EPA Issues Penalty Policy for ECA Violations

The US Environmental Protection Agency (EPA) has published a penalty policy for assessing civil penalties for violations of the fuel sulphur standards in the US sections of the MARPOL Annex VI emission control areas (ECAs).

The policy’s aim is to remove the benefit of non-compliance and to reflect the gravity of the violations.

The EPA Penalty Policy for Violations by Ships of the Sulfur in Fuel Standard and Related Provisions was released two weeks after the ECA sulphur cap was lowered to 0.10 per cent and outlines the methods by which the EPA assesses civil penalties for violations of the applicable fuel sulphur standards.

The policy establishes deterrence as an important aim of the penalty assessment.

More specifically, it states that a penalty should remove any significant benefit of non-compliance.

In addition, the penalty includes an amount beyond recovery of the economic benefit gained using non-compliant fuel to reflect the seriousness of the violation.

The policy allows a certain degree of flexibility and adjustment of the preliminary deterrence amount to account for the unique facts of each case such as degree of willfulness or negligence, degree of co-operation, history of non-compliance, litigation risk, ability to pay and performance of a supplementary environmental project (SEP).

“Both the EPA and the US Coast Guard have made it clear that they are actively enforcing the North American and US Caribbean ECA requirements and will be strengthening their efforts to ensure compliance. With the new ECA penalty policy in place, there is now clarity as to the civil penalties that might be imposed on ships that violate the US ECA requirements,” indemnity insurer Gard said.

The penalty policy can be accessed here.