security controls. The rule also concentration limits of ephedrine and/ another, in most species used removed the exemption for the category or pseudoephedrine at or below five commercially, ephedrine is typically the of products consisting of harvested percent. As there yet may be legitimate predominant alkaloid in the raw plant material meeting the definition of uses for chemical mixtures with material. In addition to chemical chemical mixture, even when the plant concentration limits at or below five mixtures from synthetic sources, the material is unaltered from its natural percent, the importation, exportation, Interim Rule removed the exemption for state, (i.e., ephedra) that contains manufacture, and distribution of these those plant sources that contain the chemical mixtures (for purposes other ephedrine, N-methylephedrine, N- ephedrine alkaloids, ephedrine and/or than use in dietary supplements methylpseudoephedrine, pseudoephedrine. containing ephedrine alkaloids) are not norpseudoephedrine, prohibited by either FDA’s ban The names desert herb, Squaw tea, phenylpropanolamine, and/or regarding the marketing of such dietary Brigham tea, and Mormon tea refer to pseudoephedrine. supplements or by DEA law and North American species of ephedra that The Interim Rule did not prohibit the regulations. Accordingly, as discussed do not contain ephedrine alkaloids but importation, exportation, manufacture, in the Interim Rule (72 FR 40738, July have been misused to identify or distribution of chemical mixtures 25, 2007), DEA removed the exempt ephedrine alkaloid containing containing ephedrine or status of chemical mixtures containing ingredients. The Interim Rule did not pseudoephedrine in concentrations less ephedrine and/or pseudoephedrine with pertain to species of ephedra that do not than or equal to five percent. Rather, concentration limits at or below five contain ephedrine and/or DEA regulated the importation, percent. pseudoephedrine. exportation, manufacture, and DEA recognizes that ephedra distribution of these chemical mixtures materials containing ephedrine and/or Combat Methamphetamine Epidemic Act of 2005 by requiring persons who handle these pseudoephedrine are used legitimately chemical mixtures to register with DEA, by practitioners of Traditional Chinese On March 9, 2006, the President maintain certain records common to Medicine. This rulemaking does not signed the Combat Methamphetamine business practice, and file certain restrict the utilization of such material Epidemic Act of 2005 (CMEA), which is reports, regarding these chemical for such legitimate purposes. This Title VII of the USA PATRIOT mixtures. Chemical mixtures containing rulemaking will simply require Improvement and Reauthorization Act the List I chemicals ephedrine and importers and suppliers of such material of 2005. The CMEA mandates that DEA pseudoephedrine are still available for to comply with DEA recordkeeping, use. registration, quota and import/export limit the domestic production and requirements. importation of materials containing Comments Received ephedrine and pseudoephedrine Elimination of Exemption for Plant (including ephedra) to quantities DEA did not receive any comments to Material necessary for medical, scientific and its Interim Rule with Request for The Interim Rule also removed the other legitimate purposes (21 U.S.C. 826 Comment (72 FR 40738, July 25, 2007) exemption for DEA chemical mixture and 952(a)(1) as amended). As DEA eliminating the exemption for chemical regulations for certain plant materials. discussed extensively in the Interim mixtures with concentration limits of Specifically, the ephedrine alkaloids, Rule, DEA is concerned about the illicit the List I chemicals ephedrine and/or including, among others, ephedrine, use of ephedra type material in the pseudoephedrine of less than or equal to pseudoephedrine, norephedrine, N- clandestine production of five percent. Therefore, DEA is hereby methylephedrine, norpseudoephedrine, methamphetamine. While the legitimate finalizing that Interim Rule without N-methylpseudoephedrine, are market for dietary supplements change. chemical stimulants that occur naturally containing such material has been cut Provisions Specifically Applying to in some botanicals, but can be by FDA’s recent action, DEA observed Regulated Chemical Mixtures synthetically derived. The ingredient an increasing number of requests for Containing These List I Chemicals sources of the ephedrine alkaloids importation of below-five percent include raw botanicals (i.e., plants) and ephedrine and/or pseudoephedrine Effective August 24, 2007, any extracts from botanicals. Ma Huang, material. While there may be legitimate chemical mixture that contains Ephedra, Chinese Ephedra, and epitonin uses for these chemical mixtures, in ephedrine or pseudoephedrine is treated are several names used for botanical light of FDA’s action, DEA had become as a List I chemical. Transactions that ingredients, primarily from Ephedra increasingly concerned about the meet or exceed the cumulative monthly sinica Stapf, Ephedra equisetina Bunge, intended purpose of such material, threshold for the listed chemical, set Ephedra intermedia var. tibetica Stapf especially given that such material has forth at 21 CFR 1310.04, became and Ephedra distachya Linne (the been seized in clandestine drug regulated transactions. Persons Ephedras), that are sources of ephedrine laboratories. interested in handling a regulated

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mixture must comply with the manufacturing, inventory, and use data hold, manufacture, or distribute, following: on an annual basis (21 CFR 1310.05(d)). dispense, administer, or otherwise Registration. Any person who Bulk manufacturers producing the dispose of a regulated mixture or where manufactures, distributes, imports or mixture solely for internal consumption, records relating to those activities are exports a regulated mixture, or proposes e.g. formulating a nonregulated mixture, maintained, are controlled premises as to engage in such activities, with respect are not required to submit this defined in 21 CFR 1316.02(c). The CSA to a regulated mixture containing a List information. Existing standard industry (21 U.S.C. 880) allows for administrative I chemical, shall obtain a registration reports containing the required inspections of these controlled premises pursuant to the CSA (21 U.S.C. 822). information are acceptable, provided the as provided in 21 CFR part 1316 subpart Regulations describing registration for information is readily retrievable from A. List I chemical handlers are set forth in the report. 21 CFR part 1309. Further, 21 CFR 1310.05(a) requires Regulatory Certifications Separate registration is required for that each regulated person shall report Regulatory Flexibility Act manufacture, distribution, importing, to DEA: (1) Any regulated transaction The Deputy Administrator hereby and exporting. A separate registration is involving an extraordinary quantity of a certifies that this rulemaking has been required for each principal place of listed chemical, an uncommon method drafted in accordance with the business at one general physical of payment or delivery, or any other Regulatory Flexibility Act (5 U.S.C. location where List I chemicals are circumstance that the regulated person 601–612) and by approving it certifies manufactured, distributed, imported, or believes may indicate that the listed that this rule will not have a significant exported by a person (21 CFR 1309.23). chemical will be used in violation of the economic impact on a substantial Effective August 24, 2007, any person CSA; (2) any proposed regulated number of small entities. This rule manufacturing, distributing, importing, transaction with a person whose finalizes, without change, an Interim or exporting any amount of a regulated description or other identifying Rule with Request for Comment mixture became subject to the characteristics the Administration has eliminating the exemption for chemical registration requirement under the CSA. previously furnished to the regulated mixtures containing ephedrine and/or Recognizing that it is not possible for person; (3) any unusual or excessive pseudoephedrine with concentration DEA to immediately issue registrations loss or disappearance of a listed limits at or below five percent. DEA did to all applicants, DEA established in 21 chemical under the control of the not receive any comments to that CFR 1310.09 a temporary exemption regulated person, and any in-transit loss Interim Rule. from the registration requirement for in which the regulated person is the persons desiring to engage in activities supplier; and (4) any domestic regulated Executive Order 12866 with regulated mixtures, provided that transaction in a tableting or The Deputy Administrator certifies DEA received a properly completed encapsulating machine. 21 CFR that this rulemaking has been drafted in application for registration on or before 1310.03(c) requires that regulated accordance with the principles in August 24, 2007. The temporary persons who engage in a transaction Executive Order 12866. It has been exemption for such persons will remain with a nonregulated person or who determined that this rule is not a in effect until DEA takes final action on engage in an export transaction that ‘‘significant regulatory action’’ under their application for registration. involves ephedrine or pseudoephedrine, Executive Order 12866, section 3(f), The temporary exemption applies including drug products containing Regulatory Planning and Review, and solely to the registration requirement; these chemicals, and uses or attempts to accordingly this rule has not been all other chemical control requirements, use the Postal Service or any private or reviewed by the Office of Management including recordkeeping and reporting, commercial carrier must file monthly and Budget (OMB). This rule finalizes, were effective on August 24, 2007. reports of each such transaction. without change, an Interim Rule Additionally, the temporary exemption Imports/Exports. All imports/exports eliminating the exemption for chemical does not suspend applicable federal and brokered transactions of regulated mixtures containing ephedrine or criminal laws relating to the regulated mixtures containing ephedrine and/or pseudoephedrine with concentration mixture, nor does it supersede state or pseudoephedrine shall comply with the limits at or below five percent. DEA did local laws or regulations. All handlers of CSA (21 U.S.C. 952, 957 and 971). not receive any comments to its Interim a regulated mixture must comply with Regulations for importation and Rule. applicable state and local requirements exportation of List I chemicals are in addition to the CSA regulatory described in 21 CFR part 1313. Separate Executive Order 12988 controls. registration is necessary for each activity This regulation meets the applicable Records and Reports. The CSA (21 (21 CFR 1309.22). standards set forth in Sections 3(a) and U.S.C. 830) requires certain records to Security. Regulated persons must 3(b)(2) of Executive Order 12988. be kept and reports to be made provide effective controls and involving listed chemicals. Regulations procedures to guard against theft and Executive Order 13132 describing recordkeeping and reporting diversion of regulated mixtures through This rulemaking does not preempt or requirements are set forth in 21 CFR physical means or human or electronic modify any provision of state law; nor part 1310. A record must be made and monitoring. Regulated persons must does it impose enforcement maintained for two years after the date store the regulated mixtures in responsibilities on any state; nor does it of a regulated transaction involving a containers sealed so that tampering will diminish the power of any state to List I chemical. Only a distribution, be evident; if the mixture cannot be enforce its own laws. Accordingly, this receipt, sale, importation, exportation, stored in a sealed container, access to rulemaking does not have federalism brokerage, or trade of a regulated the chemicals must be controlled (21 implications warranting the application mixture above the established threshold CFR 1309.71). of Executive Order 13132. is a regulated transaction (21 CFR Administrative Inspection. Places, 1300.02(b)(28)). including factories, warehouses, or Unfunded Mandates Reform Act of 1995 Each regulated bulk manufacturer of a other establishments and conveyances, This rule will not result in the regulated mixture shall submit where regulated persons may lawfully expenditure by state, local, and tribal

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governments, in the aggregate, or by the List of Subjects In 21 CFR Part 1310 Background private sector, of $120,000,000 or more Drug traffic control, Exports, Imports, This document contains amendments (adjusted for inflation) in any one year, List I and List II chemicals, Reporting to the Income Tax Regulations (26 CFR and will not significantly or uniquely and recordkeeping requirements. part 1) regarding the taxation of affect small governments. Therefore, no qualified escrow accounts, qualified actions were deemed necessary under Adoption as Final Rule trusts, and other escrow accounts, the provisions of the Unfunded The Interim Rule amending part 1310 trusts, or funds used during section Mandates Reform Act of 1995. of Title 21 of the Code of Federal 1031 deferred exchanges of like-kind Paperwork Reduction Act Regulations, which published in the property, and of below-market loans to Federal Register on July 25, 2007, at 72 facilitators of these exchanges, under With publication of the Interim Rule FR 40738, is hereby adopted as a Final sections 468B(g) and 7872. (72 FR 40738, July 25, 2007), DEA Rule without change. On February 7, 2006, a partial eliminated the current exemption for withdrawal of notice of proposed Dated: June 27, 2008. chemical mixtures with concentration rulemaking, a notice of proposed limits of the List I chemicals ephedrine Michele M. Leonhart, rulemaking, and notice of public and/or pseudoephedrine of less than or Deputy Administrator. hearing were published in the Federal equal to five percent. This means that [FR Doc. E8–15704 Filed 7–9–08; 8:45 am] Register (REG–209619–93 and REG– all chemical mixtures containing the BILLING CODE 4410–09–P 113365–04, 71 FR 6231). A public List I chemicals ephedrine and/or hearing was held on June 6, 2006. A pseudoephedrine are regulated chemical revised Initial Regulatory Flexibility mixtures, regardless of concentration Analysis (IRFA) for REG–113365–04 limits. DEPARTMENT OF THE TREASURY was published in the Federal Register on March 20, 2007 (72 FR 13055). Due to this change in the regulations, Internal Revenue Service all persons who import, export, Written and electronic comments responding to the notice of proposed manufacture, or distribute chemical 26 CFR Part 1 mixtures containing these two List I rulemaking and the revised IRFA were chemicals were required to register with received. After consideration of all the DEA. They were also required to file [TD 9413] comments, the proposed regulations are reports regarding certain transactions, adopted as amended by this Treasury should certain criteria be met. RIN 1545–BD19 decision. The comments and amendments are discussed below. As the impact of this regulation was Escrow Accounts, Trusts, and Other minimal, DEA made minor revisions to Funds Used During Deferred Explanation of Provisions and the OMB information collections Exchanges of Like-Kind Property Summary of Comments entitled ‘‘Application for Registration Under Domestic Chemical Diversion AGENCY: Internal Revenue Service (IRS), 1. Definitions Control Act of 1993 and Renewal Treasury. The proposed regulations define Application for Registration under ACTION: Final regulations. exchange funds as relinquished Domestic Chemical Diversion Control property, cash, or cash equivalent that Act of 1993’’ (OMB control number SUMMARY: This document contains final secures an obligation of the transferee to 1117–0031, DEA Form 510), ‘‘Report of regulations under section 468B of the transfer replacement property, or Mail Order Transactions’’ (OMB control Internal Revenue Code (Code). The proceeds from a transfer of relinquished number 1117–0033), and ‘‘Import/ regulations provide rules regarding the property. A commentator suggested that Export Declaration for List I and List II taxation of income earned on escrow the definition of exchange funds as Chemicals’’ (OMB control number accounts, trusts, and other funds used relinquished property, cash, or cash 1117–0023). DEA did not receive any during deferred like-kind exchanges of equivalent that secures an obligation of comments regarding the number of property, and final regulations under the transferee to transfer replacement persons who may be affected by this section 7872 regarding below-market property should be deleted as confusing regulation. With publication of the loans to facilitators of these exchanges. and unnecessary, because it is irrelevant Interim Rule, DEA received approval The regulations affect taxpayers that whether amounts held in a qualified from the OMB to revise these engage in deferred like-kind exchanges account or fund secure or are intended information collections as discussed and escrow holders, trustees, qualified to secure the obligations of the above. intermediaries, and others that hold transferee. The final regulations do not funds during deferred like-kind adopt this comment. This definition of Congressional Review Act exchanges. exchange funds is necessary because it This Rule is not a major rule as DATES: Effective Date: These regulations encompasses transactions contemplated defined by Section 804 of the Small are effective July 10, 2008. in § 1.1031(k)–1(g)(3) in which, for Business Regulatory Enforcement Applicability Dates: For dates of example, a transferee of the Fairness Act of 1996 (Congressional applicability, see §§ 1.468B–6(f), relinquished property pays a deposit Review Act). This Rule will not result 1.7872–5(d), and 1.7872–16(g). before the property is transferred, or a in an annual effect on the economy of transferee of the relinquished property $100,000,000 or more; a major increase FOR FURTHER INFORMATION CONTACT: agrees to transfer replacement property in costs or prices; or significant adverse Concerning the final regulations under and deposits funds to secure the effects on competition, employment, section 468B, Jeffrey T. Rodrick, (202) obligations of the transferee (see investment, productivity, innovation, or 622–4930; concerning the final § 1.468B–6(e), Example 1). The on the ability of United States-based regulations under section 7872, David B. definition is an alternative to the companies to compete with foreign- Silber, (202) 622–3930 (not toll-free definition of exchange funds as based companies in domestic and numbers). proceeds from a transfer of relinquished export markets. SUPPLEMENTARY INFORMATION: property, and does not create a

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