TSCA Advisory 99 - II

EPA has initiated a new self-disclosure program to allow companies that have violated the TSCA § 12(b) export notification requirement to receive a non-punitive Notice of Noncompliance ("NON") for violations they discover themselves and self-disclose to EPA. The program is referred to as "VADEN," an acronym for Voluntary Audit and Disclosure of Export Notification, and is intended to ameliorate a recent change to the Agency's Enforcement Response Policy for Reporting and Recordkeeping Rules and Requirements ("ERP") that otherwise eliminates the NON as an authorized penalty for TSCA § 12(b) violations. Under the VADEN program, companies that do not have a prior history of TSCA § 12(b) violations are eligible for a limited time to conduct an audit, or simply to report any violations of which they presently are aware, and to receive a NON. Further information follows below.

As background, TSCA requires exporters of chemical substances to submit a written notification to EPA prior to shipping abroad any chemical substance that is subject to regulation under TSCA §§ 4, 5, 6 or 7. EPA is required to notify the government of the receiving country. Chemicals subject to the TSCA § 12 export notification requirement are identified on EPA's Chemicals on Reporting Rules ("CORR") list.

EPA's TSCA Enforcement Response Policies prescribe penalties for TSCA violations. Under the TSCA ERP for §§ 8, 12 and 13, the penalty for failure to comply with TSCA § 12(b) is $6,000 for each failure to file. Prior to June 1, 1999, the ERP prescribed a NON as the penalty for a company that had not previously received one, even if the first prosecution under TSCA § 12(b) was for multiple violations. Thus, for example, a company with thirty TSCA § 12(b) violations was eligible to receive a NON if it had not previously received one, but was subject to a penalty of $180,000 if it had. Effective June 1, 1999, the ERP was revised to eliminate NONs as authorized penalties for violations of TSCA §§ 12 and 13. Accordingly, the penalty for a TSCA § 12(b) violation now is $6,000 for the first violation, as well as subsequent violations.

Under the VADEN program, exporters with no prior TSCA § 12(b) enforcement actions may eliminate potential liabilities if they: (1) send a notice of intent to audit for TSCA § 12(b) violations to EPA by August 2, 1999; and (2) identify and correct any such violations and report them to EPA by September 1. Alternatively, exporters that do not desire to conduct an audit but know of existing TSCA § 12(b) violations may identify and correct them by August 2. In either case, EPA will issue a NON and no further penalty will be imposed.

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