Florim USA, Inc. (Board decision, May 27, 2025)

Plain-English summary

Florim USA, Inc. imported four self-contained heat-exchange products containing R-410A on or about February 13, 2025. EPA alleged that the products used a regulated substance with a global warming potential above the applicable limit for the product sector, violating the Technology Transition regulations. R-410A is a blend of HFC-32 and HFC-125 with a calculated global warming potential of 2,087.5. Florim completed corrective action by exporting the products and agreed to pay a $17,487 civil penalty. The EAB ratified the Expedited Settlement Agreement and ordered compliance.

Decision snapshot

• Cited authorities: American Innovation and Manufacturing Act; 42 U.S.C. §§ 7413 and 7675; 40 C.F.R. parts 13, 22, and 84
• Outcome: The Expedited Settlement Agreement was ratified, Florim was ordered to comply with its terms, and a $17,487 civil penalty was assessed.
• Key point: The Technology Transition regulations restrict imports of products using regulated substances above the applicable global-warming-potential limit.

Full text (EPA EAB public release)

FILED
May 27, 2025
Clerk, Environmental Appeals Board
INITIALS [illegible]
ENVIRONMENTAL APPEALS BOARD
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY WASHINGTON, D.C.
)
)
In re Florim USA, Inc. ) Docket No. CAA-2025-8713
)
a)
FINAL ORDER
Pursuant to 40 C.F.R. § 22.18(b)-(c) of EPA’s Consolidated Rules of Practice Governing the Administrative Assessment of Penalties and the Revocation/Termination or Suspension of Permits, the attached Expedited Settlement Agreement resolving this matter is incorporated by reference into this Final Order and is hereby ratified. The Respondent is ORDERED to comply with all terms of the Expedited Settlement Agreement, effective immediately. So ordered.1 ENVIRONMENTAL APPEALS BOARD Dated: May 27, 2025 Mary Kay Lynch Environmental Appeals Judge 1 The three-member panel ratifying this matter is composed of Environmental Appeals Judges Wendy L. Blake, Mary Kay Lynch, and Ammie Roseman-Orr. ENVIRONMENTAL APPEALS BOARD UNITED STATES ENVIRONMENTAL PROTECTION AGENCY WASHINGTON, D.C
)
In re: ) Docket No. CAA-2025-8713
)
Florim USA, Inc. »)
)
)
es
EXPEDITED SETTLEMENT AGREEMENT
A. JURISDICTION

1. This is an expedited administrative penalty assessment proceeding brought for an alleged
   violation of the American Innovation in Manufacturing Act of 2020 (“AIM Act”), 42 U.S.C.
   § 7675, which governs the import of hydrofluorocarbons (“HFCs”). This proceeding is brought under Section 113(d) of the Clean Air Act (“CAA”), 42 U.S.C. § 7413(d), which authorizes the United States Environmental Protection Agency (“EPA”) to bring administrative civil enforcement actions.
2. This expedited settlement agreement (“Agreement”) is entered into under Section 113(d) of
   the CAA, as amended, 42 U.S.C. § 7413(d), and the Consolidated Rules of Practice Governing the Administrative Assessment of Penalties and the Revocation/Termination or Suspension of Permits, 40 C.F.R. Part 22.
3. Complainant is the United States Environmental Protection Agency. On the EPA’s behalf,
   Director Mary E. Greene of the Air Enforcement Division is delegated the authority to settle civil administrative penalty proceedings under Section 113(d) of the CAA.
4. Respondent is Florim USA, Inc. (“Florim’’) and is a “person” as defined below and identified
   further in Table 1 of ESA Attachment.
5. Complainant and Respondent (together, the “Parties”), having agreed that settlement of this
   action is in the public interest, consent to the issuance of the attached final order (“Final Order” or “Order”) ratifying this expedited settlement agreement before taking testimony and without adjudication of any issues of law or fact herein, and Respondent agrees to comply with the terms of this Agreement and Final Order.

6. The Environmental Appeals Board is authorized to ratify this Agreement, which
   memorializes a settlement between Complainant and Respondent. 40 C.F.R. §§ 22.4(b) and 22.18(b). 1

7. The ratification of the Final Order, incorporating this agreement, simultaneously commences
   and concludes this proceeding. 40 C.F.R. § 22.13(b).
   B. GOVERNING LAW

8. This proceeding arises under the American Innovation and Manufacturing Act of 2020, 42
   U.S.C. § 7675, and the regulations promulgated thereunder.

9. The EPA is authorized to enforce the AIM Act and any regulation promulgated thereunder
   pursuant to the federal enforcement authorities established by Section 113(a) of the CAA, 42 U.S.C. § 7413(a). 42 U.S.C. § 7675(k)(1)(C).
10. The EPA regulations at 40 C.F.R. Part 84, Subpart B, implement the AIM Act requirement to
    accelerate the transition of technologies in products and systems which utilize HFCs to substances with lower global warming potentials.

11. The regulations at 40 C.F.R. § 84.54(a)(1) provide that “no person may manufacture or
    import any product in the following sectors or subsectors that uses a regulated substance; effective January 1, 2025, self-contained residential and light commercial air conditioning and heat pump products using a regulated substance, or a blend containing a regulated substance, with a global warming potential of 700 or greater.”

12. The regulations at 40 C.F.R., Part 84, Subpart B, contain the following definitions:

a) “Import” is defined as “to land on, bring into, or introduce into, or attempt to land on, bring into, or introduce into, any place subject to the jurisdiction of the United States, regardless of whether that landing, bringing, or introduction constitutes an importation within the meaning of the customs laws of the United States. Offloading used regulated substances recovered from equipment aboard a marine vessel, aircraft, or other aerospace vehicle during servicing is not considered an import.” 40 C.F.R. § 84.52 (referring back to the definition in 40 C.F.R. § 84.3). b) “Importer” is defined as “any person who imports any product or specified component using or intended for use with a regulated substance into the United States. Importer includes the person primarily liable for the payment of any duties on the merchandise or an authorized agent acting on his or her behalf. The term also includes: (1) The consignee; (2) The importer of record; (3) The actual owner; or (4) The transferee, if the right to withdraw merchandise from a bonded warehouse has been transferred.” 40 C.F.R.
§ 84.52.
c) “Product” is defined as “an item or category of items manufactured from raw or recycled materials which performs a function or task and is functional upon completion of manufacturing. The term includes, but is not limited to: appliances, foams, fully formulated polyols, self-contained fire suppression devices, aerosols, pressurized dispensers, and wipes.” 40 C.F.R. § 84.52. 2

13. A current list of regulated substances, their chemical formulas, and their exchange values can
    be found in Appendix A to 40 C.F.R. Part 84. See 40 C.F.R. § 84.3.

14. The regulations at 40 C.F.R. § 84.64(a) provide, “the global warming potential of a regulated
    substance is the exchange value for the regulated substance listed in subsection (c) of the AIM Act and in appendix A to this part 84.”

15. The substance at issue in this matter is R-410A, a blend of 50% HFC-32 and 50% HFC-125.
    These HFCs are assigned the following exchange values and therefore global warming potentials. 40 C.F.R. Part 84, Appendix A. HFC Chemical Formula eo oe Potential

16. To determine the GWP of a blend comprised of only HFC compounds, EPA calculates the
    contribution of each regulated substance to the total GWP of the blend. Pursuant to 40 CFR 84.64(b), for blends containing only regulated substances the global warming potential of the blend is the sum of the global warming potentials of each constituent of the blend multiplied by the nominal mass fraction of that constituent within the blend. For example, if the percentages of the blend and the GWP (in parentheses) of the constituents are: 50% HFC-32 (675), 50% HFC-125 (3,500), the GWP of this example would be calculated as (0.50 x 675)
    + (0.5 x 3,500) = 2087.5. As a blend of regulated substances, R-410A has a global warming
    potential of 2087.5.
    C. ALLEGED VIOLATION(S) OF LAW

17. The EPA alleges that, on or about February 13, 2025, Respondent imported a product
    containing a regulated substance, in violation of 40 C.F.R. § 84.54(a)(1) for each of the regulated products identified in Table 1 of the ESA Attachment. D. TERMS OF AGREEMENT

18. For the purpose of this proceeding, as required by 40 C.F.R. § 22.18(b)(2), Respondent:
    a. admits that the EPA has jurisdiction over the subject matter alleged in this Agreement; b. admits the facts stipulated in Table 1 of ESA Attachment; Cc. consents to the assessment of a civil penalty as stated in Table 3 of ESA Attachment and Section E below; 3

d. waives any right to contest the alleged violation(s) of law set forth in Section C of this Agreement; and

e. waives its right to appeal the Order accompanying this Agreement.

19. By signing this settlement agreement, respondent waives any rights or defenses that
    respondent has or may have for this matter to be resolved in federal court, including but not limited to any right to a jury trial, and waives any right to challenge the lawfulness of the final order accompanying the expedited settlement agreement.
20. For the purpose of this proceeding, Respondent:

a. agrees that this Agreement states a claim upon which relief may be granted against Respondent;

b. acknowledges that this Agreement constitutes an enforcement action for purposes of considering Respondent’s compliance history in any subsequent enforcement actions related to the Respondent;

c. certifies that it completed the corrective action as set forth in Table 4 of ESA Attachment;

d. waives its right to request a hearing, any right to contest the allegations in this Expedited Settlement Agreement and Final Order and its right to appeal this Expedited Settlement Agreement and Final Order;

é. consents to personal jurisdiction in any action to enforce this Agreement or Order, or both, in an appropriate United States District Court; and

f. waives any rights it may possess at law or in equity to challenge the authority of the EPA to bring a civil action in an appropriate United States District Court to compel compliance with the Agreement or Order, or both, and to seek an additional penalty for noncompliance with the Agreement or Order and agrees that federal law shall govern in any such civil action. E. TERMS OF PAYMENT

21. Respondent agrees to pay a civil penalty in the amount of $17,487 (“Assessed Penalty”),
    which is stated in Table 3 of ESA Attachment, within thirty (30) calendar days after the date the Final Order ratifying this Agreement is filed with the Clerk of the Environmental Appeals Board (“Filing Date”). Respondent shall pay the Assessed Penalty and any interest, fees, and other charges due using any method, or combination of appropriate methods, as provided on the EPA website: https://www.epa.gov/financial/makepayment. For additional instructions see: https://www.epa.gov/financial/additional-instructions-making-payments-epa.
22. When making a payment, Respondent shall:
    a. Identify every payment with Respondent’s name and the docket number of this Agreement, CAA-2025-8713, b. Concurrently with any payment or within 24 hours of any payment, Respondent shall serve proof of such payment to the following person(s): 4

Tommie Madison, Clerk of the Environmental Appeals Board

U.S. Environmental Protection Agency, Headquarters

1200 Pennsylvania Avenue, NW

Mail Code 1103M

Washington, DC 20460-0001

Clerk [email protected]

Justin Valentino, Attorney Advisor

U.S. Environmental Protection Agency, Headquarters

2.2226 J, William Jefferson Clinton Building South

1200 Pennsylvania Avenue, N.W.
Washington, DC 20460

Mail Code 2242A

valentino. [email protected]

and

U.S. Environmental Protection Agency

Cincinnati Finance Center

Via electronic mail to:

CINWD_AcctsReceivable(@epa.gov

“Proof of payment” means, as applicable, a copy of the check, confirmation of credit card or debit card payment, or confirmation of wire or automated clearinghouse transfer, and any other information required to demonstrate that payment has been made according to EPA requirements, in the amount due, and identified with the appropriate docket number and Respondent’s name.

23. Interest, Charges, and Penalties on Late Payments. Pursuant to 42 U.S.C. § 7413(d)(5), 31
    U.S.C. § 3717, 31 C.F.R. § 901.9, and 40 C.F.R. § 13.11, if Respondent fails to timely pay any portion of the Assessed Penalty per this Agreement, the entire unpaid balance of the Assessed Penalty and all accrued interest shall become immediately due and owing, and the EPA is authorized to recover the following amounts. a. Interest. Interest begins to accrue from the Filing Date. If the Assessed Penalty is paid in full within thirty (30) days, interest accrued is waived. If the Assessed Penalty is not paid in full within thirty (30) days, interest will continue to accrue until any unpaid portion of the Assessed Penalty as well as any interest, penalties, and other charges are paid in full. Per 42 U.S.C. § 7524(c)(6), interest will be assessed pursuant to 26 U.S.C. § 6621(a)(2), that is the IRS standard underpayment rate, equal to the Federal short-term rate plus 3 percentage points. b. Handling Charges. The United States’ enforcement expenses including, but not limited to, attorneys’ fees and costs of handling collection. 5

c. Late Payment Penalty. A ten percent (10%) quarterly non-payment penalty.

24. Late Penalty Actions. In addition to the amounts described in the prior Paragraph, if
    Respondent fails to timely pay any portion of the Assessed Penalty per this Agreement, the EPA may take additional actions. Such actions the EPA may take include, but are not limited to, the following. a. Refer the debt to a credit reporting agency or a collection agency, per 40 C.F.R.
    §§ 13.13 and 13.14.
    b. Collect the debt by administrative offset (i.e., the withholding of money payable by the United States government to, or held by the United States government for, a person to satisfy the debt the person owes the United States government), which includes, but is not limited to, referral to the Internal Revenue Service for offset against income tax refunds, per 40 C.F.R. Part 13, Subparts C and H. c. Suspend or revoke Respondent’s licenses or other privileges, or suspend or disqualify Respondent from doing business with the EPA or engaging in programs the EPA sponsors or funds, per 40 C.F.R. § 13.17. d. Request that the Attorney General bring a civil action in the appropriate district court to enforce the Final Order and recover the full remaining balance of the Assessed Penalty, in addition to interest and the amounts described above, pursuant to 42 U.S.C. § 7413(d)(5). In any such action, the validity, amount, and appropriateness of the Assessed Penalty and Final Order shall not be subject to review.
25. Allocation of Payments. Pursuant to 31 C.F.R. § 901.9(f) and 40 C.F.R. § 13.11(d), a partial
    payment of debt will be applied first to outstanding handling charges, second to late penalty charges, third to accrued interest, and last to the principal that is the outstanding Assessed Penalty amount.
26. Tax Treatment of Penalties. Penalties, interest, and other charges paid pursuant to this
    Agreement shall not be deductible for purposes of federal taxes.
27. By signing this Agreement, Respondent certifies that the information it has supplied
    concerning this matter was at the time of submission true, accurate, and complete for each such submission, response, and statement. Respondent acknowledges that there are significant penalties for submitting false or misleading information, including the possibility of fines and imprisonment for knowing submission of such information, under 18 U.S.C.
    § 1001.
28. By signing this Agreement, Respondent acknowledges that this Agreement and Order,
    including identifying information such as name, federal tax ID number, mailing and e-mail address, will be available to the public when the Agreement and Certificate of Service are filed and uploaded to a searchable database and agrees that this Agreement does not contain

6

any confidential business information or other personally identifiable information.

29. By signing this Agreement, the undersigned representative of Complainant and the
    undersigned representative of Respondent each certify that they are fully authorized to execute and enter into the terms and conditions of this Agreement and has the legal capacity to bind the party they represent to this Agreement.
30. By signing this Agreement, Respondent agrees to acceptance of the Complainant’s: (a)
    digital or an original signature on this Agreement; and (b) service of the fully executed Agreement on the Respondent by mail or electronically by e-mail. Respondent understands that the mailing or e-mail address may be made public when the Agreement and Certificate of Service are filed and uploaded to a searchable database. Complainant agrees to acceptance of the Respondent’s digital or an original signature on this Agreement.

31. Each party shall bear its own attorney’s fees, costs, and disbursements incurred in this
    proceeding.
    E. EFFECT OF AGREEMENT AND ATTACHED FINAL ORDER

32. In accordance with 40 C.F.R. § 22.18(c), completion of the terms of this Agreement and
    Final Order resolves only Respondent's liability for federal civil penalties for the violation(s) identified in Section C of this Agreement.

33. This Agreement constitutes the entire agreement and understanding of the Parties and
    supersedes any prior agreements or understandings among the Parties with respect to the subject matter hereof.
34. The terms, conditions, and compliance requirements of this Agreement may not be modified
    or amended after it is ratified except upon the written agreement of both parties, and approval of the Environmental Appeals Board.
35. Any violation of this Agreement or Order may result in a civil judicial action for an
    injunction, or civil penalties of up to $124,426 per day per violation (with each kilogram a separate violation), or both, as provided in Section 113(b)(2) of the Act, 42 U.S.C.
    § 7413(b)(2), as well as criminal sanctions as provided in Section 113(c) of the Act, 42 U.S.C. § 7413(c). The EPA may use any information submitted under this Agreement in an administrative, civil judicial, or criminal action.
36. Nothing in this Agreement shall relieve Respondent of the duty to comply with all applicable
    provisions of the Act and other federal, state, or local laws or statutes, nor shall it restrict the EPA’s authority to seek compliance with any applicable laws or regulations, nor shall it be construed to be a ruling on, or determination of, any issue related to any federal, state, or local permit.

37. Nothing herein shall be construed to limit the power of the EPA to undertake any action
    against Respondent or any person in response to conditions that may present an imminent and substantial endangerment to the public health, welfare, or the environment. 7

38. The EPA reserves the right to revoke this Agreement and settlement penalty if and to the
    extent that the EPA finds, after signing this Agreement, that any information provided by Respondent was materially false or inaccurate at the time such information was provided to the EPA, and the EPA reserves the right to assess and collect any and all civil penalties for any violation described herein. The EPA shall give Respondent notice of its intent to revoke, which shall not be effective until received by Respondent.

39. Respondent and Complainant agree to the Environmental Appeals Board’s issuance of the
    attached Final Order ratifying the Agreement.
    8

The foregoing Agreement In the Matter of Florim USA, Inc., Docket No. CAA-2025-8713 is Hereby Stipulated, Agreed, and Approved. COMPLAINANT: MARY GREENE oitestos0s22 15539-0900" Signature Mary E. Greene, Director Air Enforcement Division Office of Civil Enforcement Office of Enforcement and Compliance Assurance U.S. Environmental Protection Agency

9

The foregoing Agreement In the Matter of Florim USA, Inc., Docket No. CAA-2025-8713, is Hereby Stipulated, Agreed, and Approved. FOR RESPONDENT: Signature —(i‘“‘™S™S~™S Date | Printed Name: tooo CO x) ( S ; Title: esi pen! £ ceO Address: “S00 WigeV/aTiwAc BWO Ccca4RKSuiuKR , TA 37690 Federal Tax Identification Number: 62- 143364 GO

10

EXPEDITED SETTLEMENT AGREEMENT ATTACHMENT
AMERICAN INNOVATION AND MANUFACTURING ACT
OFFSITE COMPLIANCE MONITORING ACTIVITY OR INSPECTION FACTS, ALLEGED VIOLATIONS, PENALTY, AND CORRECTIVE ACTION FORM

Port of Entry/Shipment Number(s):

4033 W Montague Ave. Charleston, SC

North Charleston, SC 29418 Entry # CDY-03572451

Person/Importer Name (“Respondent”) Inspector(s) Name(s) and Email Address: Christine Tokarz, [email protected]

62-143364000

Respondent Address: Date of Detention or Hold:

300 International Blvd. February 21, 2025
a iene

Subject HFC within the Regulated Subject Regulated Product:

Product(s) and Mass (in kg): Four (4) Aermec ANL-100HA heat

R-410A: charge of 12.7kg each exchangers

11

Table 2 — Description of Alleged Violation(s)

The EPA alleges that:

e Based on the facts in Table 1, the Subject Regulated Products are products containing regulated substances above the appropriate GWP limit for the subsector of the product, and that those products were imported into the United States, in violation of the Technology Transition regulations at 40 C.F.R. § 84.54(a)

Table 3 — Civil Penalty

Complainant and Respondent agree upon the following civil penalty for settlement

purposes: $17,487, where:

Technology Transitions Calculation:

Monetary Value of Goods * Percentage Multiplier = Penalty

$58,290 * 30% = $17,487
TT Product GWP! a
< 1,300 we

: | [so] =1528

5,000 < 10,000 HPC-143
10,000 < 15,000 HFC-32 (50%) 675
C-245¢ca
HFC-365mfe

IHF C—-245 fa 1,030

IHFC—134 1,100

IHF C-—236cb 1,340

IHFC—236ea 1,370

IHFC-134a 1,430

HF C-43—10mee 1,640
FC-143a
C-236fa 9.810

IHF C—23 14,800
| 40 CFR 84.64
12

Table 4 — Corrective Action

Respondent certifies that it:

has exported the Subject Regulated Products to_Florim Ceramiche S.p.A. SB VIA CANALETTO 41 FIORANO MODENESE 41042 Modena, MO Italy
[name and address (including country) of the recipient of the exports], a country other than Canada or Mexico (unless the point of entry to the U.S. for the Subject Regulated Products was through Canada or Mexico), and has paid
$[_ 4,262.24 | to perform the action to export the Subject Regulated Products. will submit to the EPA at [email protected], within thirty (30) days of the

Effective Date of the ESA a record documenting such payment for export of the Subject Regulated Products. Respondent must check the boxes, fill in all relevant blanks, and return any enclosures, as

applicable, and this Attachment 1 with the signed Agreement. CERTIFICATE OF SERVICE I certify that copies of the foregoing “Expedited Settlement Agreement” and “Final Order,” in the matter of Florim USA, Inc. Docket No. CAA-2025-8713 were sent to the following persons in the manner indicated: By Electronic Mail: Justin Valentino, Attorney Advisor Air Enforcement Division William Jefferson Clinton Building South 2.2226 J, 1200 Pennsylvania Avenue, N.W. Washington, DC 20460 [email protected] Rodolfo Panisi Florim USA, Inc. 300 International Blvd. Clarksville, TN 37040 [email protected]
=—_— . .
pate; May 27, 2025 Femme Whadeson
Tommie Madison
Clerk of the Board