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New Regs Announced for Securing High-Risk Number 586 April 9, 2007 Client Alert Latham & Watkins Environment, Land & Resources Department Department of Homeland Security Announces New Regulations for Securing High-Risk Chemical Facilities Summary effective 60 days after publication in the Federal Register, the Department The Department of Homeland Security has sought additional comment within plans to impose new requirements on 30 days on one key component of the chemical facilities that possess listed regulations. chemicals above specified quantities, and in many cases will require facilities What Facilities Are Affected? to prepare vulnerability assessments, develop security plans, and implement Under these regulations, the Department and install a suite of security measures. will screen tens of thousands of These requirements could begin to take “chemical facilities” for vulnerability We recommend effect for certain facilities as early as ” to and potential consequences of a June 2007. that all companies terrorist attack, and will regulate that possess or those it determines to be “high-risk.” otherwise handle Background “Chemical facility” is defined broadly as “any establishment that possesses or chemicals review In the four and a half years since the plans to possess, at any point in time, the regulations.“ terrorist attacks of September 11, 2001, a quantity of a chemical substance Congress has debated, but until recently determined by the Secretary to be failed to pass, legislation regulating the potentially dangerous or that meets security of chemical facilities in the US. other risk-related criteria identified On October 4, 2006, the Department by the Department.” A “high-risk” of Homeland Security Appropriations facility is one which, “in the discretion Act of 2007 (the Act) was signed into of the Secretary of Homeland Security, law. Section 550 of the Act requires the presents a high risk of significant Department of Homeland Security (the adverse consequences for human life or Department) to promulgate interim final health, national security and/or critical regulations for the security of “high- economic assets if subjected to terrorist risk” chemical facilities in the United attack, compromise, infiltration, or States. While Congress is still debating exploitation.” The regulations, therefore, possible changes to the program, the can apply not only to facilities that Department recently issued the interim manufacture or process potentially final regulations required by the Act.1 dangerous chemicals, but also to those Although these regulations will be that store or use potentially dangerous chemicals. Latham & Watkins operates as a limited liability partnership worldwide with an affiliate in the United Kingdom and Italy, where the practice is conducted through an affiliated multinational partnership. Under New York’s Code of Professional Responsibility, portions of this communication contain attorney advertising. Prior results do not guarantee a similar outcome. Results depend upon a variety of factors unique to each representation. Please direct all inquiries regarding our conduct under New York’s Disciplinary Rules to Latham & Watkins LLP, 885 Third Avenue, New York, NY 10022-4834, Phone: +1.212.906.1200. © Copyright 2007 Latham & Watkins. All Rights Reserved. Latham & Watkins | Client Alert Key Provisions of the • The Department will review and Regulations approve or disapprove all required submissions but also will conduct site inspections to ensure that security In brief, under the regulations: measures are in fact in place.3 • Facilities possessing threshold • Under current law, a facility that fails quantities of any of 344 “DHS to take the steps required by the Chemicals of Interest” will be Department can be assessed a civil required to complete an electronic penalty of up to $25,000 per day of questionnaire, known as a “Top- non-compliance, and ordered to cease Screen.” In addition to general operations, or both. Such penalties information regarding the location can be appealed, first within the and ownership of facilities, and Department through an administrative the chemicals they possess, this process, and then if necessary in questionnaire will seek information federal court. on potential for loss of life (or life- • Security information submitted to the changing injuries) or loss of the Department under the program will ability to execute critical defense be protected as “Chemical-terrorism or governance missions.2 This Vulnerability Information” and will be information is intended to allow the subject to strict controls. Department to determine the potential for and consequences of a terrorist As noted above, the Department is attack, and to assess the possible risks soliciting further comment on one if dangerous chemicals are stolen. The key element of this program – the Department will use the Top-Screen, “threshold” for determining which along with any other information facilities must complete the initial the Department deems relevant, to Top-Screen electronic screening determine whether a facility is “high- questionnaire. Attached to this Alert risk.” is the list of chemicals and quantities • Facilities determined to be “high- proposed by the Department for this risk” must complete Security “threshold.” Comments are due 30 days Vulnerability Assessments (SVAs) and after the publication of the regulations develop and implement Site Security in the Federal Register. Plans (SSPs), which must include measures that satisfy risk-based What the Regulations Mean “performance standards” established by the Department. to Your Business • The Department’s performance standards address a range of issues, As is apparent, this new program can including perimeter security, access impose potentially significant new control, employee and contractor requirements on a broad range of background checks, insider sabotage, businesses. We recommend that all cyber security and emergency companies that possess or otherwise response planning. The performance handle chemicals review the regulations. standards ultimately will require that You may also wish to comment on the a facility select measures to “deter, proposed threshold chemicals and detect and delay” a potential terrorist quantities. attack, creating sufficient time “to allow appropriate response” between detection of an attack and the point at which the attack becomes successful. 2 Number 586 | April 9, 2007 Latham & Watkins | Client Alert Regulatory Activity Deadlines Matthew C. Brewer is an associate in the Washington, D.C. office of Latham • Publication of regulations in the & Watkins where he is a member of Federal Register – expected April 9, the Environment, Land & Resources 2007 Department, and works primarily on • Comments on proposed “Screening chemical regulatory and litigation Threshold Quantities” due – 30 days matters. after publication (May 9, 2007) Endnotes • Effective date of the regulations – 60 1 The interim final regulations are available on days after publication (June 8, 2007) the Department’s Web site, at: http://www. • Top-Screen Questionnaire due – 60 dhs.gov/xprevprot/laws/gc_1166796969417. days after effective date (August 7, shtm. 2007) 2 The contents of the “Top-Screen” About the Authors questionnaire are described briefly in Appendix A to the proposed interim regulations Federal Register notice (71 Fed. Philip J. Perry is a Litigation Partner in Reg. 78276, 78302 (Dec. 28, 2006), which is the Washington, D.C. office of Latham available online at: http://a257.g.akamaitech. & Watkins, and chairs the firm’s Public net/7/257/2422/01jan20061800/edocket. Policy Group. He previously served access.gpo.gov/2006/pdf/06-9903.pdf. as the General Counsel of the US Department of Homeland Security, 3 While the statute currently allows a high-risk where he played a central role in facility to “select” a suite of security measures developing the legislation that created to implement – so long as the Department’s this new chemical security authority and performance standards are ultimately the Department’s proposed regulations. satisfied – Congress is considering revising Mr. Perry also previously served as the this provision to permit the Department to General Counsel of the White House mandate specific preferred measures at each Office of Management and Budget, “high-risk” facility. and as the Acting Associate Attorney General of the Department of Justice. William K. Rawson is a Partner in the Washington, D.C. office of Latham & Watkins and chairs the firm’s Environment, Land & Resources Department office. Mr. Rawson has represented companies and industry groups in petitions, rulemaking proceedings and litigations related to a wide variety of federal chemical regulatory schemes, including the Toxic Substances Control Act (TSCA), Emergency Planning and Community Right-to-Know Act (EPCRA), Clean Air Act (CAA), Resource Conservation and Recovery Act (RCRA), Occupational Safety and Health Act (OSHA), and Federal Hazardous Substances Act (FHSA). 3 Number 586 | April 9, 2007 Latham & Watkins | Client Alert Office locations: Client Alert is published by Latham & Watkins as a news reporting service to clients and other friends. The information contained in this publication should not be construed Barcelona Brussels as legal advice. Should further analysis or explanation of the subject matter be required, Chicago please contact the attorneys listed below or the attorney whom you normally consult. Frankfurt A complete list of our Client Alerts can be found on our Web site at www.lw.com. Hamburg
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