Two important developments from the Environmental Protection Agency (EPA) are potentially significant to the retail industry, but may have escaped widespread attention in light of recent worldwide events. Somewhat unusually, both proposals are administered by EPA under TSCA, despite the fact that TSCA typically applies to chemical products, not manufactured articles.
Comment and compliance deadlines are rapidly approaching, meaning that potentially affected manufacturers and importers should consider action now.
The first of these developments involves proposed restrictions on imports of textiles and other articles with certain long chain PFAS coatings (or “LCPFAS,” as they are called in the rule). The proposed regulation is referred to as a “Significant New Use Rule” or “SNUR”. This is the first time that EPA has used its SNUR authority to regulate consumer articles since TSCA was significantly revised in 2016. This SNUR, which would require notification to EPA prior to importing any article coated with LCPFAS, is predicated on two conclusions: that the LCPFAS coatings may degrade into harmful substances, and that use of these coatings on imported articles is “new” (i.e., that import of these coated articles was not ongoing at the time the SNUR was proposed). While most LCPFAS have been phased out in domestic manufacture, the SNUR could cause significant disruption for importers of textiles, cookware, and outerwear from China and Southeast Asia where LCPFAS chemistries are still in widespread use. Comments on the SNUR are due April 17, 2020; it is unclear whether the current pandemic may affect this deadline or require additional time for businesses to query the supply chain overseas. More information on the SNUR can be found here.
The second development is a new notification requirement for importers of articles containing “high priority” substances. Under TSCA’s 2016 revisions, EPA may designate some chemicals “high priority substances” (“HPSs”) for purposes of risk evaluation. TSCA rules require that businesses that manufacture or import HPSs undergoing risk evaluation are responsible for paying the $1.35 MM fee associated with EPA-initiated risk evaluations. On December 30, 2019, EPA designated a list of 20 HPSs and identified a preliminary list of affected manufacturers and importers, available here. The new regulation also requires that all manufacturers and importers of these substances must self-identify and/or comment on the preliminary list by May 27, 2020. Importantly, EPA cast an extremely broad net in requiring self-identification as an “importer” – to include importers of articles containing the HPS, expanding the list of businesses that may be affected by the requirement.
In a late-breaking development, EPA announced on March 25, 2020, that in response to concerns expressed by numerous stakeholders, the Agency is exercising “enforcement discretion” to excuse importers of articles from the self-identification requirement. In addition, the EPA plans to initiate rulemaking shortly to make this relief permanent. Thus, importers of consumer articles do not need to comply with the self-identification requirement and will no longer be liable for a share of EPA’s risk evaluation fees.
These two regulatory initiatives by EPA this year may be a signal that we can expect more activity from EPA on the article front. RILA is creating a small HPS-related workgroup to inform comments and is considering requesting a deadline extension for the proposed SNUR. RILA and the team at Crowell & Moring are watching these changes carefully and we will alert you of any new developments. Please reach out to RILA with your concerns and for more information as we move forward.