US DOT/PHMSA makes some interesting rules even when they do not publish in the Federal Register. Sometimes they save some of their best decisions for active cases or their internal operating procedures. Anyone that has ever dealt with PHMSA knows that internal policy issues are a moving target depending on the day, the person and the pressure from Congress. Most of the "policy makers" make certain decisions that can not be justified. However in the context of active cases where the Agency wants to impose significant fines, there is a different story.
As an attorney that handles these cases, I have found out first hand some policy changes that PHMSA does not like to promote or even publish. PHMSA understood in the context of active litigation that the some of the policies were not justified or supportable in an actual court of law. The USDOT/PHMSA attorneys are the ones that have to try and justify these concepts and many times have to drop them because in reality they make no sense.
1. Imposition of Fines and Penalties against Foreign Brokers. For years, PHMSA allowed anyone to obtain EX numbers for the commercial transportation of explosives. There was no requirement for a manufacturer or even an importer to have the EX numbers. Many of the early EX numbers were assigned to trade groups like the APA or some other entity. This changed in 2011 when PHMSA made the unilateral decision to only allow manufacturers to apply for and obtain EX numbers. This means that many of the EX numbers issued to brokers or others were still valid and useable.
The DOT has attempted to impose significant sanctions (in one case over $350,000) against companies that may have shipped items to customers. There may have been issues with the EX number and the product, so the DOT tried to impose these sanctions on the broker in China. The broker only supplies the documentation from the manufacturer and has the export license in China to move product out of the country to the customers in the US. The broker does not control the documents from the manufacturer nor do they meet the definition of being involved in transportation as set forth in 49 CFR sec. 171.1(b) or (c). It is clear that while the officials in the DOT/PHMSA may not understand how commerce is conducted, the attorneys are getting educated on this process. The USDOT/PHMSA attorneys have dropped cases against 3 different brokers because they did not meet the regulations and were not involved in pre transportation functions or movement of product issues as defined in the regulations.
2. Issues with designation of "color" in devices. Much has been made by DOT/PHMSA inspectors about aerial shells or devices with descriptions that include colors not in the official approval. Many DOT/PHMSA investigators automatically have determined that a violation exists because the official application for a device has the color "gold" and the description on the shipping documents may refer to "yellow" or even "green". This was an automatic violation that DOT/PHMSA inspectors would prevent merchandise from entering the marketplace and being held in the warehouse.
In several cases with the DOT/PHMSA when Notice of Probable Violations were issued, the DOT/PHMSA position has changed. No longer will issues of "color" solely be the basis for a violation or the banishment of the product from commercial transportation. One investigator in the Midwest refuses to recognize the directive from not only his own attorneys, but also from the technical personnel and still has blocked the shipment of finale chains from a Chinese manufacturer to customers because of the issue of "color" [the approval documents had a wide range of color options, but did not include specific colors like "purple" or "aqua" eventhough red, blue, yellow, orange, white, gold, silver, violet and some other colors were approved.-I think that this investigator better go back to elementary school and try and understand the "color wheel" on how primary and secondary colors work-ED.]
3. Chained Finale Shells- For quite some time DOT/PHMSA investigators have singled out finale chains of shells that are greater in number than the approval documents as a violation. If a manufacturer has obtained an approval for 10 chained together shells and they ship 24 in a chain, uniformed and overzealous DOT/PHMSA investigators would immediately seize on that issue and claim that the product was not approved for shipment since it was a "new explosive" and did not have a specific EX number for the chain of 24. As ridiculous as this sounds, the investigators believed that the sheer number of shells chained together was sufficient to create a whole separate "hazard" that needed a new EX number. The training that these investigators received before being foist upon the fireworks and explosives industry was ludicrous. They don't even know their own regulations.
The regulations for a "new explosive" is found at 49 CFR sec. 173.56. They don't understand that for a "new explosive" the change must be "so as to alter any of the properties of the explosive..." Furthermore, there must be "...significant differences in the hazard characteristics from the explosive previously approved." 49 CFR sec. 173.56(a)(2). These criteria are not met when just changing a finale chain from 10 to 24 of 3" shells. Furthermore APA 87-1, sec. 4.4 governs combination devices and allows this type of device to exist.
This change in policy has corrected many, many "Exit Briefings" issued by uninformed investigators that saw a number of finale shells approved and then saw a different number of shells on the packing lists.
These are significant and important changes within the DOT/PHMSA inspection process that all importers must consider before allowing the DOT/PHMSA investigators to interrupt your inventory and sales. This product has cost you a great deal of money just to get it to your warehouse and you should not let an investigator that has a minimal amount of understanding of the entire process prevent you from your distribution.
If you have questions, even questions during a DOT/PHMSA inspection, you have the right and ability to contact an attorney and seek legal advice. We are available to work with you and even attend inspections. Please call us if you need help. phone: 800-481-0900. Ask for John and you will get either John Brooke of John Stevens.
Thank you.
John H. Brooke
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