REGULATION & COMPLIANCE
Discussion
With a current maximum civil penalty of $ 49,772 / chemical / day and strict liability for most types of violations, even technical violations of TSCA, such as seemingly trivial chemical nomenclature errors, can subject a company to significant liability. The EPA rigidly adheres to the ERPs, under which six-figure penalties are common.
In addition, because non-compliant activities normally cannot properly continue without giving rise to potential criminal liability, immediate and complete cessation of all commercial activities with affected substance( s) is not uncommon under TSCA and can be even more problematic than the potential substantial fines the EPA often levies.
In our experience, the most common TSCA violations include non-reporting for the CDR, failure to submit TSCA section 12( b) export notices, and manufacturing or importing a substance that lacks Inventory status. The current penalties for failure for the first two are respectively $ 33,844 / chemical / site and $ 11,945 / chemical / country( and, in some cases, per year).
For the latter, the penalty varies significantly based on a number of factors, including the amount and type of substance involved and whether it was further distributed. However, in many cases the penalty is the current maximum penalty of $ 49,772.
In addition, for imported chemicals, an added penalty of up to $ 19,908 / day can be imposed due to accompanying TSCA section 13 import certification requirement violations. In all but extraordinary cases, the manufacture and import of a substance that lacks Inventory status must cease as soon as lack of status is ascertained.
To complicate matters, determining what is required to comply with TSCA is far from straightforward. From a legal perspective, much relevant EPA guidance is quite old, in many cases was not broadly disseminated to the regulated community, is frequently ambiguous and has evolved over the years.
In addition, absolutely critical to TSCA compliance are chemistry itself and the EPA’ s strict, highly nuanced, chemical nomenclature rules( a topic in and of itself), which suffer from many of the same shortcomings as TSCA’ s legal guidance. The centrepiece of TSCA, the Inventory, was initially compiled based on reports( some handwritten) submitted by industry in the late 1970s and that received only a cursory review at best. As a result, it is full of nomenclature errors that have significantly hindered compliance efforts over the years.
The Audit Policy has been available( at least in its initial form) since 1995 and can be used for any EPAadministered statute, but operates particularly well for TSCA violations. The‘ repeat violation’ prohibition does not come into play as much as one might anticipate; confidential business information( CBI) is of lesser concern than under‘ core’ TSCA; and many types of TSCA violations have no otherwise recoverable‘ economic benefit’.
Thus, strategic auditing and use of the Audit Policy can yield huge dividends. The corollary is that failure to use it, improper or inadequate consideration of accompanying supply chain issues, can have disastrous business consequences. Be wary indeed. ●
References: 1: Federal Register, 45 Fed. Reg. 59,770( 10 September 1980). 2: U. S. Environmental Protection Agency( EPA), Waste, Chemical, and Cleanup Enforcement Policy, Guidance and Publications. http:// www. epa. gov / enforcement / waste-chemical-and-cleanup-enforcement-policy-guidance-and-publications 3: Case Citation: 603 U. S. 109( 2024). 4: Case Citation: 17 F. 3d 1453( D. C. Cir. 1994). 5: Incentives for Self-Policing: Discovery, Disclosure, Correction and Prevention of Violations, 65 Fed. Reg. 19,618( 11 April 2000). 6: Notice of eDisclosure Portal Launch: Modernising Implementation of EPA’ s Self-Policing Incentive Policies, 80 Fed. Reg. 76,476.
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Thomas C. Berger
PARTNER
KELLER AND HECKMAN LLP berger @ khlaw. com www. khlaw. com
46 SPECIALITY CHEMICALS MAGAZINE ESTABLISHED 1981