[Federal Register Volume 64, Number 76 (Wednesday, April 21, 1999)]
[Rules and Regulations]
[Pages 19443-19450]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-9983]


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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 13


Federal Aviation Administration Policy on Enforcement of the 
Hazardous Materials Regulations: Penalty Guidelines

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: General statement of policy.

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SUMMARY: This document states that FAA policy on determining the 
sanction amounts in FAA enforcement actions addressing violations of 
the Department of Transportation Hazardous Material Regulations (HMR). 
This policy statement provides guidance for agency personnel in the 
exercise of the FAA's prosecutorial discretion in enforcement cases 
concerning transportation of hazardous materials by air. The guidance 
should aid in analysis of the facts and circumstances of each case so 
as to arrive at an appropriate sanction in light of the statutorily 
defined penalty considerations. The analytical framework should also 
promote a relative consistency in determining civil penalties for 
violations of the HMR.

EFFECTIVE DATE: April 14, 1999.

FOR FURTHER INFORMATION CONTACT:
Bill Wilkening, Office of Civil Aviation Security, Dangerous Goods and 
Cargo Security Division, telephone: (202) 267-9864, facsimile (202) 
267-5760, email: Bill.W[email protected], mailing address: ACO-800, 800 
Independence Avenue, S.W., Washington, D.C. 20591, or Allan H. 
Horowitz, Enforcement Division, Office of the Chief Counsel, telephone 
(202) 267-3137, facsimile (202) 267-5106, email: 
Allan.H[email protected], mailing address: AGC-300, 800 Independence 
Avenue, S.W., Washington, D.C. 20591.

SUPPLEMENTARY INFORMATION:

Background

    Congress determined that the unregulated transportation of 
hazardous materials constitutes a threat to public safety in all forms 
of transportation. Congress addressed that threat in 1974 by enacting 
the Hazardous Materials Transportation Act (HMTA). By 1990, Congress 
determined that effective enforcement of the HMTA required more severe 
action, and enacted the Hazardous Materials Transportation Uniform 
Safety Act of 1990, Public Law No. 101-615, 1990 U.S. Code Congress. & 
Admin. News 104 Stat. 4605. The primary effect of this 1990 revision of 
the HMTA was to raise the maximum civil penalty for violation of any 
regulation enacted under the HMTA to $25,000, and, for the first time, 
to require a $250 minimum penalty for any such violation. The HMTA was 
recodified in 1994 and is now referred to as the ``Federal hazardous 
material transportation law,'' 1994 U.S. Code Congress. & Admin. News 
108 Stat. 759, codified at 49 U.S.C. 5101-5127. In the 1994 
recodification, Congress specifically stated that the recodification 
created no substantive change to the earlier form of the statute.
    The Federal Civil Penalties Inflation Adjustment Act of 1990, 28 
U.S.C. 2461 (note), as amended by the Debt Collection Improvement Act 
of 1996, Public Law 104-134, April 26, 1996, provides a mechanism for 
adjustments for monetary civil penalties for inflation in order to 
maintain the deterrent effect of monetary civil penalties and promote 
compliance with the law. Under the statute, the new civil penalty 
maximums cannot be applied unless they are implemented by regulation. 
On December 20, 1996, the FAA published a final rule (61 FR 6744), 
implementing the statute for each civil penalty subject to the FAA's 
jurisdiction. On January 21, 1997, the FAA published a correction to 
the final rule (62 FR 4134). The final rule is codified at 14 CFR Part 
13, Subpart H. Pursuant to 14 CFR 13.305(d), the maximum civil penalty 
that may be assessed for a violation of the Federal hazardous material 
law or a hazardous material regulation is now $27,500.
    Congress assigned the responsibility for the enforcement of the 
Federal hazardous material transportation law to the Secretary of 
Transportation. Within the Department of Transportation, the Research 
and Special Programs Administration (RSPA) adopts the Hazardous 
Materials Regulations (HMR), 49 CFR parts 171 through 178, which govern 
the transportation of hazardous materials (Hazmat). Although RSPA has 
some enforcement responsibilities, the responsibility for enforcing the 
HMR with respect to civil aviation is delegated by the Secretary of 
Transportation to the FAA. 49 CFR 1.47(k).
    The HMR set forth regulations for the transportation of Hazmat. A 
knowing violation of the statute or of the HMR can support the 
assessment of a civil

[[Page 19444]]

penalty between $250 and $27,500. A person acts knowingly when the 
person has actual knowledge of the facts giving rise to the violation; 
or a reasonable person acting in the circumstances and exercising 
reasonable care would have that knowledge. 49 U.S.C. 5123(a)(1)(A). The 
civil penalties authorized under the statute apply to EACH violation of 
any regulation set forth in the HMR. Moreover, under the statute, each 
continuing violation of the HMR can constitute a separate violation for 
each day a violation continues. In section 5124 of the statute, 
Congress prescribed criminal penalties for a willful violation of the 
Federal hazardous material transportation law or the HMR; willful 
violations require evidence of both knowledge of the laws and 
regulations and intent to violate them.
    Part 13 of the Federal Aviation Regulations--Investigative and 
Enforcement Procedures (14 CFR Part 13) governs the procedures 
applicable to enforcement of the HMR by the FAA. Hazmat violations 
occurring on or after August 2, 1990, may be dismissed by an 
administrative law judge (ALJ) if a Notice of Proposed Civil Penalty 
has not been issued within 2 years of the violation, unless good cause 
for delay has been shown. 14 CFR 13.208(d).

Consideration of Statutory Criteria

    In determining the sanction to be assessed, penalty criteria set 
forth in 49 U.S.C. 5123 must be considered. These criteria are the 
nature, circumstances, extent, and gravity of the violation, the degree 
of culpability of the violator, any history of past violations, the 
ability to pay, any effect on the ability to continue to do business, 
and other matters as justice requires. Some of these considerations 
already are factored to some extent into the categories in the 
Hazardous Material Sanction Guidance Matrix. The statutory factors are 
further considered under the weighting analysis that is performed to 
indicate the amount of civil penalty within the appropriate range, 
i.e., at the minimum, moderate, or maximum portion of the sanction 
range. To comply with the underlying purposes of the Federal hazardous 
material transportation law and HMR, a sanction should be imposed that 
is sufficiently deterrent but not excessive.
    The Hazardous Materials Sanction Guidance is designed to promote 
better consistency so that similar penalties are imposed in similar 
cases. The Matrix ranges are intended to reflect the nature, 
circumstances, extent, and gravity of the case as compared with other 
types of cases. Each case, however, must be evaluated on its own facts. 
A sanction may differ from the Matrix ranges when the facts and 
circumstances of a case support either a greater or lesser penalty. 
When a special agent believes that a penalty should exceed the Matrix 
ranges, the agent should consult with legal counsel before further 
processing of the Enforcement Investigative Report (EIR). This 
consultation is not necessary in the case of a recommended penalty that 
is less than that provided in the Matrix. In either situation, the 
basis for the decision to go outside the ranges should be explained in 
detail.
    Violations of Part 175 of the HMR, which establish particular 
requirements for air carriers and other aircraft operators, are 
contained in a separate matrix. However, such operators often offer 
hazardous materials for air transportation, as well as accept and 
transport them. For this reason, such operators may be liable for 
violations both as a business entity within the Hazardous Materials 
Sanction Guidance Matrix, as well as specific air carrier violations.

Use of the Sanction Guidance

    This guidance provides agency personnel with a systematic way to 
evaluate a case and arrive at an appropriate penalty, considering all 
the relevant statutory criteria including any mitigating and 
aggravating circumstances. Statutory considerations have been factored 
into the various ranges within the Sanction Guidance Matrix. 
Determination of where a sanction lies within these ranges is aided by 
a series of weighting questions that probe the various aggravating and 
mitigating factors that may exist in a case.
    First, the weighting analysis is performed. Agency personnel 
respond to a series of questions to determine the aggregate weight of 
the case. The aggregate weight of the case helps determine the sanction 
amount of each violation group within the established ranges of the 
Matrix.
    It is important to note that determination of where the sanction 
lies within the Matrix is not the result of a mathematical computation. 
Evaluation of the case is based on the totality of the facts and 
circumstances. Generally, if the answer to a particular question 
represents a more significant aspect of a case, greater consideration 
should be given to that answer. For example, violations involving an 
extremely dangerous substance, even in minute quantities, might warrant 
a penalty at the maximum end of the range or even a penalty exceeding 
the Matrix ranges.
    Under the Sanction Guidance Matrix, agency personnel determine the 
category of violator the person falls within (e.g., business entity 
that regularly offers, accepts, or transports Hazmat) and the offense 
category (e.g., undeclared shipment within Hazmat quantity 
limitations). The sanction ranges under the various violator categories 
take into account the relative culpability of the violator. Similarly, 
the offense categories address the nature, circumstances, and gravity 
of the particular offense. After determining the appropriate categories 
and intersecting box of the Matrix, agency personnel then determine 
which subcategories of offenses (e.g., shipping papers) are alleged to 
have been violated. Based on the weighting analysis performed in 
Section I, an appropriate penalty is assigned for each of the 
applicable violation groups. The penalty amount for each relevant 
violation group is added together to reach the recommended sanction.
    Under Section III of the Guidance, the special agent then considers 
other relevant factors, including evidence of corrective action. A 
recommended sanction may be reduced prior to the issuance of a Notice 
of Proposed Civil Penalty when there is adequate reliable information 
concerning the corrective actions taken by a respondent. Corrective 
actions that justify reduction of the recommended penalty must exceed 
the minimum legal requirements. The special agent also attempts to 
provide information concerning the alleged violator's size, financial 
condition, and ability to pay a recommended sanction.
    When an EIR is forwarded to legal counsel for enforcement action, 
counsel with give appropriate consideration to the recommended 
sanction. FAA legal counsel will also review the factors, analysis, and 
determinations under the Hazardous Materials Sanction Guidance. Any 
basis for deviating from the recommend sanction is ordinarily explained 
to, and discussed with, the investigating special agent. Final 
determination of the sanction amount proposed in the Notice of Proposed 
Civil Penalty is ordinarily a product of joint decisonmaking and 
approval of the investigating agent and the legal office.

Federal Aviation Administration Hazardous Materials Sanction 
Guidance

    This Sanction Guidance is divided into three sections:

I. Case Analysis,
II. Utilization of the Sanction Guidance Matrix (Matrix), and
III. Consideration of other Statutory Factors.

    The Sanction Guidance Matrix is contained in Figure 1 and the 
Risk Categories are contained in Figure 2.

[[Page 19445]]

I. Case Analysis (Evaluation of Statutory Assessment Factors)

    This section contains a series of questions designed to assist 
special agents and attorneys in evaluating a particular case. The 
question review factors involving the nature, circumstances, extent and 
gravity of the violation, the violator's degree of culpability, and the 
violator's history of prior violations. Some of these factors are 
already considered to some extent within the various categories of the 
Sanction Guidance Matrix. The questions in this section provide 
additional consideration of the statutory factors and examine the 
existence of aggravating and mitigating factors in a case.
    The agent/attorney answers each question in Section I and 
determines if a relative weight of minimum, moderate, or maximum should 
be assigned based on the response to the question. With the exception 
of Question A.1., not all questions will apply to a given fact 
situation. Question A.1., which addresses the nature of the hazardous 
material(s) involved, is the only question that always receives a 
``yes'' answer to one of its subquestions and is considered in every 
case. The aggravating or mitigating factors addressed in the questions 
only apply to the case when the question receives a ``yes'' response. 
Questions receiving a ``no'' response do not affect the weighting of 
the case and are not considered. For example, if the violation resulted 
in harm to persons or property, that may be an aggravating factor in 
the case. However, the fact that the violation did not result in injury 
or damage, is not a mitigating factor and should not result in penalty 
mitigation. In many instances, the answers to most or all of the 
questions will be ``no'' and the only relevant weighting factor in this 
section will be the risk category of the material identified in 
Question A.1.
    In determining the final aggregate weight of the case, the 
responses to each of the questions do not have to be equally 
considered. Determination of whether the overall case should have a 
minimum, moderate, or maximum weight cannot be determined with 
mathematical certainty. Generally, if the answer to a question 
demonstrates that the factor at issue represents a more significant 
aspect of the case, greater consideration is given to that factor. The 
final aggregate weight is based on the totality of the facts and 
circumstances of the case. Once determined, the final aggregate weight 
is then utilized to arrive at the recommended sanction for each 
applicable violation group on the Sanction Guidance Matrix (Fig. 1).

A. The Nature, Circumstances, Extent, and Gravity of the Violation

(Factors Concerning the Shipment)
1. What Material(s) Was Offered, Transported, or Accepted for Air 
Transportation?
(Figure 2 divides hazardous materials of particular classes, divisions, 
and packing groups into three risk categories: Category A, Category B, 
and Category C. Find the material(s) at issue in Figure 2 and answer 
the questions below.)
    a. Is the material(s) offered, transported, or accepted in Category 
A?
    If yes, assign a Maximum weight.
    b. Is the material(s) offered, transported, or accepted in Category 
B?
    If yes, assign a Moderate weight.
    c. Is the material(s) offered, transported, or accepted in Category 
C?
    If yes, assign a Minimum weight.

    Guidance Note: The categories in Figure 2 represent the inherent 
risk of danger to air transportation posed by the material. If there 
is more than one type of hazardous material involved in the 
shipment, answer this question using the hazardous material in the 
highest risk category.
2. What Quantity of the Material(s) Was Offered, Transported, or 
Accepted for Air Transportation?
    a. Did the package(s) exceed the authorized quantity limitations by 
a significant amount?
    If yes, consider a Moderate or Maximum weight depending on the 
degree to which the limitation was exceeded.

    Guidance Note: The Matrix, discussed in Section III, takes into 
account the factual situations where the quantity limitations for 
the material are exceeded. This part of the analysis is intended to 
determine whether further aggravating circumstances exist where 
quantity limitations are exceeded by a significant amount. Whether 
this factor is assigned a moderate or maximum weight will depend on 
the degree by which the quantity limitation was exceeded.

    Example: The quantity limitation for gasoline on a passenger 
plane is 5 liters per package. If a violator offers 30 liters in a 
single package on a passenger plane, this may result in a maximum 
weight for this factor.

    b. Were there multiple packages in the shipment?
    If yes, consider a Moderate or Maximum weight, depending on the 
number of packages and total amount of hazardous material being 
transported in violation.

    Guidance Note: A package means a packaging plus its contents. 
There may be multiple packages in one shipment or overpack. Multiple 
packages often represent multiple violations. Under the Sanction 
Guidance, this fact is considered an aggravating circumstance rather 
than a direct multiplier of the sanction for each violation. Each 
case, however, must be evaluated on its particular facts. A very 
large number of packages may result in such an egregious case that 
the overall weight of the case is so high that a penalty beyond the 
maximum point in the range is warranted.

    An investigation will occasionally reveal several shipments from 
the same offeror over a period of several days, all of which involve 
violations of the HMR. These independent acts of offering usually 
are consolidated into one EIR and addressed in one Note of Proposed 
Civil Penalty. However, for purposes of determining the appropriate 
sanction, each separate shipment with a separate air waybill or 
shipping papers, separate destination, and/or any other evidence 
establishing it as a separate shipment is ordinarily considered as a 
separate incident for purposes of applying the sanction guidance 
analysis. It is suggested that the separate shipments be treated as 
individual counts in the EIR and the Notice of Proposed Civil 
Penalty, with each count having its own sanction derived from 
application of this guidance. Note, there must be sufficient 
evidence to support each count.
3. Did the Shipment Cause Damage or Harm to Persons or Property, or 
Interfere With Commerce?
    If yes, consider a Moderate or Maximum weight.

    Guidance Note: The fact that no damage occurred as a result of 
the shipment is not a mitigating factor. However, damage or harm may 
aggravate the nature, circumstances, extent, and gravity of the 
violation. Depending on the degree of damage caused by the shipment 
and/or the existence of other aggravating factors, departure from 
the ranges may be justified.

B. Violator's Degree of Culpability

(The Matrix, Figure 1, considers the relative culpability of the 
violator. This section of the analysis further evaluates the degree of 
culpability of the violator.)
1. Is the Violator the Manufacturer of the Hazardous Material?
    If yes, consider a Maximum weight.

    Guidance Note: A manufacturer of a hazardous material is 
expected to have complete knowledge of the nature of the hazardous 
material and thus, a high degree of culpability will ordinarily be 
imputed to it.
2. Did Someone Other Than the Violator Prepare the Shipment for 
Transportation?
    If yes, consider a Minimum or Moderate weight.

    Guidance Note: Facts supporting an affirmative answer to this 
question may be cause to mitigate culpability and/or pursue a

[[Page 19446]]

separate enforcement action against other responsible parties who 
handled the shipment. A shipper that reships materials received from 
another person in the same packaging is independently responsible 
for ensuring the shipment complies with the HMR. Nevertheless, the 
reshipper is generally considered to have a lesser degree of 
culpability for compliance of the package as received. However, if 
the reshipper unpacks and/or repackages the shipment, the reshipper 
remains as culpable as the original shipper and generally is not 
accorded mitigation under this weighting factor. (For purposes of 
this section, a ``reshipper'' refers to a person, other than the 
original offeror, who offers a shipment of hazardous material for 
transportation.)
3. Did the Violator Reasonably Rely on Incorrect Information From 
Another Source?
    If yes, consider a Minimum weight.

    Guidance Note: Detrimental or reasonable reliance on another 
party may be a mitigating factor when considering the violator's 
degree of culpability. For example, reliance on an inaccurate 
Material Safety Data Sheet (MSDS) may be mitigating.
4. Does the Violator Have a History of Previous HMR Violations?
    If yes, consider a Moderate or Maximum weight.

    Guidance Note: To establish a violation history, a prior 
violation must be an actual finding of violation pursuant to a legal 
enforcement action. Special agents should attempt to determine the 
corporate structure of the violator and whether other business 
entities or names are or have been used by the entity in order to 
obtain a complete violation history. The number and age of 
violations should be considered. Ordinarily, findings of violation 
more than 5 years old carry less weight, unless a continuing pattern 
of violation exists.

C. Other Factors

    Each case must be evaluated on its particular facts. As such, many 
cases may present unique scenarios and aggravating or mitigating 
factors that are not routinely seen. If an aggravating or mitigating 
circumstance exists that is not adequately addressed elsewhere in the 
sanction guidance, it may be included and assigned a weight under this 
section. The factor should be clearly identified and explained in the 
analysis portion of the EIR and carefully scrutinized by legal counsel.

    Guidance Note: For example, a shipment of a single package 
containing several different hazardous materials may present an 
aggravating factor. The degree of seriousness of this factor will 
increase if the hazardous materials are incompatible with each other 
and, therefore, create an increased risk.

    Mitigating factors may also exist that have not been adequately 
considered. For example, a shipment containing a de minimis quantity 
of material or an amount that would have qualified under the small 
quantity exception of Sec. 173.4 may present a mitigating factor if 
as a result there was a reduced risk to safety in transportation.

D. Determine the Final Aggregate Weight of the Case

    All the responses/weights are evaluated to determine a final 
aggregate weight of the case (Minimum, Moderate, and Maximum). 
Questions receiving a ``no'' response will not be included in this 
evaluation. To determine the final aggregate weight, the agent/attorney 
must exercise his/her discretion in light of the statutory factors and 
knowledge of the particular facts of the case. The facts of the 
particular case will dictate the relative importance of each of the 
weighting factors in reaching a final aggregate weight. The final 
aggregate weight should be decided as a result of careful analysis, not 
a mathematical averaging. It is possible that a single weighting factor 
may outweigh all others. The agent/attorney's analysis should always be 
explained in this regard.

    Example: A case involving a hazardous material in the lowest 
risk category may be evaluated to have a maximum weight because of 
the large quantity shipped or the damage resulting from the 
shipment.

II. Utilize the Matrix (Figure 1)

    The sanction ranges under the offeror and offense categories of the 
Sanction Guidance Matrix reflect the relative culpability of the 
violator and the nature, circumstances, extent, and gravity of the 
case. Consideration of these particular statutory factors under the 
Federal hazardous material transportation law is built into the Matrix. 
Further analysis of the statutory factors is required to determine the 
appropriate sanction within the ranges established under the Matrix. 
This analysis is performed in Section 1. After determining the final 
aggregate weight of the case under the Section 1 analysis, that weight 
is applied to the appropriate matrix range to identify the recommended 
sanction amount for each of the relevant violation groups and for the 
case as a whole. Although the Notice of Proposed Civil Penalty may cite 
numerous violations of a particular part or subpart of the HMR, unless 
upward departure is justified, a single penalty amount for each 
violation group is ordinarily used to reach the full sanction.

A. Instructions

    1. Identify the appropriate category for the type of entity and the 
nature of the offense involved in the case. Refer to the Definitions 
Section that follows the Matrix in Figure 1 for guidance. Go to the 
intersecting box and identify the applicable sanction range for each 
violation group.
    2. Apply the conclusion reached in the Section I weighting analysis 
to assign a sanction amount within the minimum, moderate, or maximum 
portion of the sanction range for each relevant violation group. The 
recommended civil penalty at this stage is the sum of the sanctions for 
each of the applicable violation groups. A sanction should not be 
assessed for a violation group if there have been no violations of that 
part or subpart of the HMR. The sanction amount for each violation 
group need not be identical but ordinarily is within the portion of the 
particular sanction range that represents the overall weight of the 
case.
    3. Departure from the Matrix ranges--The Matrix is designed to 
cover the majority of cases involving violations of the HMR. The facts 
and circumstances of a particular case, however, may justify either an 
upward or downward departure from the Matrix ranges. This sanction 
guidance anticipates and encourages departure from the Matrix ranges 
when justified. A case involving violations in which the nature, 
circumstances, extent, and gravity of the incident are particularly 
severe or egregious, may justify upward departure from the Matrix. If 
the investigating agent believes, based upon the facts of a case, that 
a penalty should exceed the Matrix ranges, the agent should consult 
with legal counsel before further processing of the EIR. Conversely, 
the investigating agent may believe that mitigating factors justify a 
downward departure from the Matrix range. Consultation with legal 
counsel is not necessary in the case of a recommended penalty that is 
less than that provided in the Matrix. In either situation, however, 
the agent is to provide a detailed explanation of the basis for the 
decision to go outside the ranges.
    4. Violations of Part 175 regulations, which establish particular 
requirements for air carriers and other aircraft operators, are 
contained in a separate matrix. However, such operators often offer 
Hazmat for air transportation as well as accept and transport it. As 
such, the operator may be liable for violations as a business entity 
within the main Matrix as well as for the specific Part 175 violations.

III. Impact of Other Statutory Factors

    The Federal hazardous material transportation law also requires 
consideration of a violator's ability to pay a civil penalty, the 
impact of the civil penalty on the violator's ability to

[[Page 19447]]

continue to do business, and other matters that justice requires. 
Consideration of these factors may result in adjustment of the 
recommended civil penalty calculated in Section II. In situations where 
the agent or attorney is in possession of mitigating information, such 
as inability to pay the recommended civil penalty or corrective action 
taken, reduction of the recommended penalty may be appropriate. 
Mitigating information should be sufficiently reliable, uncontroverted, 
and documented in order to support reduction of the recommended civil 
penalty prior to issuing the Notice of Proposed Civil Penalty.

A. Ability To Pay/Continue in Business

    Historically, the FAA has considered these factors after the 
issuance of the Notice of Proposed Civil Penalty due to the absence of 
reliable financial information on which to base a reduction prior to 
the issuance of a Notice. This Sanction Guidance recommends that the 
special agent make efforts to obtain reliable information regarding the 
violator's size and financial condition for review prior to the 
issuance of a Notice. This information will be transmitted to the legal 
office for consideration. It is recognized that it may not always be 
possible for the special agent and/or attorney to obtain reliable 
financial information on a particular respondent, that financial 
circumstances change and that information may be provided after the 
issuance of the Notice that may warrant further consideration of a 
respondent's ability to pay.
    1. The investigating agent will attempt to include financial 
information as an exhibit in the EIR. It is anticipated that this 
information, if available, will be obtained from reliable financial 
data bases. Financial documentation should include, but need not be 
limited to, information concerning the violator's corporate structure, 
business address, officers, number of employees, and gross revenues.
    2. The investigating agent provides a statement or comment with 
respect to the financial information obtained but ordinarily does not 
evaluate the financial condition of a respondent with respect to its 
ability to pay a proposed civil penalty. The investigating agent's 
statement should encompass areas such as the number of employees, gross 
revenues, and nature of business of the violator.
    3. FAA legal counsel reviews the financial information provided in 
the EIR and evaluates its sufficiency and relevance to the recommended 
civil penalty. Legal counsel may determine if more current information 
exists concerning the financial condition of a respondent and if that 
information substantially differs from the information available at the 
time of preparation of the EIR. If there is a basis for determining 
that the recommended sanction is inappropriate based upon the financial 
information provided in the EIR, the recommended sanction is adjusted 
prior to issuance of the Notice of Proposed Civil Penalty. This is a 
preliminary consideration of a company's ability to pay. As such, pre-
Notice adjustment of a recommended civil penalty does not preclude 
further consideration of a respondent's financial claims after issuance 
of the Notice.
    4. If legal counsel determines that a respondent qualifies as a 
small business entity, counsel may consider that status under the Small 
Business Regulatory Enforcement Fairness Act (SBREFA) with respect to 
the appropriateness of the recommended civil penalty. A respondent's 
status as a small business entity may be considered in conjunction with 
analysis of the statutory factors.

B. Corrective Action

    The most common ``other matter'' that the FAA takes into 
consideration is corrective action. Corrective action that results in 
mitigation is remedial action that exceeds the minimum legal 
requirements. The primary factors in determining the appropriate amount 
of penalty reduction are the extent and timing of the corrective 
action. In other words, mitigation is determined on the basis of how 
much corrective action was taken and how quickly the action was taken. 
Systemic change intended to prevent future violations should be given 
greater consideration. Similarly, corrective action that commences upon 
the violator's first notice of the violation ordinarily is given 
greater credit than corrective action that commences only after the 
Notice of Proposed Civil Penalty has been issued.
    Mitigation of a recommended civil penalty based upon corrective 
action should be referenced in the Notice of Proposed Civil Penalty so 
that the respondent is on notice that credit already has been given for 
said action.

                                             Matrix and Definitions
                                                   [Figure 1]
----------------------------------------------------------------------------------------------------------------
                                                                               C. Business        D. Business
                                                                             entity that uses     entity that
         Offense categories             A. Individual       B. Business     or handles Hazmat  regularly offers,
                                                               entity        in the course of     accepts, or
                                                                                 business      transports Hazmat
----------------------------------------------------------------------------------------------------------------
I. Declared Shipment:
    1. Shipping Papers..............           250-500          250-1,000          500-2,000        1,000-5,000
    2. Labels.......................           250-500          250-1,000          500-2,000        1,000-5,000
    3. Markings.....................           250-500          250-1,000          500-2,000        1,000-5,000
    4. Packaging....................           250-500          250-1,000          500-2,000        1,000-5,000
    5. Training.....................  .................         250-1,000          500-2,000        1,000-5,000
    6. Emerg. Response..............           250-500          250-1,000          500-2,000        1,000-5,000
    7. Release into Environ.........           250-500          250-1,000          500-2,000        1,000-5,000
    8. Other........................           250-500          250-1,000          500-2,000        1,000-5,000
II. Undeclared Shipment Within
 Hazmat Quantity Limitations:
    1. Shipping Papers..............         250-1,000        1,500-7,500       2,500-10,000       5,000-12,000
    2. Labels.......................         250-1,000        1,500-7,500       2,500-10,000       5,000-12,000
    3. Markings.....................         250-1,000        1,500-7,500       2,500-10,000       5,000-12,000
    4. Packaging....................         250-1,000        1,500-7,500       2,500-10,000       5,000-12,000
    5. Training.....................  .................       1,500-7,500       2,500-10,000       5,000-12,000
    6. Emerg. Response..............         250-1,000        1,500-7,500       2,500-10,000       5,000-12,000
    7. Release into Environ.........         250-1,000        1,500-7,500       2,500-10,000       5,000-12,000
    8. Other........................         250-1,000        1,500-7,500       2,500-10,000       5,000-12,000

[[Page 19448]]

 
III. Undeclared Shipment Hazmat
 Forbidden on, or exceeds qty limits
 for, Passenger Aircraft:
    1. Shipping Papers..............         500-5,000       5,000-15,000       7,500-20,000      10,000-27,500
    2. Labels.......................         500-5,000       5,000-15,000       7,500-20,000      10,000-27,500
    3. Markings.....................         500-5,000       5,000-15,000       7,500-20,000      10,000-27,500
    4. Packaging....................         500-5,000       5,000-15,000       7,500-20,000      10,000-27,500
    5. Training.....................  .................      5,000-15,000       7,500-20,000      10,000-27,500
    6. Emerg. Response..............         500-5,000       5,000-15,000       7,500-20,000      10,000-27,500
    7. Release into Environ.........         500-5,000       5,000-15,000       7,500-20,000      10,000-27,500
    8. Other........................         500-5,000       5,000-15,000       7,500-20,000      10,000-27,500
IV. Undeclared Shipment Forbidden
 on, or exceeds qty limits for, All
 Aircraft:
    1. Shipping Papers..............        500-27,500       7,500-27,500      10,000-27,500      15,000-27,500
    2. Labels.......................        500-27,500       7,500-27,500      10,000-27,500      15,000-27,500
    3. Markings.....................        500-27,500       7,500-27,500      10,000-27,500      15,000-27,500
    4. Packaging....................        500-27,500       7,500-27,500      10,000-27,500      15,000-27,500
    5. Training.....................  .................      7,500-27,500      10,000-27,500      15,000-27,500
    6. Emerg. Response..............        500-27,500       7,500-27,500      10,000-27,500      15,000-27,500
    7. Release into Environ.........        500-27,500       7,500-27,500      10,000-27,500      15,000-27,500
    8. Other........................        500-27,500       7,500-27,500      10,000-27,500      15,000-27,500
V. Intentional or Deliberate              Consult Legal      Consult Legal      Consult Legal      Consult Legal
 Violation..........................
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
                                                                             E. Group I & II   F. Group III & IV
                                                                             air carriers and   air carriers and
            Air carrier and other aircraft operator violations                other aircraft     other aircraft
                                                                                operators          operators
----------------------------------------------------------------------------------------------------------------
Failure to comply with Parts 171, 172, or 173 requirements of the HMR as                (\1\)              (\1\)
 an offeror of Hazmat.....................................................
Improper acceptance of Hazmat for air transportation (i.e., quantity,            5,000-27,500       2,500-15,000
 labeling, marking, packaging, and shipping papers) See 49 CFR 175.30(a)
 (1)-(4)..................................................................
Failure to inspect Hazmat shipment properly. See 49 CFR 175.30 (b), (c),        10,000-27,500       5,000-15,000
 (d), (e).................................................................
Improper storage/securing of Hazmat aboard aircraft.......................      10,000-27,500       5,000-15,000
Failure to provide Hazmat training, maintain records of training, or meet       10,000-27,500       5,000-15,000
 minimum requirements for Hazmat training.................................
Failure to notify FAA properly of incident/discrepancies in Hazmat               5,000-15,000        1,000-5,000
 shipment.................................................................
Failure to provide notice to the pilot-in-command.........................       5,000-15,000        1,000-5,000
Other Part 175 violations.................................................       5,000-15,000        1,000-5,000
----------------------------------------------------------------------------------------------------------------
\1\ Use main Matrix.

Definitions

    (a) Air Carrier and Other Aircraft Operator Groups (I, II, III, 
IV)--Air carriers and other aircraft operators are divided into two 
categories for purposes of determining an appropriate sanction. These 
categories track the air carrier groups established in FAA Order No. 
2150.3A, Appendix 1, Compliance/Enforcement Bulletin 92-1, but also 
includes any operator of an aircraft that is operated ``in commerce'' 
as defined in the Federal hazardous materials law, including Part 129 
Foreign Air Carriers, Part 125 Operators, and Part 91 Operators. Group 
I is comprised of air carriers and other aircraft operators with annual 
operating revenue of $100,000,000 or more. Group II is comprised of air 
carriers and other aircraft operators that hold Part 121 certificates 
or have 50 or more pilots or operate 25 or more aircraft, with annual 
operating revenue of less than $100,000,000. Group III is comprised of 
air carriers and other aircraft operators that do not meet the criteria 
for Group II with (1) 6 to 49 pilots, or (2) 6 to 24 aircraft. Group IV 
is comprised of all other air carriers or aircraft operators not 
meeting the criteria for Groups I, II, or III.
    (b) Business Entity--The violator is a business, corporation, 
partnership, Sub-S Corporation, sole proprietor, association, or any 
type of commercial entity. An individual who offers a hazmat shipment 
in air transportation in the course of his/her self-owned business 
falls into this category. Includes all entities defined under the HMR's 
definition of ``person,'' (49 CFR 171.8) with the exception of an 
individual as defined herein.
    (c) Business Entity that Regularly Offers, Accepts, or Transports 
Hazardous Materials in the Course of its Business.--A manufacturer or 
distributor of Hazmat falls into this category. A freight forwarder 
would also fall into this category. The aspect of ``regularly'' 
offering covers a business entity that offers Hazmat with some 
anticipated frequency or purports to do so, e.g., a catalogue company 
that offers hazardous material to its customers would fall into this 
category, even though its actual sale or transportation of the Hazmat 
is infrequent or limited.
    (d) Business Entity that Uses, Handles Hazmat in the Course of Its 
Business--This category encompasses the business that utilizes Hazmat 
in its business but does not offer it for transportation on a regular 
basis, as described above. For example, a manufacturer of a non-Hazmat 
product that uses Hazmat in the manufacturing process could fall into 
this category. It must be established that

[[Page 19449]]

the company ordinarily does not offer the Hazmat it utilizes for 
transportation, and the shipment in this instance represents an 
isolated incident. This type of business is held to a higher standard 
than the business entity that has no regular involvement with Hazmat. 
The described business entity receives the subject hazardous material 
in transportation and uses it in its business; thus, it is clearly on 
notice of the hazardous nature of the material and the regulatory 
requirements to which the Hazmat is subject.
    (e) Declared Shipment--A declared shipment, for purposes of this 
matrix only, is one that complies with one or more of the communicative 
requirements of the HMR, i.e., it has markings, labels, and/or 
partially-correct shipping papers. A package that has shipping papers 
that declare the contents as hazardous material but is otherwise not 
marked or labeled falls into this category. Similarly, a properly 
marked and labeled package that lacks shipping papers also falls into 
this category. A case falls into this category where there is clear 
indication that the offeror made some attempt to give notice of the 
hazardous nature of the shipment.
    (f) Forbidden or Exceeds Quantity Limits for Passenger Aircraft--A 
shipment falls into this category if the quantity of Hazmat per package 
exceeds the quantity limitations for passenger-carrying aircraft or if 
the particular hazardous material is forbidden in air transportation on 
passenger aircraft.
    (g) Forbidden on or Exceeds Quantity Limits for All Aircraft--A 
shipment will fall into this category if the quantity of hazardous 
material per package exceeds the allowable amount for both passenger 
and cargo aircraft or the Hazmat is absolutely forbidden in air 
transportation.
    (h) Hazmat--A ``hazardous material,'' as defined in 49 CFR 171.8, 
includes and is interchangeable with the term ``dangerous goods, '' as 
used in the International Civil Aviation Organization (ICAO) Technical 
Instructions.
    (i) Individual--An individual who offers a shipment of hazardous 
material in his/her personal capacity without any business purpose or 
as part of a commercial enterprise on the part of the individual.
    (i) Intentional or Deliberate Violation--A shipment falls into this 
category when there is evidence that the offeror, acceptor, air 
carrier, or aircraft operator had knowledge of the requirements of the 
HMR and willfully circumvented or attempted to circumvent those 
requirements. For example, an offeror who places a properly marked and 
labeled Hazmat shipment along with properly completed shipping papers, 
into an overpack marked as ``printed material,'' has committed an 
intentional or deliberate violation. In this type of case, the 
investigating agent shall consult with FAA legal counsel and follow 
agency guidance for potential criminal violations of the HMR.
    (k) Undeclared Shipment--This is a shipment that has no indication 
of its hazardous material contents and/or no indication that the 
offeror communicated the hazardous nature of the shipment's contents to 
persons who accept or transport.
    (l) Within Hazmat Quantity Limitations--The amount of hazardous 
material is within the quantity limitations per package as established 
in the Sec. 172.101 Table (49 CFR 172.101) for the type of aircraft on 
which the shipment traveled. For example, if the shipment was offered 
for transportation on a passenger aircraft, the quantity of hazardous 
material was within the established limit for transportation by 
passenger aircraft. If the shipment was offered for transportation on a 
cargo aircraft, the quantity limitations for cargo aircraft apply.

                                                 Risk Categories
                                                   [Figure 2]
----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
                                        Category ``A'' (Maximum Weight)
----------------------------------------------------------------------------------------------------------------
  Category ``A'' materials are materials that when released in the confines of an aircraft can potentially have
a catastrophic effect on an aircraft's ability to continue safe flight, resulting in a crash or emergency
landing causing injury or death to passengers and flightcrew, as well as persons on the ground.
 
Class 1.............................................  Explosives: Division 1.1, 1.2, 1.3.
Class 2.............................................  Compressed Gases All 2.1, 2.2 with Subsidiary Risk 5.1 and
                                                       All 2.3 PIH Zones A-D.
Class 3.............................................  Flammable Liquids PG I, II, and (PIH).
Class 4.............................................  Division 4.1 Flammable Solids PG I, & (Matches).
                                                      Division 4.2 Spontaneously Combustible Materials PG I
                                                       (Pyrophoric).
                                                      Division 4.3 Dangerous When Wet PG I.
Class 5.............................................  Division 5.1 Oxidizing Liquids and Solids PG I, II, e.g.,
                                                       ``Chemical Oxygen Generators''.
                                                      Division 5.2 Organic Peroxides PG II (Type A, B, C, or D).
Class 6.............................................  Division 6.1 Poisonous Liquids PG I (PIH).
Class 7.............................................  Cargo Aircraft Only Quantities on Passenger Aircraft.
Class 8.............................................  Corrosive Material Liquid PG I and (PIH).
 
  Forbidden Materials (See 49 CFR 173.21 & ICAO Technical Instructions).
  Forbidden Hazmat listed in Dangerous Goods Table 49 CFR 172.101.
                                        Category ``B'' (Moderate Weight)
----------------------------------------------------------------------------------------------------------------
  The materials listed in Category ``B'' are materials that may not pose an immediate threat to the safety of a
flight, but can cause death or injury to persons due to unintended releases in aircraft cabin areas, and
potential damage to aircraft structures over a longer period of time due to undiscovered releases on aircraft
structural components.
 
Class 1.............................................  Division 1.4, 1.5, 1.6, All Compatibility Groups.
Class 3.............................................  PG III Flammable Liquids.
Class 4.............................................  Division 4.1 Flammable Solids PG II, III.
                                                      Division 4.2 Spontaneously Combustible Materials PG III.
                                                      Division 4.3 Dangerous When Wet PG II, III.
Class 5.............................................  Division 5.1 Oxidizing Liquids or Solids PG III.
                                                      Division 5.2 Organic Peroxides (Type E, F, G).
Class 6.............................................  Division 6.1 Poisonous Liquids PG I, II (NON-PIH).
                                                      Division 6.2 Infectious Substances.

[[Page 19450]]

 
Class 7.............................................  Radioactive Materials, yellow label III, yellow label II,
                                                       and white label I.
Class 8.............................................  Liquids PG II, III Solids PG I, II, III.
----------------------------------------------------------------------------------------------------------------
                                        Category ``C'' (Minimum Weight)
----------------------------------------------------------------------------------------------------------------
  The materials listed in Category ``C'' are materials that present the least amount of risk to the
transportation system.
 
Class 2.............................................  2.2 Nonflammable Gas.
Class 6.............................................  Division 6.1 Packing Group III.
Class 7.............................................  All other RAM (LSA, LTD QTY, Instruments and Articles).
Class 9.............................................  Miscellaneous Dangerous Goods (ORM-D and Consumer
                                                       Commodity).
----------------------------------------------------------------------------------------------------------------
Note: This guidance is not intended to replace the experienced judgment to a special agent who is convinced,
  based on the evidence and facts of a case, that the failure of an air carrier, shipper, freight forwarder, or
  passenger to follow established regulations has posed a risk to aviation safety.

    Issued in Washington, DC on April 14, 1999.
Jane F. Garvey,
Administrator.
[FR Doc. 99-9983 Filed 4-20-99; 8:45 am]
BILLING CODE 4910-13-M