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Apparel | Newsletter |
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Updates On Hazmat Training And Final Rule On Hazmat Loading, Unloading, And Storage |
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June 3, 2004 This newsletter provides important updates regarding the U.S. Department of Transportation ("DOT") hazardous materials ("Hazmat") training requirements and recently published final rule that clarifies certain Hazmat regulations. Penalty Assessments Against Forwarders, Brokers and Other Intermediaries For Non-Reporting of Violations Commencing July 1, 2004, new incident and discrepancy reporting requirements will go into effect. One very important new development is that, for the first time, freight forwarders, brokers and other intermediaries are going to be required to report violations discovered in their customers' shipments to the DOT. Therefore, if a shipper tenders a package to a forwarder or trucker that later turns out to be Hazmat, that forwarder or intermediary is required to report that incident to the DOT, or they will face a violation themselves. Previously this reporting requirement applied only to airlines. The penalties for failure to give immediate notification of a reportable hazardous materials incident is $3,000 per incident. Intentional disregard of this reporting requirement could result in criminal sanctions. December 22, 2003, Deadline Has Passed for Hazmat Training Requirements We believe that there are many companies that handle Hazmat materials that are not aware of certain deadlines in 2003 that have passed with regard to Hazmat training requirements. Specifically, under 49 CFR §172.800, a company that is required to register for Hazmat was required to file a Hazmat security plan by September 25, 2003, and was to have provided in-depth security training to its employees by December 22, 2003. Penalties can be issued for failure to meet these deadlines. During the week of April 12, 2004, the Coast Guard started issuing $10,000 fines to companies who had not filed a security plan. The security plan requirement and security training requirement applies to all modes of transport. Under Title 49 CFR Part 107, Subpart G (107.601-107.620), certain companies are required to register with DOT if they pack, ship, offer, inspect, accept or transport specific types and quantities of Hazmat under certain circumstances. Freight forwarders are covered by the registration regulation, because they act as intermediaries in the transportation of hazardous materials, even if they do not actually transport the Hazmat. For companies that are covered by the Hazmat regulations, the following type of training is required:
Penalties for Failure to Comply With Training Requirements Under the law, the failure to file the written Hazmat security form can result in the issuance of penalties. In addition, penalties can be issued for the failure to adequately train employees. Under 49 CFR §172.700, all employers must train and test every hazardous material employee within 90 days in the job. The failure to comply with these requirements can result in a maximum penalty of $32,500 per day per violation. Hazmat Requirements For Importers And Customs Brokers Under 49 CFR §171.12(a), an importer has the obligation to inform the shipper and forwarding agent of the Hazmat of the applicable Hazmat regulations that apply to the shipment into the United States. Failure to inform the foreign shipper and forwarder of the applicable regulations can result in a maximum penalty of $7,200. The commodities that are affected by the DOT Hazmat regulations include a broader range than most people would imagine, including such items as paint, perfume, aerosols, dry ice, batteries, cosmetics, safety equipment, medical and/or cleaning supplies. The list of commodities that are affected by the Hazmat regulations can be reviewed at hazmat.dot.gov. RSPA Issues Final Rule On Hazmat Loading, Unloading, And Storage The Research and Special Programs Administration (RSPA) of the U.S. Department of Transportation (DOT) issued a final rule, effective October 1, 2004, which clarifies the applicability of the Hazardous Materials Regulations (HMR), to specific functions and activities, including hazardous materials loading, unloading, and storage during transportation. This final rule was published in the Federal Register on October 30, 2003. Among the new definitions and provisions, the RSPA is defining a new term - "pre-transportation function" - which means a function performed by any person that is required to assure the safe transportation of a hazardous material in commerce. Any party that performs a pre-transportation function must perform it in accordance with HMR. Parties who perform pre-transportation functions could include shippers, carriers, freight forwarders, NVOCCs, and other entities. It is important that those who perform a pre-transportation function comply with the requirements of 49 CFR §171.1(b). This section provides examples of pre-transportation functions. Some of the examples mentioned are:
The final rule also defines what constitutes a "transportation" function. Under the final rule, transportation and commerce begins when a carrier takes physical possession of a hazardous material for the purpose of transporting it, and continues until delivery of the package to its consignee or destination, as evidenced by the shipping documentation under which the hazardous material is moving, such as shipping papers, bills of lading, freight orders, or similar documentation. Some of the examples of "transportation and commerce" are listed in Section 171.1, including the following:
The final rule also provides examples of what transportation activities are not subject to the HMR. Section 171.1(d) provides the following examples of activities to which the HMR do not apply:
Penalties for Failure To Comply With Hazmat Loading, Unloading and Storage Regulations Section 171.1(g) specifies the penalties for failure to comply with the HMR. These are assessed against persons who "knowingly" violate a requirement of the HMR. The specified civil penalty is not more than $32,500 and not less than $275 for each violation. When a violation is a continuing one, each day of the violation constitutes a separate offense. Most DOT penalties are for multiple violations - for example, a single box of undeclared dangerous goods (i.e., a case of aerosol cans), involves no less than five separate violations (failure to mark, label, classify, identify, and document, amongst others), which would result in up to $32,500 for each violation. In addition to the foregoing, the HMR indicates that criminal sanctions can be imposed. Specifically, a party who willfully violates the HMR may be fined under Title 18, United States Code, or imprisoned for not more than five years, or both. Examples of Hazmat penalties proposed by the DOT and FAA (broken down by commodity shipped) and criminal convictions can be viewed at www.dgtraining.com. If you have any questions on any of the issues raised in this newsletter, please contact Steve Spraitzar at (415) 288-0427 or via email at sss@tuttlelaw.com. Stephen Spraitzar is an attorney with the Law Offices of George R. Tuttle in San Francisco. The information in this article is general in nature, and is not intended to constitute legal advice or to create an attorney-client relationship with respect to any event or occurrence, and may not be considered as such. Copyright © 2005 by Tuttle Law Offices. All rights reserved. Information has been obtained from sources believed to be reliable. However, because of the possibility of human or mechanical error by our offices or by others, we do not guarantee the accuracy, adequacy, or completeness of any information and are not responsible for any errors, omissions, or for the results obtained from the use of such information.
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