Companies planning to ship chemical-based products to the United States should have a basic understanding of the Toxic Substances Control Act (TSCA),[1] the key U.S. chemicals law. That law was substantially amended in June 2016.[2] While a foreign entity is not subject to TSCA, its products generally cannot enter the U.S. without TSCA compliance by its U.S. trading partner who imports the products. This article presents an overview of TSCA as amended from the perspective of an importer. It addresses the scope of TSCA; who must comply; import certification; Inventory requirements; significant new use rules; prioritization, evaluation, and risk management; testing requirements; reporting and recordkeeping requirements; protection of confidential information; new requirements on formaldehyde in composite wood products; and enforcement and penalties.

1. TSCA’s Scope

TSCA applies to chemical substances. It defines the term “chemical substance” in part as “any organic or inorganic substance of a particular molecular identity, including any combination of such substances occurring in whole or in part as a result of a chemical reaction or occurring in nature and any element or uncombined radical.”[3] Polymers are subject to TSCA, although some regulatory exemptions may apply. The term “chemical substance” excludes pesticides, which are regulated under the Federal Insecticide, Fungicide, and Rodenticide Act; food, drugs, cosmetics, and medical devices, which are regulated under the Federal Food, Drug, and Cosmetic Act and related statutes; and radioactive materials, which are regulated by the Nuclear Regulatory Commission.[4] Because these materials fall outside the definition of “chemical substance,” they are excluded from TSCA. They would only be subject to TSCA if they had multiple uses, at least one of which is not excluded from TSCA. For example, if a chemical has both drug and industrial uses, then the industrial use would be subject to TSCA.

TSCA can apply to mixtures of chemical substances; to individual chemical substances in mixtures; and to mixtures and individual chemical substances in articles. An “article” is a manufactured item (such as an automobile) formed to a specific shape or design during manufacture whose end use functions depend in part on that shape and which does not react upon end use or, if it does so, the reaction product has no purpose separate from the article.[5]

2. Who Must Comply?

TSCA imposes most of its requirements on manufacturers of chemical substances. The term “manufacture” is defined to mean “to import into the United States …, produce, or manufacture.”[6] In other words, an importer is considered to be a manufacturer under TSCA and is subject to essentially all requirements that apply to a domestic producer of chemical substances. Processors and distributors of chemical substances in the U.S. also have some compliance obligations.

Several different U.S. entities may qualify as an importer. The Environmental Protection Agency (EPA), which implements TSCA, defines “importer” to include the person primarily liable for the payment of any duties on the merchandise or an authorized agent; the consignee; the importer of record; the actual owner (in some cases); and the transferee (in some cases).[7] The term can also include the “principal importer,” i.e., “the first importer who, knowing that a new chemical substance will be imported rather than manufactured domestically, specifies the identity of the chemical substance and the total amount to be imported.”[8] This may be the customer for whom the importer imported the chemical substance.

3. Import Certification

U.S. Customs & Border Protection (CBP), part of the Department of Homeland Security, is directed to refuse entry into the customs territory of the U.S. of any chemical substance, mixture, or article offered for entry if it fails to comply with any rule in effect under TSCA.[9] Every shipment of chemical substances sent to the United States is subject to an import certification requirement. The importer must submit a certification to CBP attesting that all chemicals in the shipment are either in compliance with TSCA (the affirmative certification) or that all chemicals in the shipment are not subject to TSCA (the negative certification).[10] Typically, the customs broker makes the certification on behalf of the importer.

The certification does not apply to chemical substances or mixtures in articles unless EPA has so provided in a rule.[11] As a result, imports of most articles are exempt from import certification requirements. However, as discussed below, EPA recently promulgated a rule requiring import certification for articles containing composite wood made with a formaldehyde-based resin, beginning in 2018.[12]

The import certification focuses on compliance with a limited number of EPA requirements under TSCA: Inventory requirements under sections 5 and 8(b); significant new use rules under section 5; and the formaldehyde in composite wood products requirements under Title VI.[13] Each of these requirements is discussed below.

CBP has proposed amendments to its TSCA import certification regulations.[14] Among other things, the amendments would delete the option for blanket certifications and would allow reporting via the Automated Commercial Environment (ACE) system currently being used for other forms of CBP reporting.

4. Inventory Requirements

a. Basic Requirement

An importer must ensure that the chemical substances it imports are on the TSCA Inventory or, if not on the Inventory, are subject to an exemption. The TSCA Inventory lists approximately 84,000 “existing” chemical substances, by Chemical Abstract Service (CAS) number. “New” chemical substances are defined as those not on the TSCA Inventory.[15]

Most chemical substances are on the public Inventory, but some are on the confidential portion of the Inventory, to which access is limited. EPA makes the public Inventory and coded listings on the confidential Inventory available.[16]

It can be difficult to determine whether a chemical substance that does not appear on the public Inventory is on the confidential Inventory or is instead a new chemical substance. EPA has a mechanism by which a prospective importer may inquire, but it is data-intensive.[17]

b. Premanufacture Notification of New Chemical Substances

New chemical substances may be added to the Inventory after undergoing EPA’s premanufacture notification and review process.

Specifically, if a chemical substance to be imported is not yet on the TSCA Inventory and is not subject to an exemption, the importer must submit a premanufacture notice (PMN) to EPA at least 90 days before importing the chemical for non-exempt commercial purposes. EPA will hold the principal importer responsible for compliance with this requirement. If there is no principal importer, EPA will designate which entity otherwise qualifying as an importer is responsible for the PMN submission.[18]

The PMN form requires submission of existing information about the chemical substance.[19] Unlike in many jurisdictions, TSCA does not mandate that specific test data be submitted with the notice, such that the test data must be generated if not already available to the submitter. In the absence of test data, EPA will review the PMN using models and conservative assumptions to extrapolate data that is available on structurally analogous chemicals.

Currently, there is a $2,500 fee for submission of a PMN for chemicals other than intermediates; for intermediates, the fee is $1,000. There are reduced fees for small businesses.[20] Section 26(b) was amended to remove the ceilings on those fees. They are expected to increase in 2017, once EPA amends its regulation on fees.

c. Confidential Chemical Identities

If as part of a PMN the submitter asks EPA to keep the identity of a new chemical substance confidential, then special steps must be taken to ensure that confidentiality. The recent TSCA amendments provide that a claim for protection from disclosure of a specific chemical identity must include a “structurally descriptive generic name” and be substantiated.[21] EPA already has regulations meeting some those requirements.[22]

d. Exemptions

Some new chemical substances may be exempt from PMN requirements under certain conditions. For example, a new chemical substance imported as part of an article is exempt.[23] (Note that this exemption does not cover chemical substances intended to be removed from containers which are articles.) In addition, there are exemptions for a chemical substance that is an impurity (meaning that it is unintentionally present); a byproduct (meaning it was produced without separate commercial intent), but only for strictly limited uses); or imported solely for export.[24] New chemical substances may be imported for research and development purposes, if the importer meets certain administrative requirements.[25]

Some polymers may be eligible for a limited polymer exemption. EPA specifies criteria for what will qualify a polymer for the exemption and what will disqualify it. The exemption involves recordkeeping, certification, and reporting requirements. This exemption is self-implementing, meaning that the prospective importer or domestic manufacturer is not required to submit an application to EPA for its review.[26]

New chemical substances to be imported or domestically manufactured in amounts of 10,000 kg/year or less may be approved through submission of a low volume exemption application.[27]

e. EPA’s Assessment of PMNs

During the PMN review period, EPA may determine that a PMN substance presents an unreasonable risk under the conditions of use, in which case it will proceed to rulemaking to restrict or ban the substance. Alternatively, EPA may decide that the PMN substance may present an unreasonable risk under the conditions of use, or that it meets certain other criteria, in which case EPA will issue an order or consent order banning or restricting the substance, or requiring the PMN submitter to conduct testing. Finally, EPA may determine that a PMN substance is not likely to present an unreasonable risk under the conditions of use, in which case the PMN submitter may commence non-exempt manufacture or import of the substance.[28] In each case, EPA will post a summary of its determination on its website, subject to confidentiality claims.

The PMN review period is generally 90 days. If during that period EPA determines that the PMN substance is not likely to cause an unreasonable risk, EPA will so notify the PMN submitter, who can then proceed to commence manufacture or import without waiting for the 90-day period to expire.[29] Alternatively, EPA may identify a concern, which typically results in a request to the submitter to agree to suspend the review period to facilitate further review. If the PMN submitter does not agree, EPA may extend the PMN review period for up to an additional 90 days.[30] If the submitter is unable to resolve EPA’s concern, EPA will likely issue an order imposing restrictions on the chemical.[31]

Once a PMN submitter begins manufacture or import after the end of the PMN review period, it must submit to EPA a notice of commencement of manufacture or import within 30 days of commencement.[32] This will cause EPA to add the PMN substance to the TSCA Inventory.

5. Significant New Use Rules

Following the end of the PMN review period, EPA may decide to promulgate a significant new use rule (SNUR) for the PMN substance. EPA may also adopt a SNUR for an existing chemical substance that did not go through the PMN review process.

A SNUR will apply to any importer, domestic manufacturer, or processor of the SNUR substance. At least 90 days before beginning to engage in the significant new use described in the SNUR, an affected person must submit a significant new use notice (SNUN) to EPA for review. The SNUN and SNUN review process are essentially identical to the PMN and PMN review process. As with a PMN, during the SNUN review period, EPA may determine that the SNUR substance presents an unreasonable risk under the conditions of use, in which case it will proceed to rulemaking to restrict or ban the substance. Alternatively, EPA may decide that the SNUR substance may present an unreasonable risk under the conditions of use, or that it meets certain other criteria, in which case EPA will issue an order or consent order banning or restricting the substance, or requiring the SNUN submitter to conduct testing. Finally, EPA may determine that a SNUR substance is not likely to present an unreasonable risk under the conditions of use, in which case the PMN submitter may commence non-exempt manufacture or import of the substance. In each case, EPA will post a summary of its determination on its website, subject to confidentiality claims.

In most cases, the importation of a SNUR substance as part of an article will be exempt from the SNUR.[33] In selected cases, however, EPA may decide to apply a SNUR to a SNUR chemical imported as part of an article.[34] Before doing so, due to a new provision of TSCA, EPA must determine that application of the SNUR to articles is necessary to protect against exposure the SNUR substance in articles.[35]

6. Prioritization, Risk Evaluation, and Risk Management

As amended, TSCA requires EPA to identify chemical substances that are high priorities for risk evaluations; evaluate the health and environmental risks of those substances; and decide, without regard to cost or other non-risk factors, whether a high-priority substance presents an unreasonable risk.[36] Importers and domestic manufacturers may also request that risk evaluations will be conducted for chemical substances that have not been identified as high priority,[37] subject to the requirement that they pay a fee to cover either 50% or 100% of the cost of the risk evaluation.[38] EPA will conduct a risk evaluation,[39] including notice and comment for draft evaluation report, and may promulgate a rule regulating the chemical substance.[40]

While EPA has discretion to select the chemical substances that it will assess, it must identify an initial ten substances by December 2016 from the list of 90 chemical substances and chemical categories on the 2014 TSCA Work Plan substances list.[41] At least 50% of the additional chemical substances it selects for evaluation by December 2019 must also be from that list.[42]

The risk evaluation will explain EPA’s determination that a chemical substance either presents an unreasonable risk to health or the environment under the conditions of use, or that it does not present such a risk.[43] If EPA finds that the chemical substance does present an unreasonable risk, it must adopt a rule mandating risk management, possibly including a ban.[44]

7. Testing Requirements

Unlike some other jurisdictions, TSCA does not include base set testing requirements. A recent amendment to EPA’s authority to require testing under section 4 provides that information required under that authority “shall not be required for the purposes of establishing or implementing a minimum information requirement of broader applicability.”[45]

Nevertheless, EPA can require manufacturers (including importers) and processors to conduct testing. Formerly, EPA could only do so through test rules or testing consent orders. Under the TSCA amendments, it may also do so by order.[46] This new order authority is expected to increase the amount of testing that EPA requires, since it is much more efficient than rulemaking.

If an importer is subject to a test rule or a test order, it may request a conditional exemption from the testing requirement, so long as others also subject to that testing requirement do agree to conduct the testing.[47] EPA’s grant of an exemption request may trigger a requirement to pay equitable reimbursement to those who conduct the testing.[48] EPA has rules governing data reimbursement,[49] but historically, parties have worked out financial arrangements among themselves.

8. Reporting and Recordkeeping Requirements

Under section 8, importers and others may be required to report information to EPA or to keep certain records.

Under section 8(a), every four years, importers and domestic manufacturers must report information on the quantities, uses, and other information about chemical substances that they import or manufacture above the applicable threshold, either 25,000 pounds/year or 2,500 pounds/year.[50] This Chemical Data Reporting rule (CDR) does not apply to polymers or to naturally-occurring chemicals, but most other chemical substances are covered. The most recent reporting deadline is October 31, 2016, covering 2012-2015. The next CDR report will be due September 30, 2020, covering 2016-2019. Information to be reported includes a signed and dated certification statement from the submitter company; company and plant site addresses and parent company name and Dun and Bradstreet DUNS number; and chemical-specific information.

Under section 8(b) as amended, importers and others must identify to EPA those chemicals that they imported or domestically manufactured during the ten years prior to enactment of the 2016 amendments.[51] EPA must adopt a rule implementing this requirement by June 2017, and reports will be due six months later. EPA will use the information to prepare an “active substances” list. Thereafter, prior to importing, domestically manufacturing, or processing a chemical substance not on that list, a person must notify EPA that it should add the substance to the list.

Under section 8(c), importers must maintain records of significant adverse reactions, both in health and environment. EPA has implementing regulations,[52] and may require submission of such records.

Importers may be required to list or submit health and safety studies for the chemical substances they import if those chemicals are subject to a rule adopted under section 8(d). EPA has implementing regulations,[53] but has not used this authority for several years.

Section 8(e) requires manufacturers (including importers) and others to report to EPA immediately any information that reasonably supports the conclusion that a chemical presents a substantial risk of injury to health or the environment, unless EPA is already aware of the information. EPA has implementing guidance.[54] This can create a reporting obligation for importers who also have access to such information submitted under REACH or other regulatory systems when EPA does not have access to the information.

Finally, an importer who subsequently exports chemical substances may also be subject to reporting obligations under section 12(b). EPA’s regulations limit reporting to the first export of certain listed chemicals to a particular country or the first export of other listed chemicals to a particular country in a calendar year.[55] The list of chemicals subject to export notification requirements at this time appears on EPA’s website.[56]

9. Protection of Confidential Information

The recent TSCA amendments substantially revised the requirements for protection of confidential business information in section 14. Claims made post-enactment must be substantiated,[57] and claims will last a maximum of ten years, subject to renewal.[58] Chemical identities claimed confidential must be accompanied by a structurally-descriptive generic name.[59] EPA will assign a “unique identifier” to information related to a confidential chemical identity.[60]

10. Formaldehyde in Composite Wood Products

In July 2016, EPA adopted formaldehyde standards for composite wood products under section 601 of TSCA.[61] These standards set formaldehyde emissions limits for composite wood products based on similar requirements of California’s Air Resources Board.[62] However, EPA’s standards go beyond the California requirements.

EPA’s standards apply to both composite wood products and finished goods (or component parts of finished goods) that contain any amount of composite wood products. There is no exemption for a de minimis amount of composite wood products in a finished good, other than with respect to the labeling requirement. Among other things, the EPA standards require importers to submit TSCA import certifications to CBP, beginning in 2018. Importers must ensure that their foreign suppliers meet the testing, certification, and labeling requirements of the standards. Importers may be required to recall or otherwise address non-complying products. For additional information, see the Beveridge & Diamond alert on the EPA standards.[63]

11. Enforcement and Penalties

EPA may bring an enforcement action against an importer or others for alleged civil violations of TSCA or EPA regulations. If contested, the enforcement action will be heard by an administrative law judge, subject to review by the EPA Environmental Appeals Board and then by a federal court of appeals.[64]

As amended, the maximum civil penalty under TSCA is $37,500 for each violation.[65] EPA considers that some violations, such as those under section 8(e), incur daily penalties. For PMN violations, EPA considers each day of importation of a non-exempt chemical not on the TSCA Inventory to be a separate violation. For PMN and some other TSCA violations, there is a five-year statute of limitations.[66] For section 8(e) violations, there is no statute of limitations, according to the Environmental Appeals Board.[67]

Criminal penalties may also be assessed for knowing or willful violations of TSCA or EPA regulations. Maximum criminal penalties are $50,000 per day and imprisonment for one year.[68]