REGULATION & COMPLIANCE consideration culpability, any history of similar violations, ability to pay, ability to continue in business, economic benefit gained from non-compliance and‘ other factors as justice may require’. Violations( and accompanying penalties) are broadly characterised as‘ per-day’( e. g., manufacturing or importing a substance that lacks suitable TSCA Inventory status), or‘ one-day’( e. g., failing to submit a TSCA section 8( a) Chemical Data Reporting( CDR) report).
The EPA can seek and impose criminal penalties of up to $ 50,000 / day of violation for‘ knowing’ or‘ wilful’ TSCA violations. TSCA also provides for separate criminal sanctions for individuals and organisations that violate TSCA knowing that this places an individual in imminent danger of death or serious bodily injury. The agency can also seek criminal sanctions of up to $ 1,000,000 / violation against organisations for criminal violations that result in imminent danger.
Enforcement process
A TSCA enforcement action is generally initiated by an EPA region, most often commencing with a site inspection. If and when a region believes that a violation has occurred, it determines the appropriate enforcement response, which include the following major options:
• Issuance of a Notice of Noncompliance( NON)
• Commencing a civil administrative penalty action that can involve filing an administrative complaint or a Consent Agreement and Final Order( CAFO)
• Commencing a civil judicial action through a referral to the US Department of Justice( DOJ)
• Referral to EPA’ s Criminal Investigation Division for investigation and potential criminal referral to DOJ
TSCA’ s civil administrative enforcement process is well established, but the 2024 Supreme Court decision in Securities & Exchange Commission( SEC) v. Jarkesy et al. makes its future uncertain. In Jarkesy, the court held that when the SEC seeks civil penalties for securities the Seventh Amendment entitles a defendant to a jury trial fraud. 3
While Jarkesy was based on SEC procedures, it has ramifications for other federal agencies including EPA that impose civil penalties using administrative procedures. To date, however, the applicability of Jarkesy to TSCA has not been directly before a court.
TSCA itself contains no statute of limitations, but in the 1994 decision in 3M Company v. Browner, the US Court of Appeals for the DC Circuit held that 28 USC. § 2462, the fiveyear statute of limitations generally applicable to federal civil penalties, applies to administrative penalty proceedings under TSCA. 4
Thus, in terms of liability management, in lieu of self-disclosure( discussed below), a company that has violated TSCA may simply cease the activity and await the expiration of the statute of limitations in the hope that EPA will not discover the violation within the statutory period.
The ERPs allow the EPA to reduce a penalty amount 25 % if the violation is voluntarily disclosed. The agency also may reduce a penalty amount by an additional 25 % if the disclosure is made within 30 days of discovery, up to 15 % more when the company mitigates or corrects the violations, and up to another 15 % based on the cooperative attitude of the company.
As an alternative to voluntary disclosure under the ERPs, companies can disclose TSCA violations under EPA’ s‘ Audit Policy.’ 3 This provides for 100 % mitigation of gravity-based civil penalties for violations if a company meets all of the following nine conditions of the Policy: 1. Systematic discovery of the violation through either an audit or compliance management system 2. Voluntary discovery 3. Prompt disclosure to EPA within 21 days of discovery 4. Independent discovery & disclosure 5. Correction & remediation 6. Prevention of recurrence; 7. No past violations( i. e., no notice of violation by a third party within the last three years for the same facility, or five years as part of a corporate pattern)
8. Exclusion of harmful violations or those subject to consent orders 9. Cooperation with the EPA To invoke the Audit Policy, one must submit a self-disclosure to the EPA through its electronic‘ eDisclosure’ system within 21 days of discovering the violation. 4
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