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Kolcraft Agrees to $400,000 Civil Penalty, Significant Internal Compliance Improvements for Failure to Report Defective Play Yards

March 12, 2013/in Uncategorized/by BillJ

WASHINGTON, D.C. – The U.S. Consumer Product Safety Commission (CPSC) announced today that Kolcraft Enterprises Inc., of Chicago, has agreed to pay a civil penalty in the amount of $400,000.

The penalty agreement has been accepted provisionally by the Commission in a 2-1 vote. Commissioner Nord voted to provisionally accept the agreement as originally drafted. Chairman Tenenbaum and Commissioner Adler voted to provisionally accept the agreement with amendments which were included in the final agreement.

In addition to paying a monetary penalty, Kolcraft agrees to implement robust changes to its internal control and compliance systems. Specifically, Kolcraft agrees to:

maintain and enforce a system of internal controls and procedures to ensure that the company promptly and accurately reports required information about its products to CPSC;
give CPSC staff written documentation of its improvements, processes, and controls related to its reporting procedures upon request;
and establish an effective program to ensure it remains in compliance with safety statutes and regulations enforced by CPSC.

Kolcraft agrees that, at a minimum, its compliance program must provide its employees with written standards and policies, compliance training, and the means to report compliance-related concerns confidentially.

The settlement resolves CPSC staff allegations that the firm knowingly failed to report to CPSC immediately, as required by federal law, a defect involving Kolcraft Travelin’ Tot play yards and play yards manufactured by Kolcraft for Carter’s, Sesame Street, Jeep, Contours, Care Bare, and Eric Carle. The play yards were sold nationwide from January 2000 through January 2009 for between $50 and $160. The side rail of the play yards can fail to latch properly and can unlatch unexpectedly when a child pushes against it, posing a fall hazard to children.

In August 2005, failure analysis experts hired by the firm identified the potential for false latching. In 2006, the firm made prospective improvements to the warning labels, instruction sheets, and the side-rail latch to eliminate false latching in future production of the play yards.

From about January 2000 through July 2009, Kolcraft received about 350 reports of the play yard collapsing, resulting in 21 injuries to young children, including bumps, scrapes, bruises, and one concussion.

Kolcraft did not report the information regarding the play yards to CPSC until January 2009.

In July 2009, Kolcraft and CPSC announced the recall of one million play yards.

Federal law requires manufacturers, distributors, and retailers to report to CPSC immediately (within 24 hours) after obtaining information reasonably supporting the conclusion that a product contains a defect which could create a substantial product hazard, creates an unreasonable risk of serious injury or death, or fails to comply with any consumer product safety rule or any other rule, regulation, standard, or ban enforced by CPSC.

In agreeing to the settlement, Kolcraft denies CPSC staff allegations that its play yards contained a defect which could create a substantial product hazard, or that it knowingly violated the reporting requirements of the Consumer Product Safety Act. Pursuant to the Consumer Product Safety Act, CPSC must consider the appropriateness of the penalty in relation to the size of the business of the person charged, including how to address undue adverse economic impacts on small businesses. Kolcraft is a small business as set forth in the Small Business Administration guidelines regarding size of business.

CPSC Approves New Lead Testing Method in Substrates of Children’s Products

February 25, 2013/in CPSC, News/by BillJ

Feb 25, 2013

The U.S. Consumer Product Safety Commission (CPSC) has approved High-Definition X-Ray Fluorescence (HDXRF) technology for the substrate testing of lead in children’s products using the test method ASTM F2853-10. HDXRF technology, used to detect regulated elements, had previously been approved by the CPSC for testing of lead in paint and other surface coatings of children’s products.

This new action by the CPSC expands the use of HDXRF for third-party testing to support product certification and clears the way for its use in “production testing” under the new CPSC Testing and Certification Rule, which became effective February 8, 2013. HDXRF offers the additional benefits of taking coating and substrate measurements simultaneously and non-destructively, reducing testing time and cost.

“The CSPC’s approval of HDXRF for lead in substrate testing means that manufacturers, importers, retailers and laboratories now have a complete, precise, and reliable alternative to traditional wet chemistry,” said Satbir Nayar, director of sales and marketing for consumer products of XOS, a developer of the HDXRF technique.

The detailed new CPSC regulation, called the 1112 Rule, approving HDXRF for lead in substrate testing and restating the agency’s April 2011 approval of HDXRF for lead in paint testing, can be accessed atwww.cpsc.gov.

Top CPSC Developments to Watch for in 2013

February 7, 2013/in Posts/by BillJ

The Fiscal Year (FY) 2013 Operating Budget for the Consumer Product Safety Commission (CPSC) has some items that are likely to make either the biggest or most news in the coming year. They are the CPSC’s compliance, import surveillance and hazard identification activity.

Compliance: Enforcement activities under the rulemaking of the Consumer Product Safety Improvement Act of 2008 (CPSIA) will be stepped up. These compliance efforts will include; data analysis, investigations and assessing the level of compliance with new regulations. The 2013 budget targets compliance and enforcement programs for;

CPSIA-mandated requirements for cribs, toddler beds, play yards, bed rails, strollers, and swings
Federal Hazardous Substances Act regulations for toys, bath seats, rattles, pacifiers and infant pillows

Import Surveillance: With the passage of the CPSIA, the CPSC was directed to create an International Trade Data System/Risk Assessment Methodology (ITDS/RAM) to help identify products entering into the U.S. that have a high probability for violation of consumer product safety rules and regulations. Based on this the CPSC launched a “proof-of-concept” pilot program that uses data collected at the port by U.S. Customs and Border Protection’s (CBP) International Trade Data System, and integrates the data with CPSC surveillance systems to analyze incoming imports. Imports which are identified as “high risk” are targeted based on predetermined rule sets and stopped at the port for inspection. In 2013, this pilot program is expected to expand to 15 major U.S. ports. The CPSC has established four areas for measuring successes with the program;

Improve import surveillance targeting effectiveness
Facilitate legitimate trade
Improve working effectiveness with CBP to harness existing federal port resources in the interdiction of noncompliant consumer product imports
Protect U.S. intellectual property, consistent with the CPSC’s safety mission

The CPSC is expected to continue its collaboration with the CBP to implement national operations designed to optimize the federal government’s response to product’s that are imported into the U.S. that may put consumers at risk.

Another indication of this collaboration is the rewrite of 16 CFR 1110 which lays out the requirements for manufacturers/importers of record with regard to certificates of conformity (children’s and non-children’s products). Currently there is not a requirement for children’s product importers to file a certificate with the CBP or CPSC prior to the product entering into the U.S. The importer would only have to have the certificate “available upon request” to either the CBP or the CPSC. The proposed change would require the importer to electronically file a children’s product certificate with the CBP prior to the product entering into the U.S. as part of their importation documents.

Hazard Identification: In 2013, the CPSC will prepare draft final rules for the following products;

Bassinets
Bassinet attachments to play yards
Bedside sleepers
Handheld carriers
Soft infant carriers
Strollers

The CPSC will also prepare draft final rules for; rare earth magnet sets, mattresses and toy guns with caps. In addition draft rules will be prepared for infant slings, infant inclined sleep products, revisions to the FHSA definition of “strong sensitizer” and a petition for crib bumpers will be evaluated.

Voluntary Standards: The following voluntary standards are expected to have the most activity in 2013;

Baby monitors
Bassinets/cradles
Bath seats (infant)
Batteries
Bed rails
Bunk beds
Beds (toddler)
Bedside sleepers
Bicycles
Booster seats
High chairs
Youth chairs
Changing tables
Children’s metal jewelry
Full-size cribs
Non-full-size cribs/play yards
Infant bedding/accessories
Infant bouncers
Infant carriers (frame)
Infant carriers (handheld)
Infant carriers (soft)
Infant gates
Infant recline sleep products
Infant slings
Infant swings
Infant tubs
Infant walkers
Inflatable play devices
Phthalates
Playground equipment (for children under 2 years)
Playground equipment (home)
Strollers
Toys
Trampolines

Strategic Goals for Commitment to Prevention include;

Office	Performance Measurement	FY2013 Target
Hazard	Number of Voluntary standards activities supported or monitored by CPSC Staff	69
Hazard	Number of candidates for rulemaking prepared for Commission consideration	30
Compliance	Number of establishment inspections conducted by Field Staff	1,000
Compliance	Percentage of products screened by CPSC Field Staff resulting in violations	Baseline to be determined
Hazard	Number of items/component parts tested for specific standards and regulations	36,000
Import	Number of import examinations	13,000
Import	Sample yield per 100 import entries	26
Import	Establish a robust ITDS/RAM rule set to target intellectual property violations where a health and safety hazard is suspected in consumer product imports	To be determined
Compliance	Total number of products screened by CPSC Staff	Baseline to be determined
Compliance	Number of consumer products screened by CPSC Field Staff through Internet surveillance activities	Baseline to be determined

Additional Items: The Commission has added the following items to the FY 2013 budget which is targeted at reducing the testing burden by manufacturers and/or importers of record for children’s products;

Determinations Regarding Heavy Metals – the Commission would like to undertake the process of determining if there are materials that would qualify for exemption to the heavy metals specification found in section 4.3.5 of ASTM F963-11. The materials cannot be found to contain higher than allowed concentrations of the eight heavy metals.
Determinations Regarding Phthalates – the Commission would like to undertake the process of determining if there are materials that do not, and will not, contain prohibited phthalates, and would therefore be exempt from third party testing
Determination Regarding Adhesives in Manufactured Woods – the Commission would like to undertake the process of determining if there are any adhesives used in manufactured wood that can be determined not to contain lead in amounts above 100 ppm.

Need Help with CPSIA Compliance? Call us today to see how we can help you ensure that you Are CPSIA Ready!

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CPSC Updates from Small Business Ombudsman

February 7, 2013/in CPSC/by BillJ

Dear CPSC Small Business Community,

In this post, please find a list of recent CPSC news, regulatory updates, and other activities that may be of interest to you.

Periodic Testing Requirements

On this Friday, February 8, 2013, a new regulation that requires the periodic testing of continuing production of children’s products becomes effective. The regulation is 16 CFR part 1107. We have posted some new information and FAQs at the following Web page:

http://www.cpsc.gov/periodic-testing NEW!

Please note that we are currently reorganizing the testing and certification pages during the transition to a new CPSC.gov website. Further updates, information, and FAQs about third party testing and certification will be coming soon.

CPSC.gov Website

You may have noticed that CPSC recently redesigned its website to provide a better user experience for stakeholders. With the migration to the new website, some users have reported difficulty finding certain resources. We appreciate your patience as we fix the new website’s nits and ask you to report problems at: http://www.cpsc.gov/cgibin/epifeedback.aspx.

Upcoming Presentations

New York, NY – Monday, February 11, 2013: General CPSIA Presentation

26 Federal Plaza, Downtown Manhattan, Conference Room A, 6^th Floor, 2 pm

I will be speaking to any interested small business in the metropolitan New York City area this coming Monday. The presentation will be an overview of U.S. regulatory requirements for consumer products (including children’s products) and will also explain the requirements and benefits of registering as a small batch manufacturer with CPSC. The presentation will include a discussion of third party testing requirements, including periodic testing requirements.

The presentation is free and open to the public. Advance registration is requested (but not required) to ensure adequate seating. The presentation will take place in Conference Room A at the Federal Plaza Conference Center located at 26 Federal Plaza, which is at the southeast corner of Worth Street and Broadway in downtown Manhattan. Please allow approximately 30 minutes to get through security and arrive to the 6^th floor. There also is a café on the 6^th floor. You may contact me at ncohen@cpsc.gov with any questions and to RSVP.

New York, NY – Tuesday, February 12, 2013: Presentation on Third Party Testing

Jakob K. Javits Convention Center, Room 1E19, 10 am

I will be speaking to attendees at the New York International Toy Fair this coming Tuesday. The presentation was requested by the Toy Industry Association and addresses the U.S. third party testing requirements for toy manufacturers, including periodic testing requirements. CPSC Chairman Inez Tenenbaum will be the keynote speaker at 9 am.

You may also contact me at ncohen@cpsc.gov with any questions or to schedule a time to speak individually. More details about this presentation are available here: http://www2.toyassociation.org/AM/Template.cfm?Section=tf_Home&TEMPLATE=/CM/ContentDisplay.cfm&CONTENTID=18494.

Washington, DC – Thursday, February 28, 2013: Panel on Third Party Testing

Hyatt Regency Crystal City at Reagan National Airport, Room TBD, 1:45 pm; 3:30 pm

I will be moderating a panel for attendees on Day 3 (“CPSC Day”) of the International Consumer Product Health and Safety Organization (ICPHSO) conference. The panel will address third party testing, including the periodic testing requirements. More information, including the list of CPSC panelists, is available here: http://www.icphso.org/conference/2013annual/agenda.html.

Regulatory Update:

Newly proposed regulations are open for public comment and recently enacted regulations are set to go into effect. If you have never commented on a rule before, you can learn more about the rulemaking process and how you can add your comments to the proposed rule before it is finalized. Your comments are vital to ensuring that the Commission has as much information as possible as the Commissioners consider whether to finalize proposed rules into law.

New Regulations: Effective Dates for Compliance

Cribs – The crib standards went into effect for all new cribs sold on or after June 28, 2011. Child care providers, family child care homes, places of public accommodation (e.g. hotels), and crib rental companies were given until December 28, 2012 to ensure that their cribs comply with the new regulations. Please see our Crib Information Center for more information tailored to child care providers to enable you to determine if your cribs comply: www.cpsc.gov/cribs.

Play Yards –The new play yard regulation was published on August 29, 2012 and has an effective date of February 28, 2013. It is codified at 16 CFR Part 1221.

Infant Swings –The new infant swing regulation was published on November 7, 2012 and has an effective date of May 7, 2013. It is codified at 16 CFR Part 1223.

Reducing Third Party Testing Burdens – In October, the Commission voted to direct the CPSC staff to study possible options for reducing the burdens related to third party testing. Such studies would be subject to staff resource availability. The results and the Commissioners’ statements are available at: http://www.cpsc.gov/PageFiles/130209/3rdparty.pdf.

In January, the Commission voted to direct the staff to draft “Requests for Information” (RFIs) on four possible burden reduction options to be included in CPSC’s 2013 operating plan. The four areas about which the Commission will gather information concern: heavy metal content in certain materials, phthalates in certain materials, and lead content in synthetic food additives and adhesives used in manufactured woods. See the Commission’s action at: http://www.cpsc.gov/PageFiles/139100/2013operatingplan.pdf.

Representative Samples – On December 5, 2012, the Commission finalized its rule on ensuring the use of representative samples used in third party testing. The rule also has an effective date of February 8, 2013. You can learn more here.

Open For Public Comment (Selected items)

Hand-Held Infant Carriers – The Commission voted to publish a draft final rule for a new Safety Standard for Hand-Held Infant Carriers. The proposed rule was published December 10, 2012 and public comments are due by 11:59 pm on February 25, 2013. You can watch the staff presentation in archived format here and comment here.

Bedside Sleepers – After a recent staff briefing, the Commission voted to publish a draft final rule for a new Safety Standard for Bedside Sleepers. The proposed rule was published December 10, 2012 and public comments are due by 11:59 pm on February 25, 2013. You can watch the staff presentation in archived format here and comment here.

Comment Period Recently Closed

Bassinets and Cradles – The public comment period for a Supplemental Notice of Proposed Rulemaking for a Safety Standard for Bassinets and Cradles recently closed on January 2, 2013. The Commission staff is currently evaluating the comments received.

Make sure to get your products into compliance before the new regulations become effective, which has generally been about six months after the final regulations are published.

Small Batch Manufacturers:

PLEASE NOTE that if you were a registered small batch manufacturer with the U.S. Consumer Product Safety Commission (CPSC) for calendar year 2012 and you wish to continue in this status, you must register for calendar year 2013. Registration must be submitted annually. Registration is ongoing, and you may register at any time during this calendar year – through December 2013.

If you wish to register as a small batch manufacturer for calendar year 2013, your registration must be based upon the total number of product units sold and the total gross revenues from the sales of all consumer products in the previous calendar year – January 1, 2012 through December 31, 2012. If you meet these requirements, you may now register for calendar year 2013 by logging into your user account in the Business Portal at: www.SaferProducts.gov.

When you log in to your account at: www.SaferProducts.gov and you click the “Small Batch Manufacturer” tab with your cursor, you will be asked to attest that your company satisfies the criteria to register; the criteria are the same as last year and have only been updated to account for your company’s sales in calendar year 2012. Once you are certain that you can attest to the truth and accuracy of the statements for your sales in calendar year 2012, you may check the boxes and submit your registration. Within the next day or so, you will receive a confirmation e-mail message with your new, unique Small Batch Manufacturer Registration Number for 2013. *Please save that e-mail message for your reference.* If you do not yet know whether you will qualify as a small batch manufacturer based on sales through December 2012, please wait to register until you have full information regarding your sales numbers. Registration is ongoing, and you may register at any time during this calendar year – through December 2013.

Please note that when you log in to your account after your registration for calendar year 2013 is accepted, your Business Portal account will display your unique Small Batch Manufacturer Registration Number for both calendar years 2012 and 2013. Please use the appropriate number (based on the date of your product’s manufacture or final assembly) in drafting your Children’s Product Certificate.

If you have any questions or require assistance with the registration process, please e-mail: clearinghouse@cpsc.gov.

If you have any questions about how registration as a small batch manufacturer with the CPSC affects your obligations to test and certify your products as compliant with applicable consumer product safety rules or compliance with other CPSC rules, regulations, standards, or bans, please review the program information at: www.cpsc.gov/smallbatch. If you need further assistance, please e-mail me at: ncohen@cpsc.gov.

As always, please let me know if you have additional questions or concerns. We post updates – especially about regulation comment periods – frequently to our Twitter account at www.twitter.com/CPSCSmallBiz.

Best regards,

Neal

Neal S. Cohen

Small Business Ombudsman

U.S. Consumer Product Safety Commission

Tel: 301.504.7504

ncohen@cpsc.gov

www.cpsc.gov/smallbiz

www.cpsc.gov/gettingstarted

Connect With Us On:

Twitter (@CPSCSmallBiz)

New Year, New Rules: Consumer Product Contacts Safety Commission (CPSC) Safety Testing and Certification Rules Taking Effect for Children’s Products

February 1, 2013/in CPSC/by BillJ

In an advisory issued by the law firm of Arnold & Porter LLP, they highlight the new testing and certification rules coming into effect February 8, 2013 for manufacturers and importers of children’s products. The two rules; 16 C.F.R. Part 1109 (effective December 2011), which permits certification of the product by relying on component part testing or another party’s finished product testing and 16 C.F.R. Part 1107, which outlines the additional requirements concerning certification and ongoing testing and labeling of children’s products. They summarized the key provisions of these regulations which have been discussed previously in this blog.

Third Party Testing for Certification (§1107.20) – the initial certification must be based on a “sufficient number of samples” that are “identical in all material respects” to a third party laboratory that is accredited by the CPSC to do the testing for initial product certification. If any of the samples submitted fails certification testing then the failure must be investigated by the manufacturer/importer of record and corrective action must be taken and documented before additional samples are re-submitted for testing and certification.
Periodic Testing (§1107.21) – after the initial certification of the product, periodic testing of the product must continue as long as it is in production. The test plan selected by the manufacturer/importer of record can either be; periodic testing plan (at least once per year), production testing plan (at least once every two years) or ISO 17025 testing plan (at least once every three years). The type of testing plan chosen will depend on several factors and must be done for each manufacturing site.
Material Change (§1107.23) – any change in a children’s product after initial certification and before the test plan testing time, that would affect the products ability to continue to be compliant, must be re-tested. A material change is defined as; change in manufacturing process or facility, change in souring of component parts or suppliers.
Undue Influence Policy (§1107.24) – every manufacturer/importer of record must establish a undue influence policy with regard to third party laboratories which should include; a written policy statement from company officials, training for all appropriate employees, attestation of training, means of immediately notifying the CPSC of any attempts of undue influence or attempts to hide undue influence and retraining of employees if undue influence requirements should change.
Recordkeeping (§1107.26) – records on all children’s products must be maintained by the manufacturer/importer of record for a period of five (5) years and must be made available to the CPSC upon request. These records should include; children’s product certificate per product per manufacturing site, periodic testing records (including the test plan and test results within those test plans), representative samples chosen and the methodology for the representative samples, documentation of all material changes by product by manufacturing site and undue influence training and materials.
Labeling of Consumer Products to Indicate Compliance (§1107.30) – once a children’s product has met all the applicable rules, bans and standards that would apply to the product, the manufacturer/importer of record can label their product with “Meets CPSC Safety Requirements”
Reliance on Component Part Testing or Another Party’s Testing or Certification (§1109.5) – a manufacturer/importer of record can rely (with conditions) on testing and certification supplied by a component part supplier or a finished product supplier (manufacturer) for the purposes of final product certification. The CPSC expects the manufacturer/importer of record to exercise “due care” when accepting this testing or certification. Due care (as pointed out in the alert) could include; conducting a reasonable review of the other party’s certification or test reports and addressing any discrepancies or other concern over the validity, confirming that the testing labs have been accredited by the CPSC, asking other third party labs to confirm the authenticity of the test reports, inspecting or auditing factories to ensure that good manufacturing practices have been carried out, proper sampling procedures and the periodic test plan are being followed and that the necessary records are being kept, or submitting samples to another third party lab to verify compliance of the product. The alert goes on to point out that certain documentation must be received from the component supplier or finished product supplier (manufacturer) before the manufacturer/importer of record can rely on these test reports or certifications. They include;
- Identification of a lot or batch number to identify the component part or finished product that the testing or certification applies to
- Identification of the testing methods and sampling protocols used
- Attestation by the third party lab that performed the testing
- Records to support the traceability
- Attestation by component supplier or finished product supplier (manufacturer) and third party lab that while the component part or finished product was in their care, custody and control they exercised due care to ensure compliance with test integrity requirements.

The challenges pointed out in the alert to comply with all the above regulations as it pertains to component part or finished product certification and testing really comes down to; does a manufacturer/importer of record have enough control over the manufacturing process comply with the record keeping of these two rules? There are really only two paths that an importer or finished product manufacturer can take for compliance; either do all the testing on the product themselves or rely on the foreign manufacturer (or component part supplier) testing and certification of the product.

Questions to Ask?

Can I obtain all of the documentation and develop/implement all the necessary procedures to show that we have exercised “due care” when relying on other parties testing and certification?
What steps do we need to take to “reasonably” know when there has been a material change in the product or the components of the product?
Should we test the product (or component parts) from each purchase order/shipment to ensure that the product (or component part) are still representative of those in distribution and that no material change has been made?

The Year Ahead

January 17, 2013/in CPSC, Posts/by BillJ

2013 – What to Watch from the Consumer Product Safety Commission

In a recent article from the law firm of Roetzel & Andress by attorneys, Brian E. Dickerson, John Boudet, Amanda M. Knapp and Jonathan R. Secrest, they outline five (5) areas for companies to watch out for in the New Year with regard to the CPSC.

Commission Membership – currently the commission is made up of two Democratic commissioners and one Republican commissioner. It is pointed out that President Obama can fill the two vacancies on the Commission this year; however one of those vacancies must be a Republican. He has the choice of just letting the Commission continue as it is currently.
Civil Penalties – civil penalties were dramatically increased with the passage of the CPISA in 2008 but thus far have not resulted in increased civil penalties for companies. It was noted in the article that until October 2012, the commission was evenly split between Republican and Democrat commissioners and now with a Democratic majority the expectation is that civil penalties will increase. An example of this was the 2012 Hewlett-Packard penalty where the number of incidents and the timing of reporting a product defect was the basis of the large civil penalty.
Online Database Rulings – the CPSC’s online database, SaferProducts.gov, was another issue brought forth by the law firm. They discussed a recent opinion by a U.S. District judge in the matter of Company Doe v. Tenenbaum, where it was held that “the Commission had abused its discretion in seeking to publish a complaint on its online database because it failed to meet the statutory requirement that a compliant of harm be ‘related to’ the product identified in the compliant.” Since this is the first court challenge to the online database it is uncertain as to if other companies will use judicial review to prevent publication in the database. Additionally the current case is being appealed and is being joined by several consumer interest groups who are seeking to obtain the identity of the company and the product.
Administrative Complaints – a more aggressive approach by the commission in the filing of administrative complaints and recalls of products was noted. The case of the manufacturer of “Buckyballs” was used to show how the Commission went from working with the manufacturer on the development of education, packaging and warnings for the product to litigation, product ban and recall. In addition the Commission showed a wiliness to go directly to retailers, urging them to stop selling the product. It would seem that the Commission has adopted the stance that warnings are not sufficient to prevent hazards presented by products.
New Section 6(b) Interpretation – section 6(b) of the Consumer Product Safety Act (CPSA) prohibits the Commission from disclosing information about a consumer product and the identity of the manufacturer or private labeler until the Commission has taken “reasonable steps” to assure that the information is accurate and fair. In a new interpretation of section 6(b) the Commission has stated that it will announce that it is “investigating” a product or company solely on the information provided in an initial or full report submitted under section 15 of the Consumer Product Safety Act (CPSA)

New FTC Policy Statement on Labeling

January 15, 2013/in Posts/by BillJ

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.

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

January 14, 2013/in Posts/by BillJ

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.

Demonstrating what the CPSC calls “due care” with regard to the periodic testing rule

December 31, 2012/in Posts/by BillJ

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!

What is the purpose of periodic testing? (Based on 16 CFR Part 1107)

December 28, 2012/in Posts/by BillJ

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.