Safety Act Designation - DHS

Safety Act Designation - DHS

U.S. Department of Homeland Security (DHS)

As part of the Homeland Security Act of 2002, Public Law 107-296, Congress enacted several levels of liability protection for providers of anti-terrorism technologies. The SAFETY Act ("the Act") provides incentives for the development and deployment of anti-terrorism technologies by creating a system of "risk management" and a system of "litigation management." The purpose of the Act is to ensure that the threat of liability does not deter potential manufacturers or Sellers of anti-terrorism technologies from developing, commercializing, and deploying technologies that could significantly reduce the risks or mitigate the effects of large-scale terrorist events. Thus, the Act creates certain liability limitations for "claims arising out of, relating to, or resulting from an Act of Terrorism" where Qualified Anti-Terrorism Technologies have been deployed. The Act does not limit liability for harms caused by anti-terrorism technologies when no Act of Terrorism has occurred.

The SAFETY Act creates a system of risk and litigation management designed to ensure that the threat of liability in the event of an Act of Terrorism does not deter potential manufacturers or sellers of anti-terrorism technologies from developing, commercializing, and deploying technologies that could save lives.

Pursuant to the SAFETY Act, an Act of Terrorism is: ACT OF TERRORISM- (A) The term "act of terrorism" means any act that the Secretary determines meets the requirements under subparagraph (b) of the Act, as such requirements are further defined and specified by the Secretary. REQUIREMENTS- (B) An act meets the requirements of this subparagraph if the act- (i) is unlawful; (ii) causes harm to a person, property, or entity, in the United States, or in the case of a domestic United States air carrier or a United States-flag vessel (or a vessel based principally in the United States on which the United States income tax is paid and whose insurance coverage is subject to regulation in the United States), in or outside the United States; and (iii) uses or attempts to use instrumentalities, weapons or other methods designed or intended to cause mass destruction, injury or other loss to citizens or institutions of the United States.

There are two levels of protection available under the SAFETY Act. They are:

I. Designation : A technology must demonstrated effectiveness during operational testing or through prior use. Designation provides a liability cap as well as exclusive action in Federal court, no joint and several liability for non-economic damages, and no punitive damages or prejudgment interest. An applicant is required by the SAFETY Act to obtain liability insurance in the amount of the specified liability cap certified by the Secretary. A full Designation normally lasts for 5 years, after which time it can be renewed. Any technology deployed during its period of Designation is protected for the lifetime of its deployment. If a technology shows promise but is not sufficiently mature to receive a full Designation, a Developmental Testing & Evaluation (DT&E) Designation is available to provide protection during further testing or trial deployment in order to collect the additional efficacy data necessary for a full Designation. A DT&E Designation provides similar liability protections as that provided by a full Designation but with certain limitations and constraints. In general, DT&E Designations will include limitations on the use and deployment of the subject technology, remain terminable at-will by the Department should any concerns regarding the safety of technology come to light, and will have a limited term not to exceed a reasonable period for testing or evaluating the technology (presumptively not longer than 36 months). Further, the SAFETY Act liability protections associated with DT&E Designations will apply only to acts that occur during the period set forth in the particular DT&E Designation.

II. Certification : In addition to the benefits provided under Designation, Certification allows a seller of antiterrorism technology to assert the Government Contractor Defense that immunizes Sellers from liability for claims arising from acts of terrorism. Technologies that receive Certification will be also placed on an Approved Products List for Homeland Security.

When a Technology is Designated as a Qualified Anti-Terrorism Technology (QATT), the Seller of the QATT is granted limited liability for third-party claims arising out of the deployment of the QATT with respect to an "Act of Terrorism" (as defined in the SAFETY Act and the implementing regulations). The maximum liability is determined by the Department of Homeland Security on an applicant-by-applicant basis based on information contained in the application, and the Seller is required to maintain liability insurance at that level. The Seller also enjoys other important protections, including immunity from punitive damages. In addition, in accordance with DHS's interpretation of the SAFETY Act, the Seller of a QATT becomes the sole entity that can be sued for third-party injuries due to the alleged failure of the QATT when deployed in defense against, response to, or recovery from an Act of Terrorism, effectively protecting all other companies and persons in the manufacturing and distribution chains from these claims. A User remains responsible for claims that allege negligence by the User. When a QATT is Certified by DHS as an "Approved Product for Homeland Security," the Seller becomes eligible for a presumption that the Government Contractor Defense will apply to third-party claims arising out of the deployment of the QATT with respect to an "Act of Terrorism." The successful assertion of this defense eliminates liability on the part of the Seller for such claims. Designation is a prerequisite for Certification.

The SAFETY Act provides a broad definition regarding the range of technologies that can potentially receive SAFETY Act protections. The Department of Homeland Security has not specifically defined "support services," but instead allows applicants to submit an application, if they believe that their product or service meets the criteria defined in the SAFETY Act. These criteria are also discussed in the regulation established in 6 C.F.R. Part 25, the "Regulations Implementing the Support Anti-terrorism by Fostering Effective Technologies Act of 2002 (the SAFETY Act); Final Rule," located in the reference material section. Because of the unique characteristics of each Technology, we refer each Applicant to this source and to the application kit and pre-application process as methods to determine if SAFETY Act protections could apply to a technology.

The Department of Homeland Security (DHS) has established a streamlined procedure for providing SAFETY Act coverage for qualified Sellers of certain categories of technologies. These types of Certifications or Designations are known as "Block Designations" or "Block Certifications." Block Designations and Block Certifications may be issued at the Secretary of Homeland Security's discretion and are intended to recognize technologies that meet the criteria for Designation as a Qualified Anti-Terrorism Technology (QATT) or Certification, based on established performance standards or defined technical characteristics. Fundamentally, Block Designation or Block Certification will announce to potential Sellers of the subject QATT that DHS has determined that the QATT satisfies the technical criteria for either Designation or Certification and only limited additional economic and technical analyses will normally be required in evaluating applications concerning these QATTs. The terms of any such Block Designation or Block Certification will establish the procedures and conditions upon which an Applicant may receive SAFETY Act coverage as a Seller of the subject technology. Applications from potential Sellers of a QATT that has received either Block Designation or Block Certification will receive expedited review and are required to contain submission of minimal information concerning the technical merits of the underlying technology (i.e., data on meantime between failures). All Block Designations and Block Certifications will be published by the Department within ten days after the issuance thereof on the SAFETY Act Web site, and copies may also be obtained by mail by sending a request to: Office of SAFETY Act Implementation, Department of Homeland Security, S&T SAFETY, Room 1715, Mail Stop 8700, 245 Murray Lane, Washington, DC 20528-0216. Such publication will be coordinated to guard against the unauthorized disclosure of proprietary information. Any person, firm, or other entity that desires to qualify as a Seller of a QATT that is the subject of a Block Designation or Block Certification will be required to submit only those portions of the application referenced in ? 25.6(a) of the Final Rule that are specified in such Block Designation or Block Certification, and otherwise to comply with terms of ? 25.6(a) and the relevant Block Designation or Block Certification.

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