Homeland Security issues interim rule on industry liability

The Homeland Security Department on Tuesday announced an interim rule designed to limit the liability risks associated with anti-terrorism technology. The announcement came during a seminar with industry officials.

"It is in the public's interest to have this interim rule effective immediately because its aim is to foster the development and deployment of anti-terrorism technologies," said the rule signed by Homeland Security Secretary Tom Ridge late on Friday.

The regulation also seeks to clarify the process for seeking protection under the law in order to provide "an instant incentive for prospective applicants ... and for others to begin exploring new measures that will prevent or reduce acts of terrorism."

Industry officials who attended the seminar agreed that an urgent need exists for manufacturers to apply for the liability protections under the statute, which was enacted in January. Liability protects companies if their anti-terrorism products fail to prevent attacks.

"Everybody is champing at the bit," one industry official said, adding that businesses are on "pins and needles" hoping the department can issue the liability protections before another terrorist attack like the Sept.11, 2001, tragedy. The interim regulation would let manufacturers retain liability for five to eight years.

The department has heard "anecdotally" that it will be flooded with applications, said Penrose Albright, Homeland Security's assistant secretary for the science and technology directorate, the division in charge of implementing the law. "We could get 500 [applications]. We could get 5,000. ... We just don't know," he said.

The rule takes effect Thursday, said John Mitnick, a lawyer with the department's general counsel office. Businesses can begin filing applications electronically or otherwise to receive liability for products, equipment, services, devices or information technologies that are "designed, developed, modified or procured" for anti-terrorism purposes, according to a presentation on the law.

Albright said businesses must provide specific information such as the technological effectiveness of their products and the costs of making the technologies to receive liability. The department has "roughly 150 days to get the designation out the door," he added.

While Albright called the criteria "information that [companies] ought to have readily available," an industry official worried about how department plans to protect the data, as well as the cost and burden of providing the information.

"I'm concerned they're going a little overboard," said Henry Hopkins of Boeing, but it is the "right process" to prevent the department from repeatedly requesting more information.

Holly Dockery, the division's director for implementing the act, said the law provides protections for sensitive information under the Trade Secrets Act, as well as exemptions from the Freedom of Information Act. She also said the division also has acquired cyber-security protections to secure electronically filed data.

Albright said the division recently finished a four-city "road show" to educate industry on the law and may travel again in a few months for feedback on the interim regulation before issuing the final rule.