The FTC has announced a new enforcement policy statement designed to put retailers who import textile products on the same footing as those who source textiles domestically or from US importers.
The Textile, Wool and Fur Labeling Acts require that garments be labeled with the fiber content, country of origin if imported and other requirements. The Acts allow for retailers to receive in good faith continuing or separate guarantees from foreign or domestic manufacturers assuring that the products are correctly labeled or promoted. Such guarantees give the retailers a “safe harbor” from the liability of false advertising.
Now the FTC has said it will not enforce against a retailer that directly imports such products unless they “knew or should have known” that the products were incorrectly labeled or promoted. There are some limits — a retailer will still be liable for products it markets as private label.
Also if the retailer embellishes or misrepresents information provided by the manufacturer in its advertising, liability will also attach. Of course, retailers may still want to obtain some type of written assurance from foreign suppliers, both for contractual purposes and also for use in potentially deflecting any argument that they “should have known” that the product was improperly labeled or marketed.
These acts are not subject to frequent enforcement but they do subject retailers to significant and expensive compliance obligations. This policy statement is a meaningful step forward to recognition of the global marketplace.
Is your company compliant? Need help in deciphering the law as it pertains to you? Jacoby Solutions can review your companies compliance plan and help you tailor your business operations to ensure you comply. Contact us to get started today!
Bill Jacoby is the founder principal at Jacoby Solutions and developed the CORE Audit™ (Compliance Operations Readiness Engagement Audit), the company’s proprietary approach to business operations readiness A one-stop shop for manufacturing and distribution companies in need of a solutions partner who can help them evolve their business while keeping an eye on compliance, Jacoby Solutions saves companies time, money and resources while helping them become CPSIA ready.
https://jacobysolutions.com/wp-content/uploads/2023/08/Jacobysolutions-300x150.jpg00BillJhttps://jacobysolutions.com/wp-content/uploads/2023/08/Jacobysolutions-300x150.jpgBillJ2013-01-15 11:16:502013-01-15 11:16:50New FTC Policy Statement on Labeling
In a recent article by Sarah Fang of Saiber LLC titled, “Baby steps: six steps to improving product liability risk management” Ms. Fang highlights the risks associated with the manufacture of products overseas. In the article, Ms. Fang points out that in 2012 the Consumer Product Safety Commission (CPSC) ordered the recall of over 312 products of which almost 52% were manufactured in China. Of those products recalled half were classified as children’s products with most of those having violations ranging from lead paint to burn and strangulation hazards.
The impact of these defective products is felt not only in the area of brand equity and customer loyalty or retention but also in the company’s bottom line. It was noted in the article that even a small loss in brand value, given the very large U.S. consumer market, can lead to large financial implications for the company. As noted in a study done by Bain & Co. on customer retention, customers will not remain loyal if the products they buy are defective. Legal expenses are impacted as well as the cost of defending a product liability claim in U.S. courts is very high.
The article goes on to lay out six areas where companies can mitigate and/or prevent defective products and improve product safety. Each of the steps happens to be associated with either regulations or rulings by the CPSC with regard to children’s products as found in the “Testing Pertaining to Product Certification Rule” as amended by 16 CFR Part 1107.
Ensure compliance with all code, statute, or product regulations. As it is with most of the product regulations the CPSC oversees, the expectation is that the manufacturer knows what rules; bans or standards apply to their product and will have tested the product accordingly before it enters the stream of commerce in the U.S. The CPSC also requires that any mandatory testing be done by one of their accredited laboratories which can now be found in most major overseas production centers around the world. This initial certification of the product is done so that the manufacturer may issue a Certificate of Conformity or a Children’s Product Certificate (CPC) which is a statement from the manufacturer that the product conforms to all applicable rules, bans or standards that would apply. The Product Certification Rule goes one step further in requiring the manufacturer to submit a “representative samples” of the product for testing. The numbers of samples to be submitted is based on the manufacturing process and the total number of products produced in that particular lot, batch or production run. If any of the samples submitted were to fail a safety standard then it would be deemed that the whole lot, batch or production run is not compliant. The manufacturer would then need to take the steps needed to investigate and document the failure and submit new samples for re-testing.
Proper documentation and record retention. The ruling requires manufacturers to keep the following documents (either electronically or in hardcopy) for each children’s product for five years from the date of production; (a) a copy of the Children’s Product Certificate, (b) records of each third party certification test for each manufacturing site, (c) records of testing plans, actual testing and/or results, as applicable, (d) records of the number of representative samples selected for periodic testing and the procedure used to select them, the testing conducted on those samples, and the basis for inferring compliance from the results of those tested samples, (e) records of and descriptions of all material changes in the product, (f) records of the undue influence procedures implemented by the manufacturer including training materials and employee attestations.
Properly manage any and all outsourcing for quality. Manufactures that rely on third party component suppliers or foreign manufacture finished good suppliers may us the testing or certifications from these suppliers to issue certificates for the finished product. However the manufacturer must exercise “due care” in accepting these certificate or finished product testing to ensure that all the proper testing has been done and that it was completed by a CPSC accredited laboratory. Additionally the requirement of sufficient or “representative samples” must be documented along with any initial testing failures and the remedy of those failures.
Contract management. Manufacturers must carefully draft a proper contract and purchase order that reflect all of the additional documentation and recordkeeping associated with the new periodic testing rule when dealing with both foreign and domestic suppliers, especially if relying on supplier certificates or third-party testing reports for product compliance.
Proper training. Manufacturers must have a “written statement” by company officials that; states that the exercise of undue influence on third-party laboratories is unacceptable and directs every “appropriate staff member” to receive training on avoiding undue influence. In addition each staff member that goes through such training must sign a statement attesting to participation in the training. Manufacturers must also inform employees that allegations of undue influence may be confidentially reported to the CPSC and provide a description of the manner in which such a report can be made. Manufacturers are required to retrain staff members if there are any changes in the CPSC’s undue influence requirements.
Monitoring product performance. The new rule requires manufacturers to retest its production batch any time a “material change” has been made that could impact the products continued compliance to the applicable safety rules. Material change could include such things as; changes in the production design, the manufacturing process, the sourcing of a component part (change in supplier) or the component part itself.
Jacoby Solutions offers Compliance “On Demand” consulting to help small companies deal with their compliance and business operations. Please contact us at 484-885-0707 or email us …. info@jacobysolutions.com for more information.
https://jacobysolutions.com/wp-content/uploads/2023/08/Jacobysolutions-300x150.jpg00BillJhttps://jacobysolutions.com/wp-content/uploads/2023/08/Jacobysolutions-300x150.jpgBillJ2013-01-14 14:46:452013-01-14 14:46:45Baby Steps: Six steps to improving product liability risk management
As an importer who relies on my overseas manufacturer to test the product before shipping to the US, how would I demonstrate what the CPSC calls “due care” with regard to the periodic testing rule?
There are several approaches that may serve as evidence of due care by an importer to ensure that a foreign manufacturer who has provided a testing certification for product, conducts periodic testing as specified in the final rule.
First, the requirement should be specified in the importer’s purchase order to the foreign manufacturer, clearly communicating the requirement to conduct the required periodic testing and requiring submission of the foreign manufacturer’s periodic testing plan, production testing plan, or the results of continued testing using an ISO/IEC 17025:2005 -accredited lab.
Second, an importer may need to conduct occasional site visits to his supplier’s manufacturing facility to examine evidence that the required periodic testing has been properly performed. Simply reviewing the foreign manufacturer’s periodic testing plan or production testing plan may not satisfy the requirement, without further evidence that the plans were actually implemented. (Think Audit of Factories)
Third, an importer may need to verify the authenticity of the supplier’s test reports by contacting the testing laboratory for verification of the testing or have the test report reviewed by another party.
Fourth, an importer may also wish to occasionally submit samples from products received from the supplier for testing, to compare the test results to those conducted by the foreign manufacturer
For more information regarding your companies compliance with CPSIA, contact Jacoby Solutions today. We can help!
The purpose of periodic testing is to ensure the compliance of continued production of a children’s product to all the product safety rules it was first certified for. The CPSC defines periodic testing in their FAQ as, “The general principle set forth in the regulation is that you, as the manufacturer, must have a periodic testing plan and conduct periodic testing (using a CPSC-accepted laboratory) at least once per year.”
Previously tested children’s products or component parts of children’s products do not require periodic testing. If the children’s product or component part of a children’s product was sampled and tested for certification purposes, those test reports remain valid for the remainder of that particular lot or batch of the children’s product or component part of the children’s product.
Continued production or importation of the same children’s product or component part of a children’s product (assuming no material changes that would require re-certification) are subject to the periodic testing requirement.
If a manufacturer/importer of record conducted certification testing on each new lot or batch of a children’s product or component part of a children’s product, that testing would constitute recertification of the finished product or component part and therefore periodic testing requirements would not apply.
Based on the final rule of 16 CFR Part 1107, continuing production of a children’s product or component part of a children’s product would have to select either a representative sample or random sample technique(s) for periodic testing purposes.
https://jacobysolutions.com/wp-content/uploads/2023/08/Jacobysolutions-300x150.jpg00BillJhttps://jacobysolutions.com/wp-content/uploads/2023/08/Jacobysolutions-300x150.jpgBillJ2012-12-28 11:27:402012-12-28 11:27:40What is the purpose of periodic testing? (Based on 16 CFR Part 1107)
Can I use a software program or website to conduct the training needed to satisfy the “undue influence” requirement within the Testing and Labeling Pertaining to Product Certification rule or does it have to be in person?
Manufacturers are required under 16 CFR § 1107.24(b)(1) to make sure “that every appropriate staff member receive training on avoiding undue influence and sign a statement attesting to participation in such testing.” The CPSC has stated that a digital signature or other electronic attestation (such as a check box) that an employee took the training included as part of software or online training would meet the requirement to “sign a statement attesting.”
Here is the essence of what the final rule (16 CFR Part 1107, Testing and Labeling Pertaining to Product Certification Regarding Representative Samples for Periodic Testing of Children’s Products) says.
In order to ensure continued compliance of children’s products produced, the Commission has taken the approach of requiring the manufacturer/importer of record to have knowledge of how tested product samples are similar to untested product samples.
The manufacturer/importer of record can demonstrate this knowledge by; results from prior testing (product has been tested several times with no issues of non-compliance), detailed knowledge of the product itself (in design and material sourcing), the production processes used in the manufacture of the product, the quality control processes used in the production of the product and the production testing plan for the product (testing done at the manufacture site to ensure continued compliance of the product).
So long as the manufacturer/importer of record has a rational basis for demonstrating the similarity of the untested product samples to the tested product samples and documents this rational, then the manufacturer/importer of record is said to have met the requirements in the final rule.
Numerous times the Commission has stated that manufacturers/importers of record are required to know about their products and the manufacturing processes used and implement a testing program accordingly which includes the ability to provide a basis for inferring the compliance of the tested product samples to the untested product samples. Without this basis the testing done by the manufacturers/importers of record on their products would serve no purpose other than to demonstrate the compliance of the tested product samples and not the entire population of product samples.
Manufacturers/importers of record can use “process” to show that the product samples selected for testing are like the untested product samples. For example, a process that manages the lots or batches of raw materials used in the manufacture of children’s products (like surface coatings or resins) can be used as a basis to demonstrate the homogeneity of the population of products with regard to chemical testing for lead and phthalates.
Another example would be a process that creates uniformly spaced holes in the crib rails for the uniformly constructed crib slats which can be used as a basis to demonstrate the homogeneity of the population of products with regard to the component spacing test of ASTM f1169-10.
Without this documented basis, mere testing alone is not sufficient to infer compliance of the untested product samples and as such would not meet the minimum due care requirements of 16 CFR Part 1107.
https://jacobysolutions.com/wp-content/uploads/2023/08/Jacobysolutions-300x150.jpg00BillJhttps://jacobysolutions.com/wp-content/uploads/2023/08/Jacobysolutions-300x150.jpgBillJ2012-12-26 09:51:172012-12-26 09:51:1716CFR Part 1107 will be in effect soon
New FTC Policy Statement on Labeling
/in Posts/by BillJThe FTC has announced a new enforcement policy statement designed to put retailers who import textile products on the same footing as those who source textiles domestically or from US importers.
The Textile, Wool and Fur Labeling Acts require that garments be labeled with the fiber content, country of origin if imported and other requirements. The Acts allow for retailers to receive in good faith continuing or separate guarantees from foreign or domestic manufacturers assuring that the products are correctly labeled or promoted. Such guarantees give the retailers a “safe harbor” from the liability of false advertising.
Now the FTC has said it will not enforce against a retailer that directly imports such products unless they “knew or should have known” that the products were incorrectly labeled or promoted. There are some limits — a retailer will still be liable for products it markets as private label.
Also if the retailer embellishes or misrepresents information provided by the manufacturer in its advertising, liability will also attach. Of course, retailers may still want to obtain some type of written assurance from foreign suppliers, both for contractual purposes and also for use in potentially deflecting any argument that they “should have known” that the product was improperly labeled or marketed.
These acts are not subject to frequent enforcement but they do subject retailers to significant and expensive compliance obligations. This policy statement is a meaningful step forward to recognition of the global marketplace.
Is your company compliant? Need help in deciphering the law as it pertains to you? Jacoby Solutions can review your companies compliance plan and help you tailor your business operations to ensure you comply. Contact us to get started today!
Bill Jacoby is the founder principal at Jacoby Solutions and developed the CORE Audit™ (Compliance Operations Readiness Engagement Audit), the company’s proprietary approach to business operations readiness A one-stop shop for manufacturing and distribution companies in need of a solutions partner who can help them evolve their business while keeping an eye on compliance, Jacoby Solutions saves companies time, money and resources while helping them become CPSIA ready.
Baby Steps: Six steps to improving product liability risk management
/in Posts/by BillJIn a recent article by Sarah Fang of Saiber LLC titled, “Baby steps: six steps to improving product liability risk management” Ms. Fang highlights the risks associated with the manufacture of products overseas. In the article, Ms. Fang points out that in 2012 the Consumer Product Safety Commission (CPSC) ordered the recall of over 312 products of which almost 52% were manufactured in China. Of those products recalled half were classified as children’s products with most of those having violations ranging from lead paint to burn and strangulation hazards.
The impact of these defective products is felt not only in the area of brand equity and customer loyalty or retention but also in the company’s bottom line. It was noted in the article that even a small loss in brand value, given the very large U.S. consumer market, can lead to large financial implications for the company. As noted in a study done by Bain & Co. on customer retention, customers will not remain loyal if the products they buy are defective. Legal expenses are impacted as well as the cost of defending a product liability claim in U.S. courts is very high.
The article goes on to lay out six areas where companies can mitigate and/or prevent defective products and improve product safety. Each of the steps happens to be associated with either regulations or rulings by the CPSC with regard to children’s products as found in the “Testing Pertaining to Product Certification Rule” as amended by 16 CFR Part 1107.
Demonstrating what the CPSC calls “due care” with regard to the periodic testing rule
/in Posts/by BillJAs an importer who relies on my overseas manufacturer to test the product before shipping to the US, how would I demonstrate what the CPSC calls “due care” with regard to the periodic testing rule?
There are several approaches that may serve as evidence of due care by an importer to ensure that a foreign manufacturer who has provided a testing certification for product, conducts periodic testing as specified in the final rule.
First, the requirement should be specified in the importer’s purchase order to the foreign manufacturer, clearly communicating the requirement to conduct the required periodic testing and requiring submission of the foreign manufacturer’s periodic testing plan, production testing plan, or the results of continued testing using an ISO/IEC 17025:2005 -accredited lab.
Second, an importer may need to conduct occasional site visits to his supplier’s manufacturing facility to examine evidence that the required periodic testing has been properly performed. Simply reviewing the foreign manufacturer’s periodic testing plan or production testing plan may not satisfy the requirement, without further evidence that the plans were actually implemented. (Think Audit of Factories)
Third, an importer may need to verify the authenticity of the supplier’s test reports by contacting the testing laboratory for verification of the testing or have the test report reviewed by another party.
Fourth, an importer may also wish to occasionally submit samples from products received from the supplier for testing, to compare the test results to those conducted by the foreign manufacturer
For more information regarding your companies compliance with CPSIA, contact Jacoby Solutions today. We can help!
What is the purpose of periodic testing? (Based on 16 CFR Part 1107)
/in Posts/by BillJThe purpose of periodic testing is to ensure the compliance of continued production of a children’s product to all the product safety rules it was first certified for. The CPSC defines periodic testing in their FAQ as, “The general principle set forth in the regulation is that you, as the manufacturer, must have a periodic testing plan and conduct periodic testing (using a CPSC-accepted laboratory) at least once per year.”
Previously tested children’s products or component parts of children’s products do not require periodic testing. If the children’s product or component part of a children’s product was sampled and tested for certification purposes, those test reports remain valid for the remainder of that particular lot or batch of the children’s product or component part of the children’s product.
Continued production or importation of the same children’s product or component part of a children’s product (assuming no material changes that would require re-certification) are subject to the periodic testing requirement.
If a manufacturer/importer of record conducted certification testing on each new lot or batch of a children’s product or component part of a children’s product, that testing would constitute recertification of the finished product or component part and therefore periodic testing requirements would not apply.
Based on the final rule of 16 CFR Part 1107, continuing production of a children’s product or component part of a children’s product would have to select either a representative sample or random sample technique(s) for periodic testing purposes.
Conducting Undue Influence Training
/in Posts/by BillJCan I use a software program or website to conduct the training needed to satisfy the “undue influence” requirement within the Testing and Labeling Pertaining to Product Certification rule or does it have to be in person?
Manufacturers are required under 16 CFR § 1107.24(b)(1) to make sure “that every appropriate staff member receive training on avoiding undue influence and sign a statement attesting to participation in such testing.” The CPSC has stated that a digital signature or other electronic attestation (such as a check box) that an employee took the training included as part of software or online training would meet the requirement to “sign a statement attesting.”
Need help with Undue Influence training. please contact us today as Jacoby Solutions can help you meet this requirement!
16CFR Part 1107 will be in effect soon
/in Posts/by BillJHere is the essence of what the final rule (16 CFR Part 1107, Testing and Labeling Pertaining to Product Certification Regarding Representative Samples for Periodic Testing of Children’s Products) says.
In order to ensure continued compliance of children’s products produced, the Commission has taken the approach of requiring the manufacturer/importer of record to have knowledge of how tested product samples are similar to untested product samples.
The manufacturer/importer of record can demonstrate this knowledge by; results from prior testing (product has been tested several times with no issues of non-compliance), detailed knowledge of the product itself (in design and material sourcing), the production processes used in the manufacture of the product, the quality control processes used in the production of the product and the production testing plan for the product (testing done at the manufacture site to ensure continued compliance of the product).
So long as the manufacturer/importer of record has a rational basis for demonstrating the similarity of the untested product samples to the tested product samples and documents this rational, then the manufacturer/importer of record is said to have met the requirements in the final rule.
Numerous times the Commission has stated that manufacturers/importers of record are required to know about their products and the manufacturing processes used and implement a testing program accordingly which includes the ability to provide a basis for inferring the compliance of the tested product samples to the untested product samples. Without this basis the testing done by the manufacturers/importers of record on their products would serve no purpose other than to demonstrate the compliance of the tested product samples and not the entire population of product samples.
Manufacturers/importers of record can use “process” to show that the product samples selected for testing are like the untested product samples. For example, a process that manages the lots or batches of raw materials used in the manufacture of children’s products (like surface coatings or resins) can be used as a basis to demonstrate the homogeneity of the population of products with regard to chemical testing for lead and phthalates.
Another example would be a process that creates uniformly spaced holes in the crib rails for the uniformly constructed crib slats which can be used as a basis to demonstrate the homogeneity of the population of products with regard to the component spacing test of ASTM f1169-10.
Without this documented basis, mere testing alone is not sufficient to infer compliance of the untested product samples and as such would not meet the minimum due care requirements of 16 CFR Part 1107.