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Notes from the Recent CPSC Safety Academy 2013

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During the recent CPSC Safety Academy held in Seattle, WA this month, there was a presentation given by Carol Cave, the SafetyAcademy2013Assistant Executive Director (AED) of the Office of Import Surveillance and John Blachere, an International Trade Specialist in the Office of Import Surveillance for the CPSC on how the CPSC reviews shipments at ports.

With the expansion of the tariff codes, the CPSC has the ability to target shipments with either high profile product groups, which may have experienced recalls or manufacturers who may have had problem products in the past.  Based on this system, there were over 2 million shipments that were eligible for examination and out of these only 1,400 (0.070%) were detained with an average detention time of 13.4 days.

The products detained included; Toys (55%), Fireworks (14%), Clothing (9%), Holiday Light Sets (3%), Other Electrical Products (5%) and All Others (14%).  Most of these products entered the United States by Sea (86%) with the other categories being; Rail (2%), Truck (6%) and Air (6%).

Of the 1,400 shipments stopped for examination 77% (1,022) were found to have violations with 61% (622) of those requiring seizure.  These shipments were over the period from October 1, 2011 to September 5, 2013.

Of those violations that required seizure, the number one reason was for lead (34%) followed by a mechanical hazard (15%).  While all of this was interesting, most of this information has been issued throughout the year in CPSC press releases.  What was interesting was that during the QA portion of the presentation a question came up with regard to Children’s Product Certificates.  The question was, how did the CPSC observe company’s complying with the requirement of certificates “accompanying each shipment”?

Carol and John both said that certificates were either physically with the products (in the containers themselves), included with the importation documents submitted by brokers or in a unique URL printed on the invoice, PO or other importation document.

They were then asked if they stopped and seized shipments strictly for not having a certificate for which they responded no.  However,  they did say that beginning in the fiscal year 2014 they will be looking to see if the shipment does have a proper certificate.  This means that even if the shipment has passed the examination for chemical or physical hazard, the shipment can still be help up for a documentation (certificate) violation.

Product Safety Conference Concludes with CPSC Chairman Keynote Address

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Yesterday was the last full day of the 2012 ICPHSO Annual Meeting and Training Symposium.

The day featured a keynote by U.S. Consumer Product Safety Commission (CPSC) Chairman Inez Moore Tenenbaum (pictured delivering the keynote)

   Some of her key points:

  • CPSC is being proactive at ports.  In 2010 & 2011, 6.5M units of over 2,000 products were seized.
  • Independent 3rd party testing is set up and running well.
  • A strong CPSC is good for business – it provides a more level playing field.
  • Standards development, recalls process, and federal rulemaking will be priorities in 2012.
  • Successful Saferproducts.gov public database will have one year anniversary on March 11.  It has had 6,300 unsafe product reports.

Penalties and Enforcement
Also featured was a panel on Penalties and Enforcement, featuring Cheryl Falvey, U.S. CPSC General Counsel.  Some of the points made there:

In August 2009, the maximum penalty went from $1.8M to $15M.

If the duty to report occurred in 2008 but was not reported until 2010, the violation occurred in the higher penalty period.

A failure to report and the deliberate subsequent sale of recalled product doubles the maximum penalty to $30M.

There has been less self-reporting and more anticipated litigation since the penalty increase.

There is no formula to calculating a penalty.  Statutory factors include:

  • Nature
  • Circumstance
  • Extent and gravity of the violation

Other factors include:

  • Safety/compliance program
  • History of noncompliance
  • Economic gain for noncompliance
  • Failure to respond timely to staff requests

Every settlement is subject to approval by CPSC commissioners.  Then it is listed in the Federal Register for public comment.

The CPSC is looking for a case that makes a statement.  “This has a deterrent effect,” says Falvey.

Individuals are now being pursued for felony criminal penalties.  This often happens with Subchapter S corporations, where the individual is virtually the same as the corporation.

The CPSC can be creative.  E&B Giftware was given a $550,000 civil penalty, with all but $50,000 suspended if they met requirements of the settlement.

The whistleblower provision in the Consumer Product Safety Improvement Act (CPSIA) of 2008 has only been used once.  Calls are more likely to be a trade complaint from a competitor.