[Federal Register Volume 81, Number 238 (Monday, December 12, 2016)]
[Proposed Rules]
[Pages 89402-89407]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-29523]


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DEPARTMENT OF JUSTICE

Drug Enforcement Administration

21 CFR Part 1310

[Docket No. DEA-379]
RIN 1117-ZA04


Designation of Alpha-Phenylacetoacetonitrile (APAAN), a Precursor 
Chemical Used in the Illicit Manufacture of Phenylacetone, 
Methamphetamine, and Amphetamine, as a List I Chemical

AGENCY: Drug Enforcement Administration, Department of Justice.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Drug Enforcement Administration is proposing to designate 
the chemical alpha-phenylacetoacetonitrile (APAAN) and its salts, 
optical isomers, and salts of optical isomers, as a list I chemical 
under the Controlled Substances Act. APAAN is used in clandestine 
laboratories to illicitly manufacture the schedule II controlled 
substances phenylacetone (also known as phenyl-2-propanone or P2P), 
methamphetamine, and amphetamine and is important to the manufacture of 
these controlled substances. This action does not propose the 
establishment of a threshold for domestic and international 
transactions of APAAN. As such, all transactions involving APAAN, 
regardless of size, would be regulated. In addition, this action 
proposes that chemical mixtures containing APAAN would not be exempt 
from regulatory requirements at any concentration. Therefore, all 
transactions of chemical mixtures containing any quantity of APAAN 
would be regulated pursuant to the Controlled Substances Act.

DATES: Electronic comments must be submitted, and written comments must 
be postmarked, on or before January 11, 2017. Commenters should be 
aware that the electronic Federal Docket Management System will not 
accept comments after 11:59 p.m. Eastern Time on the last day of the 
comment period.

ADDRESSES: To ensure proper handling of comments, please reference 
``Docket No. DEA-379'' on all correspondence, including any 
attachments.
    The Drug Enforcement Administration encourages that all comments be 
submitted electronically through the Federal eRulemaking Portal, which 
provides the ability to type short comments directly into the comment 
field on the Web page or to attach a file for lengthier comments. 
Please go to http://www.regulations.gov/ and follow the online 
instructions at that site for submitting comments. Upon completion of 
your submission, you will receive a Comment Tracking Number for your 
comment. Please be aware that submitted comments are not 
instantaneously available for public view on Regulations.gov. If you 
have received a Comment Tracking Number, your comment has been 
successfully submitted and there is no need to resubmit the same 
comment. Paper comments that duplicate the electronic submission are 
not necessary and are discouraged. Should you wish to mail a paper 
comment in lieu of an electronic comment, it should be sent via regular 
or express mail to: Drug Enforcement Administration, Attn: DEA Federal 
Register Representative/ODW, 8701 Morrissette Drive, Springfield, 
Virginia 22152.

FOR FURTHER INFORMATION CONTACT: Michael J. Lewis, Office of Diversion 
Control, Drug Enforcement Administration; Mailing Address: 8701 
Morrissette Drive, Springfield, Virginia 22152; Telephone: (202) 598-
6812.

SUPPLEMENTARY INFORMATION:

Posting of Public Comments

    Please note that all comments received are considered part of the 
public record. They will, unless reasonable cause is given, be made 
available by the Drug Enforcement Administration (DEA) for public 
inspection online at http://www.regulations.gov. Such information 
includes personal identifying information (such as name, address, etc.) 
voluntarily submitted by the commenter. The Freedom of Information Act 
(FOIA) applies to all comments received. If you want to

[[Page 89403]]

submit personal identifying information (such as your name, address, 
etc.) as part of your comment, but do not want it to be made publicly 
available, you must include the phrase ``PERSONAL IDENTIFYING 
INFORMATION'' in the first paragraph of your comment. You must also 
place all of the personal identifying information you do not want made 
publicly available in the first paragraph of your comment and identify 
what information you want redacted.
    If you want to submit confidential business information as part of 
your comment, but do not want it to be made publicly available, you 
must include the phrase ``CONFIDENTIAL BUSINESS INFORMATION'' in the 
first paragraph of your comment. You must also prominently identify 
confidential business information to be redacted within the comment.
    Comments containing personal identifying information and 
confidential business information identified as directed above will 
generally be made publicly available in redacted form. If a comment has 
so much confidential business information or personal identifying 
information that it cannot be effectively redacted, all or part of that 
comment may not be made publicly available. Comments posted to http://www.regulations.gov may include any personal identifying information 
(such as name, address, and phone number) included in the text of your 
electronic submission that is not identified as directed above as 
confidential.
    An electronic copy of this proposed rule is available at http://www.regulations.gov for easy reference.

Legal Authority

    The 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, and are collectively referred to as the 
``Controlled Substances Act'' or the ``CSA'' for the purpose of this 
action. The DEA publishes the implementing regulations for these 
statutes in title 21 of the Code of Federal Regulations (CFR), chapter 
II. 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. Controlled substances have the potential for abuse and 
dependence and are controlled to protect the public health and safety.
    The CSA gives the Attorney General the authority to specify, by 
regulation, chemicals as list I or list II chemicals. 21 U.S.C. 802(34) 
and (35). A ``list I chemical'' is a chemical that is used in 
manufacturing a controlled substance in violation of title II of the 
CSA and is important to the manufacture of the controlled substance. 21 
U.S.C. 802(34). A ``list II chemical'' is a chemical (other than a list 
I chemical) that is used in manufacturing a controlled substance in 
violation of title II of the CSA. 21 U.S.C. 802(35). The current list 
of all listed chemicals is published at 21 CFR 1310.02. Pursuant to 28 
CFR 0.100(b), the Attorney General has delegated her authority to 
designate list I and list II chemicals to the Administrator of the Drug 
Enforcement Administration.
    In addition, the United States is a Party to the 1988 United 
Nations Convention against Illicit Traffic in Narcotic Drugs and 
Psychotropic Substances (1988 Convention). When the United States 
receives notification that a chemical has been added to Table I or 
Table II of the 1988 Convention pursuant to article 12, the United 
States is required to take measures it deems appropriate to monitor the 
manufacture and distribution of that chemical within the United States 
and to prevent its diversion. In addition, the 1988 Convention requires 
the United States to take other specified measures related to that 
chemical, including measures related to its international trade.

Background

    By a letter dated April 9, 2014, the Secretary-General of the 
United Nations informed the United States Government that the chemical 
alpha-phenylacetoacetonitrile (APAAN) was added to Table I of the 1988 
Convention. This letter was prompted by a March 19, 2014, decision at 
the 57th Session of the United Nations Commission on Narcotic Drugs 
(CND) to add APAAN to Table I. As a Party to the 1988 Convention, the 
United States is obligated, pursuant to article 12, to take measures it 
deems appropriate to monitor the manufacture and distribution of APAAN 
within the United States and to prevent its diversion. Article 12 also 
obligates the United States to take other specified measures related to 
APAAN, including measures related to its international trade. By 
designating APAAN as a list I chemical, the United States will fulfill 
its obligations under the 1988 Convention.
    APAAN is a primary precursor for the manufacture of phenylacetone 
(also known as phenyl-2-propanone (P2P) or benzyl methyl ketone), 
methamphetamine, and amphetamine. Throughout the 1970s, methamphetamine 
was illicitly produced in the United States, primarily with the 
precursor chemical P2P. In response to the illicit use of P2P, the DEA 
controlled P2P as a schedule II controlled substance in 1980 pursuant 
to the ``immediate precursor'' provisions of the CSA, specifically 21 
U.S.C. 811(e). Clandestine laboratory operators responded by developing 
a variety of synthetic methods for producing P2P.
    Congress and the DEA responded with the implementation of controls 
on P2P precursor chemicals such as phenylacetic acid (and its salts and 
esters), acetic anhydride, benzyl cyanide, benzaldehyde, and 
nitroethane, all of which are controlled as listed chemicals. 21 CFR 
1310.02 (a)-(b). However, clandestine laboratory operators soon 
adjusted to these controls on P2P (and its precursors). As an 
alternative for methamphetamine production, clandestine laboratory 
operators used the precursors ephedrine and pseudoephedrine, and as an 
alternative for amphetamine production, they used the precursor 
phenylpropanolamine.
    This led Congress and the DEA to implement stringent controls on 
the manufacture, distribution, importation, and exportation of 
ephedrine (its salts, optical isomers, and salts of optical isomers), 
pseudoephedrine, and phenylpropanolamine (controlled as list I 
chemicals), and pharmaceutical products containing these chemicals. The 
international community soon took similar measures.
    With the growing problem of illicit drug production, the issue of 
precursor chemical control has gained global attention. International 
efforts to prevent the illicit production of amphetamine-type 
stimulants (including amphetamine and methamphetamine), and 
international control of precursors, have made significant progress. 
International controls on precursors were established under article 12 
of the 1988 Convention.\1\ The 1988 Convention established two 
categories of controlled illicit drug precursor substances: Table I and 
Table II.\2\ Two international entities have played a crucial role in 
this effort: The United Nations Commission on Narcotic Drugs (CND)

[[Page 89404]]

and the International Narcotics Control Board.
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    \1\ Dec. 20, 1988, 1582 U.N.T.S. 95.
    \2\ Table I and Table II are annexed to the Convention.
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    In response to domestic and international controls on amphetamine 
and methamphetamine precursors, clandestine laboratory operators have 
continued to explore alternate methods of making these illicit drugs, 
including developing techniques to manufacture their own precursors and 
diverting other precursors to produce these precursors. This has led 
clandestine laboratory operators to utilize the P2P precursor APAAN. 
Clandestine laboratory operators currently use APAAN to manufacture 
P2P, which they then convert to methamphetamine and amphetamine.

APAAN

    APAAN also goes by the names: 1-cyano-1-phenylpropan-2-one; 2-
phenylacetoacetonitrile; 2-acetyl-2-phenylacetonitrile; alpha-acetyl-
benzene acetonitrile; phenyl aceto-acetonitrile; [alpha]-
acetylphenylacetonitrile; 3-oxo-2-phenylbutanenitrile; CAS Number: 
4468-48-8; and Identification Number: UN3439.
    The DEA has long been aware of APAAN's potential illicit use as a 
primary precursor for the production of P2P. The synthesis of P2P from 
benzyl cyanide involves the manufacture of APAAN prior to the final 
synthesis of P2P. Therefore, benzyl cyanide and APAAN share the same 
synthetic pathway in the production of P2P. In the late 1980's the DEA 
advocated for the Congressional control of the P2P precursor benzyl 
cyanide as a list I chemical.
    Due to the lack of industrial uses of APAAN, there has historically 
been a lack of available product for potential diversion. In recent 
years, however, large international seizures of APAAN have been made, 
primarily in Europe, which suggest there is a ready supply of APAAN 
from international chemical manufacturers.
    While the DEA has encountered one clandestine laboratory in the 
United States utilizing this synthetic pathway in recent years, the 
DEA's European counterparts have made a large number of APAAN seizures. 
For calendar years 2009 through 2014, the European Commission has 
documented at least 113 seizures and stop shipments, involving over 80 
metric tons of APAAN. Many of these seizures were associated with 
seizures of P2P and amphetamine. Many of these APAAN seizures 
originated from chemical suppliers based in Asia.
    The DEA has determined that APAAN is now readily available from 
commercial chemical suppliers and has identified 34 potential suppliers 
in China, 6 potential suppliers in the United States, 2 in Russia, and 
1 each in Bulgaria, Cameroon, the Czech Republic, France, and Germany.
    The DEA is concerned about the ease with which APAAN serves as a 
precursor chemical for illicit controlled substance production and with 
the international trafficking in this chemical. The international 
community echoes this concern. As noted above, the CND has added APAAN 
to Table I of the 1988 Convention. Therefore, the DEA is proposing the 
designation of APAAN as a list I chemical.

Proposed Designation of APAAN and Its Salts, Optical Isomers, and Salts 
of Optical Isomers as a List I Chemical

    The CSA, specifically 21 U.S.C. 802(34), and its implementing 
regulations at 21 CFR 1310.02(c), provides the Attorney General with 
the authority to specify, by regulation, a chemical as a ``list I 
chemical'' if the chemical is used in the manufacture of a controlled 
substance in violation of the CSA and is important to the manufacture 
of these controlled substances. Clandestine laboratory operators are 
using APAAN as the precursor material for the illicit manufacture of 
P2P, methamphetamine, and amphetamine. These three substances are all 
controlled substances under the CSA. APAAN is a primary precursor for 
P2P, for subsequent conversion to methamphetamine or amphetamine. 
Therefore, APAAN is important to the manufacture of a controlled 
substance. This action proposes the designation of APAAN as a list I 
chemical because the DEA finds that APAAN is used in the illicit 
manufacture of these controlled substances and is important to the 
illicit manufacture of these controlled substances.
    If finalized, handlers of APAAN would become subject to the 
chemical regulatory provisions of the CSA, including 21 CFR parts 1309, 
1310, 1313, and 1316. Since even a small amount of APAAN can make a 
significant amount of P2P, this action does not propose the 
establishment of a threshold for domestic and import transactions of 
APAAN in accordance with the provisions of 21 CFR 1310.04(g). 
Therefore, the DEA is proposing that all APAAN transactions, regardless 
of size, will be regulated transactions as defined in 21 CFR 
1300.02(b). As such, if finalized, all APAAN transactions will be 
subject to recordkeeping, reporting, import and export controls, and 
other CSA chemical regulatory requirements. In addition, each regulated 
bulk manufacturer shall submit manufacturing, inventory, and use data 
on an annual basis.

Chemical Mixtures of APAAN

    This rulemaking also proposes that chemical mixtures containing 
APAAN would not be exempt from regulatory requirements at any 
concentration unless an application for exemption of a chemical mixture 
is submitted by an APAAN manufacturer and the application is reviewed 
and accepted and the mixture exempted by the DEA under 21 CFR 1310.13 
(Exemption by Application Process). Since even a small amount of APAAN 
yields a significant amount of P2P, the DEA believes that regulation of 
chemical mixtures containing any amount of APAAN is necessary to 
prevent the illicit extraction, isolation, and use of the APAAN. 
Therefore, all chemical mixtures containing any quantity of APAAN would 
be subject to CSA control, unless the APAAN manufacturer is granted an 
exemption by the application process in accordance with 21 CFR 1310.13. 
This rule proposes the modification of the ``Table of Concentration 
Limits'' in 21 CFR 1310.12(c) to reflect the fact that chemical 
mixtures containing any amount of APAAN are subject to CSA chemical 
control provisions.

Exemption by Application Process

    The DEA has implemented an application process to exempt certain 
chemical mixtures from the requirements of the CSA and its implementing 
regulations. 21 CFR 1310.13. Manufacturers may submit an application 
for exemption for those mixtures that do not qualify for automatic 
exemption. Exemption status may be granted if the DEA determines that 
the mixture is formulated in such a way that it cannot be easily used 
in the illicit production of a controlled substance and that the listed 
chemical or chemicals cannot be readily recovered. 21 CFR 
1310.13(a)(1)-(2).

Requirements for Handling List I Chemicals

    If finalized as proposed, the designation of APAAN as a list I 
chemical will subject APAAN 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, importing, and exporting 
of a list I chemical. Upon publication of a final rule, persons 
potentially handling APAAN, including regulated chemical mixtures 
containing APAAN, would be

[[Page 89405]]

required to comply with the following list I chemical regulations:
    1. Registration. Any person who manufactures, distributes, imports, 
or exports APAAN, or proposes to engage in the manufacture, 
distribution, importation, or exportation of APAAN, must obtain a 
registration pursuant to 21 U.S.C. 822, 823, 957, 958. Regulations 
describing registration for list I chemical handlers are set forth in 
21 CFR part 1309. Consistent with 21 CFR parts 1309 and 1310, separate 
registrations will be required for manufacturing, distribution, 
importing, and exporting of APAAN. Different locations operated by a 
single entity require separate registration if any location is involved 
with the manufacture, distribution, importation, or exportation of 
APAAN. 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. 21 CFR 1309.23. Any person manufacturing, distributing, 
importing, or exporting an APAAN chemical mixture will be subject to 
the registration requirement under the CSA as well.
    The DEA notes that warehouses are exempt from the requirement of 
registration and may lawfully possess list I chemicals, if the 
possession of those chemicals is in the usual course of business or 
employment. 21 U.S.C. 822(c)(2), 21 U.S.C. 957(b)(1)(B). For purposes 
of this exemption, the warehouse must receive the list I chemical from 
a DEA registrant and shall only distribute the list I chemical back to 
the DEA registrant and registered location from which it was received. 
All other activities conducted by a warehouse do not fall under this 
exemption; 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. 21 CFR 1309.23(b)(1).
    Upon publication of a final rule, any person manufacturing, 
distributing, importing, or exporting APAAN or a chemical mixture 
containing APAAN will become subject to the registration requirement 
under the CSA. The DEA recognizes, however, that it is not possible for 
persons who are subject to the registration requirement to immediately 
complete and submit an application for registration and for the DEA to 
immediately issue registrations for those activities. Therefore, to 
allow continued legitimate commerce in APAAN, the 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 APAAN, 
provided that the DEA receives a properly completed application for 
registration on or before 30 days after publication of a final rule 
implementing regulations regarding APAAN. The temporary exemption for 
such persons will remain in effect until the 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 APAAN and 
chemical mixtures containing APAAN will be regulated while an 
application for registration or exemption is pending. This is necessary 
because not regulating 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 APAAN, nor does it supersede State or 
local laws or regulations. All handlers of APAAN 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 reports with respect to APAAN pursuant to 21 
U.S.C. 830 and in accordance with 21 CFR part 1310. Pursuant to 21 CFR 
1310.04, 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 will be 
required to submit manufacturing, inventory, and use data on an annual 
basis. 21 CFR 1310.05(d). Existing standard industry reports containing 
the required information will be acceptable, provided the information 
is separate or readily retrievable from the report.
    21 CFR 1310.05(a) requires that each regulated person shall report 
to the 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 the 
CSA and its corresponding regulations. Regulated persons are also 
required to report any proposed regulated transaction with a person 
whose description or other identifying characteristics the 
Administration 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; any in-transit loss in which the 
regulated person is the supplier; and any domestic regulated 
transaction in a tableting or encapsulating machine.
    3. Importation and Exportation. All importation and exportation of 
APAAN 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 (21 U.S.C. 880) allows 
for administrative inspections of these controlled premises as provided 
in 21 CFR part 1316, subpart A.
    6. Liability. Any activity involving APAAN not authorized by, or in 
violation of, the CSA, would be unlawful, and may subject the person to 
administrative, civil, and/or criminal action.

Regulatory Analyses

Executive Orders 12866 and 13563

    This notice of proposed rulemaking, which proposes the designation 
of APAAN as a list I chemical, has been developed in accordance with 
the principles of Executive Orders 12866 and 13563. The DEA followed 
the principles of these Executive Orders, even though it has been 
determined that this action is not a significant regulatory action.
    To determine whether this action is a significant regulatory 
action, the DEA utilized a least cost option analysis. At the outset, 
the DEA determined that the primary costs of this rule would come from 
complying with the registration, recordkeeping, reporting, and export 
and import requirements set forth in the CSA. Therefore, under the 
least cost option, an entity would choose to discontinue the sale of 
APAAN if proceeds from the sale are less than the cost of complying 
with the rule.
    The DEA has not identified any industrial uses of APAAN by domestic 
entities and its potential usage appears to be limited to research. 
Based on

[[Page 89406]]

independent research following a 2013 United Nations Questionnaire/
Survey on APAAN, the DEA identified three entities that have each 
imported APAAN. Two of the three entities had average annual sales of 
APAAN totaling $13 during the analysis period. The third entity had 
average annual sales of APAAN totaling $1,440 during the same period. 
Other chemical distributors list APAAN in their chemical catalogs. 
However, these entities do not manufacture APAAN, instead opting to 
purchase APAAN from international sources to fill special orders. These 
entities do not stock APAAN in inventory and the vast majority had no 
previous sales of APAAN.
    The registration fee to import a list I chemical is $1,523 per 
year. Based on the least cost option, these three entities would choose 
to discontinue the sale of APAAN because complying with the rule is 
more costly. Thus, the annual economic impact of the rule is $1,467 
(total annual sales of APAAN from the three affected entities). 
Therefore, this is evidence that this proposed rule would not have an 
annual effect on the economy of $100 million or more and is not a 
significant regulatory action.

Executive Order 12988

    This proposed regulation meets the applicable standards set forth 
in sections 3(a) and 3(b)(2) of Executive Order 12988 to eliminate 
drafting errors and ambiguity, minimize litigation, provide a clear 
legal standard for affected conduct, and promote simplification and 
burden reduction.

Executive Order 13132

    This proposed rulemaking does not have federalism implications 
warranting the application of Executive Order 13132. The proposed rule 
does not have substantial direct effects on the States, on the 
relationship between the national government and the States, or the 
distribution of power and responsibilities among the various levels of 
government.

Executive Order 13175

    This proposed rule does not have tribal implications warranting the 
application of Executive Order 13175. It does not have substantial 
direct effects on one or more Indian tribes, on the relationship 
between the Federal Government and Indian tribes, or on the 
distribution of power and responsibilities between the Federal 
Government and Indian tribes.

Regulatory Flexibility Act

    The Acting Administrator, in accordance with the Regulatory 
Flexibility Act (RFA), 5 U.S.C. 601-612, has reviewed this proposed 
rule and by approving it certifies that it will not have a significant 
economic impact on a substantial number of small entities. The purpose 
of this proposed rule is to designate APAAN as a list I chemical under 
the CSA. No less restrictive measures (i.e., non-control or control in 
list II) would enable the DEA to meet its statutory obligation under 
the CSA and its international obligations of the 1988 Convention. The 
DEA estimates that this rule affects three small entities. As discussed 
above, the DEA compared the dollar value of APAAN sales to the cost of 
registration. Further, the DEA assumed that if the cost of registration 
is more than the dollar value of APAAN sales, then each entity would 
discontinue the sale of APAAN.
    Two entities earned $13 in annual sales of APAAN while the third 
entity earned $1,440 in annual sales of APAAN. The cost of registration 
alone is $1,523 for each entity. Therefore, the DEA anticipates that 
each entity will discontinue the sale of APAAN because the cost of 
compliance is greater than the annual sales. As a result, the annual 
economic impact of the rule is $1,467.
    Using 1% of annual revenue as the criteria for significant economic 
impact, the DEA estimates that none of the three small entities will 
experience a significant economic impact if the proposed rule is 
finalized. The cost of the rule as a percentage of annual revenue for 
the three entities is, 0.00044%, 0.00036%, and 0.038%, respectively, 
which is less than 1% of the entities' annual income. Therefore, the 
proposed rule will not have a significant effect on a substantial 
number of small entities.

Unfunded Mandates Reform Act of 1995

    On the basis of information contained in the ``Regulatory 
Flexibility Act'' section above, the DEA has determined and certifies 
pursuant to the Unfunded Mandates Reform Act (UMRA) of 1995, 2 U.S.C. 
1501 et seq., that this action would not result in any Federal mandate 
that may result in the expenditure by State, local, and tribal 
governments, in the aggregate, or by the private sector, of 
$100,000,000 or more (adjusted for inflation) in any one year. 
Therefore, neither a Small Government Agency Plan nor any other action 
is required under provisions of the UMRA of 1995.

Paperwork Reduction Act

    This action does not impose a new collection of information 
requirement under the Paperwork Reduction Act of 1995. 44 U.S.C. 3501-
3521. The DEA does not anticipate that it will receive new registration 
applications for the purpose of engaging in transactions involving this 
chemical. The transactions in this chemical of which the DEA is aware 
are very small, and it does not appear to the DEA that it would be 
economically justifiable because DEA believes there is no legitimate 
market for manufacturing or engaging in commercial transactions in this 
chemical. This action would not impose recordkeeping or reporting 
requirements on State or local governments, individuals, businesses, or 
organizations. An agency may not conduct or sponsor, and a person is 
not required to respond to, a collection of information unless it 
displays a currently valid OMB control number.

List of Subjects 21 CFR Part 1310

    Drug traffic control, Exports, Imports, Reporting and recordkeeping 
requirements.

    Accordingly, for the reasons set forth in the preamble, part 1310 
of title 21 of the Code of Federal Regulations is proposed to be 
amended as follows:

PART 1310--RECORDS AND REPORTS OF LISTED CHEMICALS AND CERTAIN 
MACHINES

0
1. The authority citation for part 1310 continues to read as follows:

    Authority: 21 U.S.C. 802, 827(h), 830, 871(b), 890.

0
2. Amend Sec.  1310.02 by redesignating paragraphs (a)(1) through 
(a)(30) as paragraphs (a)(2) through (a)(31), respectively, and adding 
a new paragraph (a)(1) in the table ``List I chemicals'' to read as 
follows:


Sec.  1310.02  Substances covered.

* * * * *
    (a) * * *

------------------------------------------------------------------------
 
------------------------------------------------------------------------
(1) Alpha-phenylacetoacetonitrile and its salts, optical            8512
 isomers, and salts of optical isomers (APAAN)..........
------------------------------------------------------------------------

* * * * *
0
3. Amend Sec.  1310.04 by redesignating paragraphs (g)(1)(i) through 
(g)(1)(x) as paragraphs (g)(1)(ii) through (g)(1)(xi),

[[Page 89407]]

respectively, and adding a new paragraph (g)(1)(i) to read as follows:


Sec.  1310.04   Maintenance of records.

* * * * *
    (g) * * *
    (1) * * *
    (i) Alpha-phenylacetoacetonitrile and its salts, optical isomers, 
and salts of optical isomers (APAAN)
* * * * *
0
4. Amend Sec.  1310.09 by adding new paragraph (n) to read as follows:


Sec.  1310.09   Temporary exemption from registration.

* * * * *
    (n)(1) Each person required under Sections 302 and 1007 of the Act 
(21 U.S.C. 822, 957) to obtain a registration to manufacture, 
distribute, import, or export regulated alpha-phenylacetoacetonitrile 
(APAAN) and its salts, optical isomers, and salts of optical isomers, 
including regulated chemical mixtures pursuant to Section 1310.12 of 
this part, is temporarily exempted from the registration requirement, 
provided that the DEA receives a properly completed application for 
registration or application for exemption for a chemical mixture 
containing alpha-phenylacetoacetonitrile (APAAN) and its salts, optical 
isomers, and salts of optical isomers, pursuant to Section 1310.13 of 
this part on or before (30 days after publication of a Final Rule 
implementing regulations regarding APAAN). The exemption will remain in 
effect for each person who has made such application until the 
Administration has approved or denied that application. This exemption 
applies only to registration; all other chemical control requirements 
set forth in the Act and parts 1309, 1310, 1313, and 1316 of this 
chapter remain in full force and effect.
    (2) Any person who manufactures, distributes, imports or exports a 
chemical mixture containing alpha-phenylacetoacetonitrile (APAAN) and 
its salts, optical isomers, and salts of optical isomers whose 
application for exemption is subsequently denied by the DEA must obtain 
a registration with the DEA. A temporary exemption from the 
registration requirement will also be provided for those persons whose 
applications for exemption are denied, provided that the DEA receives a 
properly completed application for registration on or before 30 days 
following the date of official DEA notification that the application 
for exemption has been denied. The temporary exemption for such persons 
will remain in effect until the DEA takes final action on their 
registration application.
0
5. Amend Sec.  1310.12 paragraph (c) by adding in alphabetical order an 
entry ``Alpha-phenylacetoacetonitrile, and its salts, optical isomers, 
and salts of optical isomers. (APAAN)'' in the table ``Table of 
Concentration Limits'' to read as follows:


Sec.  1310.12   Exempt chemical mixtures.

* * * * *
    (c) * * *

                                          Table of Concentration Limits
----------------------------------------------------------------------------------------------------------------
                                           DEA chemical
                                             code No.            Concentration            Special conditions
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
Alpha-phenylacetoacetonitrile, and its              8512  Not exempt at any           Chemical mixtures
 salts, optical isomers, and salts of                      concentration.              containing any amount of
 optical isomers. (APAAN).                                                             APAAN are not exempt.
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------

* * * * *

    Dated: December 2, 2016.
Chuck Rosenberg,
Acting Administrator.
[FR Doc. 2016-29523 Filed 12-9-16; 8:45 am]
BILLING CODE 4410-09-P