The Safe Explosives Act The Safe Explosives Act: A New World of Permits, Fingerprints, Photos and Background

Checks

presented by

Timothy M. Biddle, Esquire Bridget E. Littlefield, Esquire Crowell & Moring LLP Washington, D.C.

The Safe Explosives Act Overview of the SEA

Congress enacted the Safe Explosives Act (SEA) on November 25, 2002 as part of the Homeland Security Act. The purpose of the SEA is to prevent terrorists and criminals from obtaining explosives. The SEA imposes a permitting, licensing and background clearance requirement on all users, manufacturers, dealers and importers of explosives. ATF is the agency responsible for enforcement of 2 the SEA.

The Safe Explosives Act

Who is prohibited?
Effective January 24, 2003: The SEA expanded the categories of persons prohibited from using explosives to include:
Illegal aliens Nonimmigrant aliens (with exceptions) Persons dishonorably discharged from the U.S. armed forces Persons who have renounced their U.S. citizenship
3

The Safe Explosives Act Aliens

Any person who is not a citizen of the U.S. An alien who is a legal permanent resident (i.e., has a green card) is not prohibited from possessing or using explosives A lawful non-immigrant alien (i.e., in the U.S. on a temporary visa) is also allowed to possess explosives, BUT ONLY if he or she is a responsible person
4

The Safe Explosives Act Others prohibited from possessing explosives

Other categories of persons prohibited from possessing explosives include those who:
have been convicted of, or are under indictment for, a felony are fugitives from justice are unlawful users of, or are addicted to, any controlled substance have been adjudicated as mentally defective or committed to a mental institution

The Safe Explosives Act

Other Requirements Effective January 24, 2003:

Sampling for Manufacturers Theft Reporting

The Safe Explosives Act

Sampling Requirement for Manufacturers ATF-licensed manufacturers, including those who manufacture explosives for on-site use only, must furnish samples of explosive materials or ammonium nitrate to ATF, upon request, as well as information on chemical composition of products Regulations provide for reimbursement
7

The Safe Explosives Act

Theft Reporting Requirements Licensee/permittee who discovers that explosive materials have been stolen must report theft to the ATF and local authorities within 24 hours of discovery Penalties for failure to report: fine of up to 250K and imprisonment for up to 5 yrs

The Safe Explosives Act

Requirements Effective May 24, 2003: Identification, background checks and clearances Licenses/Permits

The Safe Explosives Act

Users of Explosives Must Have Permits Permit authorizes use, transporting and shipping of explosives Intrastate users of explosives no longer exempt from permitting requirements Limited permit available for users who infrequently purchase explosives
allows user to make no more than 6 purchases within 12-month period from instate seller 10

The Safe Explosives Act

Manufacturers of Explosives Must have a license from ATF License also authorizes transporting, shipping, receiving and use of explosive materials License required for manufacturing of explosives even if for on-site or company use only Must post license at mine
11

The Safe Explosives Act

Independent Contractors? If you use an IC to handle ALL blasting at your site, you DO NOT need a permit and your employees will not be subject to background checks - BUT
you are only exempt from the SEA if you or your employees have NO contact with or control over explosives

12

The Safe Explosives Act

Use of IC: Key Questions Do your employees have access to explosives or keys to an explosives magazine/storage facility used by an IC? Do they receive or unload explosives delivered to your site? Do they inventory explosives?
IF YES, YOU NEED A PERMIT
13

The Safe Explosives Act

The Permit/License Process
To apply, company must: submit appropriate application form Form 5400.13/16 submit required info about responsible persons photos and fingerprints submit Employee Possessor Questionnaire
14

The Safe Explosives Act

Identification, background checks and clearance requirements As part of permit/license application, companies must:
identify, fingerprint, and photograph each responsible person identify all employees authorized to possess explosive materials (no fingerprints/photos)

All identified employees will be subject to a background check

15

The Safe Explosives Act

A responsible person is:

an individual who has the power to direct the management and policies of the applicant pertaining to explosive materials.

16

The Safe Explosives Act

Congress intended the term Responsible Person to be construed broadly. The term can include:
corporate officers and directors stockholders who have the power to direct management and policies senior managers

It is best to err on the side of overinclusiveness.

17

The Safe Explosives Act

Responsible Persons Manage the Use of Explosive Materials The responsible person determines the type and quantity of explosive materials to be procured, manufactured, stored, transported, or used determines when and where explosive materials will be procured, manufactured, stored, transported, or used assigns company employees to duties involving explosive materials supervises activities of company employees 18 involving use of explosive materials

The Safe Explosives Act

Employee Possessor Questionnaire: The SEA requires applicants for a license or permit to identify individuals authorized to possess explosive materials.

19

The Safe Explosives Act

What is Possession of an Explosive? Term encompasses actual and constructive possession
actual possession includes the physical handling of explosive materials as part of the production process, the shipping, transporting or selling of explosives, and the detonation of explosives constructive possession exists when an employee lacks direct physical control over explosive materials, but knowingly has the power and intention to exercise dominion and control over the explosive materials, either directly or indirectly through others
20

The Safe Explosives Act

Practical test for employee possessor:
Does the employee have sufficient contact with explosive materials to have the opportunity to take or use them for unlawful purposes?

21

The Safe Explosives Act

After background check, ATF will:
provide employee with either a letter of clearance or explanation of grounds for determination that he is a prohibited person, how to apply for a waiver, and applicable appeal procedures notify employer in writing of its determination that an employee is a prohibited person (but not specifics)

Pending resolution of appeal, employee may not possess explosives.

22

The Safe Explosives Act

What if we already have a license or permit?
Pre-SEA licenses/permits are valid until renewal time Pre-SEA license or permit will remain valid until ATF acts upon TIMELY renewal application

23

The Safe Explosives Act

Processing Time ATF must approve or deny an application for a license or permit within 90 days of receipt ATF recommends submitting renewal applications at least 90 days before expiration of existing permit to ensure renewal prior to expiration
24

The Safe Explosives Act

Inspection ATF must verify by inspection that applicants for permits/licenses have storage facilities for explosive materials that meet the standards for safety and security set forth in regulations.
Inspection requirement also applies to renewals
ATF officer may enter during business hours to inspect or examine records required to be kept under SEA
25

The Safe Explosives Act

Penalties It is a FELONY to manufacture or use explosive materials without a license or permit. It is also a FELONY to knowingly allow a prohibited person to possess or use explosive materials.

26

The Safe Explosives Act

Compliance Tips
Identify and list responsible persons and persons authorized to possess explosives at each site Keep this list current Use certification form to confirm eligibility Train employees about SEA requirements Consider an amendment to the company by-laws expressly limiting responsible persons
27

The Safe Explosives Act

Resources For Forms
Contact the National Explosives Licensing Center (NELC) at (404) 417-2750; or Download forms at www.atf.gov.

For Questions
Consult:
ATF Your lawyer
28

The Safe Explosives Act

Now its up to you . . . .

29