Chemical Diversion

Contents

• Trafficking of Chemicals
• Chemical Control Initiatives

Acquisition of chemicals is a vital and readily identifiable component of the illicit trafficking cycle. It generally is agreed that the most effective way of controlling the traffic in methamphetamine is to control the diversion of chemicals from the licit market. Chemical control legislation enacted at the Federal and State levels increasingly has made it difficult for operators to obtain needed chemicals. Consequently, trafficking organizations constantly are seeking new sources and developing novel ways in which to circumvent the law. Therefore, tightening the existing chemical control laws (i.e., closing legislative loopholes) remains a critical component of the law enforcement effort to disrupt methamphetamine trafficking.

The amending of the Controlled Substances Act of 1970 (CSA) in 1988 to include the provisions of the Chemical Diversion and Trafficking Act (CDTA) provided law enforcement with an effective tool to attack the clandestine methamphetamine production problem. The CDTA imposed reporting, record keeping, and import/export notification requirements for regulated transactions in controlled chemicals. With the passage of this law, the United States became the first major chemical-producing nation to adopt mandatory controls over the chemicals used in the illicit production of controlled substances. Under this law, DEA has the authority to stop shipments of controlled chemicals from U.S. suppliers to companies outside the United States suspected of reselling or diverting them to drug traffickers.

Under the CDTA, bulk ephedrine and pseudoephedrine transactions were regulated; however, the law exempted over-the-counter ephedrine and pseudoephedrine drug products such as tablets and capsules from the record-keeping and reporting requirements. Under strong pressure from companies involved in the over-the-counter market of this product, the exemption was provided for ephedrine and pseudoephedrine products lawfully marketed under the Food, Drug, and Cosmetic Act.

Trafficking of Chemicals

Traffickers and clandestine laboratory operators quickly discovered the ease with which ephedrine tablets could be converted to methamphetamine and began to take advantage of this loophole in the law. Within a month following enactment of the CDTA and the controls it placed upon ephedrine powder, the first encounter in the United States with ephedrine tablets at a clandestine methamphetamine laboratory seizure occurred. Traffickers had quickly realized that non-controlled ephedrine tablets could be purchased easily in large quantities for subsequent conversion to methamphetamine.

Without the regulatory controls to prevent the diversion of ephedrine tablets, law enforcement efforts were directed toward investigations of rogue chemical companies that supplied the clandestine laboratory operators. For example, one mail-order distributor in Pittsburgh, Pennsylvania, diverted over 9,000 pounds of ephedrine tablets to a criminal organization in southern California. The owner and employees of the company were subsequently prosecuted, as well as the operator of the clandestine laboratory. The criminal prosecution of violative tablet distributors, at that time, was the exception and not the rule. The demand for ephedrine tablets by clandestine laboratory operators was met by a number of rogue tablet manufacturers and mail-order distributors who took full advantage of the loophole in the law.

When Congress passed the Domestic Chemical Diversion Control Act of 1993, it closed the loophole for single-entity ephedrine drug products and instituted DEA registration requirements of all importers, exporters, and distributors of the most important chemicals used in the manufacture of controlled substances. Pseudoephedrine tablets, however, remain unregulated. Other chemicals used in the manufacture of methamphetamine which are not under Federal regulation include iodine, used to make hydriodic acid, and phenylpropanolamine tablet products.

However, it soon was determined that the rogue chemical companies that were supplying ephedrine tablets were not the primary source of ephedrine for methamphetamine trafficking organizations operating from Mexico. Large shipments of ephedrine powder were encountered along the border and within the interior of Mexico. Unfortunately, because Mexico has no chemical control laws, the foreign sources could not be identified.

Domestically, 20 shipments - totaling almost 31 metric tons of ephedrine and pseudoephedrine - have been aborted (shipment seized, company ordered to suspend shipment, or company voluntarily suspends shipment). Many of these shipments were destined for rogue tablet manufacturers and mail-order distributors responsible for diverting ephedrine and pseudoephedrine tablets to clandestine laboratory operators. In addition, through voluntary cooperation with legitimate chemical companies, another 11 shipments - totaling 15.5 metric tons - were prevented from reaching these same rogue chemical companies.

From May to December 1995, DEA seized from three major rogue chemical companies over 25 metric tons of ephedrine and pseudoephedrine that were destined for illicit use in the clandestine manufacture of methamphetamine. In one of the more recent cases, records seized during the execution of Federal search warrants indicated that one rogue manufacturer had purchased approximately 191 metric tons of bulk ephedrine and pseudoephedrine between January 1994 and the end of May 1995. The investigation confirmed that the majority of these chemicals were converted to ephedrine and pseudoephedrine tablets and diverted to methamphetamine traffickers.

Over the past several years, authorities from the major ephedrine and pseudoephedrine source countries have been alerted to these massive chemical diversions. As a result, tighter export controls of ephedrine and pseudoephedrine have been enacted in India and the Czech Republic, and, in some instances, drug law enforcement authorities in these countries have cooperated to make ephedrine "controlled deliveries" to Mexico. In addition, authorities in Mexico, India, the Czech Republic, Thailand, Slovenia, and other European countries, with the assistance of the International Narcotics Control Board, have been cooperating in halting chemical diversion to Mexico and establishing monitoring programs to detect and prevent future diversion.

Chemical Control Initiatives

Unfortunately, at this time, very few States have any type of chemical control legislation. From State to State, chemicals are regulated/controlled by different authorities. For example, ephedrine is controlled as a drug product in 20 States and others only regulate sales or purchases of ephedrine as a chemical.

The Federal Government currently is preparing regulations to further reduce the diversion of pharmaceutical products containing chemicals, such as ephedrine and pseudoephedrine, that can be used to produce illegal drugs. DEA has consulted with corporations within the pharmaceutical industry to develop a solution to the diversion problem that does not unduly restrict the availability of these chemicals for legitimate use.

DEA published a Proposed Rule in the Federal Register on October 31, 1995, that is designed to place controls on certain pseudoephedrine drug products. This proposed action will effectively preclude the diversion of over-the-counter pseudoephedrine drug products. The regulation has been formulated so that retail sales of legitimate pseudoephedrine products for normal medical use will not be affected.