TITLE VII--COMBAT METHAMPHETAMINE EPIDEMIC ACT OF 2005

Section 701. Short title

The short title is the `Combat Methamphetamine Epidemic Act of 2005.' Section 701 of the conference report is a new section.

SUBTITLE A--DOMESTIC REGULATION OF PRECURSOR CHEMICALS

Section 711. Scheduled listed chemical products; restrictions on sale quantity, behind-the counter access, and other safeguards

This section of the conference report is new. Section 711 reclassifies pseudoephedrine, phenylpropanolamine, and ephedrine as Schedule Listed Chemicals; reduces the Federal pertransaction sales limit for SLCs from 9 grams to 3.6 grams (the amount recently proposed by the Administration); requires behind-the-counter storage or locked cabinet storage of SLCs; requires that regulated sellers (retail distributors and pharmacies) maintain a written log of purchases; restricts monthly sales to no more than 9.0 grams per purchaser; imposes similar requirements on Internet sellers and mobile retail vendors; and requires each regulated seller to submit a certification that it is in compliance with these requirements, that its employees have been trained as to these requirements, and that records relating to such training are maintained at the retailers location. Such certifications are to be made available by the Attorney General to State and local law enforcement.

Section 712. Regulated transactions

This section of the conference report is new and repeals the Federal `blister pack' exemption, and clarifies the law to include derivatives of each of these chemicals. It makes conforming amendments to the current law, to accommodate the new sales restrictions, and makes another technical correction to make it clear that these sales limitations apply to drug combinations containing derivatives of pseudoephedrine, ephedrine, or phenylpropanolamine.

Section 713. Authority to establish production quotas

This section of the conference report is new and extends the Attorney General's existing authority to set production quotas for certain controlled substances (see 21 U.S.C. Sec. 826) to pseudoephedrine, ephedrine, and phenylpropanolamine. Currently, domestic production of these chemicals is not very high, as most of our country's supply is imported. With the adoption of the import quotas in section 715 of this Act (see below), however, the Attorney General would require corresponding authority within the U.S. if domestic production were to increase. Current law (as amended) would allow manufacturers to apply for increases in their production quotas (see 21 U.S.C. 826(e)).

Section 714. Penalties; authority for manufacturing; quota

This section of the conference report is new and expands the existing penalty for illegal production beyond established quotas (see 21 U.S.C. Sec. 842(b)) to take into account the Attorney General's new authority to set quotas for methamphetamine precursors.

Section 715. Restrictions on importation; authority to permit imports for medical, scientific, or other legitimate purposes

Section 715 of the conference report is a new provision and extends the Attorney General's existing authority to set import quotas for controlled substances (see 21 U.S.C. Sec. 952) to pseudoephedrine, ephedrine, and phenylpropanolamine. This section allows registered importers to apply for temporary or permanent increases in a quota to meet legitimate needs. The. Attorney General is required to act on all such applications within 60 days.

Section 716. Notice of importation or exportation; approval of sale or transfer by importer or exporter

Section 716 of the conference report is new and closes a loophole in the current regulatory system for imports and exports of precursor chemicals for methamphetamine and other synthetic drugs. Under current law, a company that wants to import or export pseudoephedrine or another precursor chemical must either: (1) Notify the Department of Justice 15 days in advance of the import or export; or (2) be a company that has previously imported or exported a precursor and is proposing to sell the chemicals to a customer with whom the company has previously dealt. (See 21 U.S.C. Sec. 971(a), (b).)

A problem can arise, however, when the sale that the importer or exporter originally planned falls through. When this happens, the importer or exporter must quickly find a new buyer for the chemicals on what is called the `spot market'--a wholesale market. Sellers are often under pressure to find a buyer in a short amount of time, meaning that they may be tempted to entertain bids from companies without a strong record of preventing diversion. More importantly, the Department of Justice has no opportunity to review such transactions in advance and suspend them if there is a danger of diversion to illegal drug production.

This section extends the current reporting requirements--as well as the current exemption for regular importers and customers--to post-import or export transactions. If an importer or exporter were required to file an initial advance notice with the Department of Justice 15 days before the shipment of chemicals, and the originally planned sale fell through, the importer or exporter would be required to file a second advance notice with DOJ identifying the new proposed purchaser. DOJ would then have 15 days to review the new transaction and decide whether it presents enough of a risk of diversion to warrant suspension. As is the case under existing law, a suspension can be appealed through an administrative process. (See 21 U.S.C. Sec. 971(c)(2)

If, however, the new proposed purchaser qualifies as a `regular' customer under existing law, the importer or exporter would not be required to file a second advance notice. (Note that under current law, DOJ does receive a record of these transactions after the fact, see 21 U.S.C. Sec. 971(b)(1)).

Section 717. Enforcement of restrictions on importation and of requirement of notice of transfer

This section of the conference report is new and makes a conforming amendment to current law

to extend existing penalties for illegal imports or exports to the new regulatory requirements added by sections 715 and 716 of the conference report.

Section 718. Coordination with United States Trade Representative

This section of the conference report is new and requires coordination by the Attorney General with the United States Trade Representative.