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The new Chairman of the U.S. Consumer Product Safety Commission (“CPSC”), Inez Moore Tenenbaum, plans to attend the third biennial consumer product safety summit from October 21 through 26, 2009 in three Chinese cities, Beijing, Wuxi (Jiangsu Province), and Jinhua (Zhejiang Province). The CPSC delegation will meet its Chinese counterpart agency, the General Administration of Quality Supervision, Inspection, and Quarantine (“AQSIQ”), and manufacturers and exporters.

China’s commercial reputation in the United States was seriously damaged in 2007 because of safety problems with food and toys. China’s subsequent domestic scandal over infant formula in 2008 heightened the concerns of American consumers. The public response revealed, however, that the CPSC was underfunded, with a limited mandate to inspect and enforce safety rules. The policy of the Bush Administration had been to favor voluntary compliance with industry-defined safety standards instead of mandatory laws and regulations.

There has been much anticipation of how the Obama Administration, committed to “change,” might change the ways and means of the CPSC, especially in dealing with China. In May, President Obama included in his budget a 71 percent increase in CPSC funding. Consequently, the Tenenbaum visit to China could be particularly important. It could lead to policy changes affecting access to the U.S. market for Chinese products.

Officially, the CPSC and the AQSIQ expect to help U.S. importers and Chinese suppliers “establish a comprehensive and systemic approach” to meet both voluntary standards and U.S. laws and regulations. Recent regulatory developments in the United States under the Obama Administration already are impacting Chinese manufacturers and exporters of toys, bicycle parts, jogger strollers and youth electronic devices, as John Burke discussed in two previous blog posts (“CPSC Issues Exemptions To Lead Content Requirements” and “Recent Changes To U.S. Consumer Protection Laws Affect Chinese Exporters”).

Tenenbaum, nominated by President Obama on June 9, 2009 and confirmed by the Senate ten days later to serve as the ninth Chairman of the CPSC, was not an obvious appointment to this specialized agency. Her background is in education, not consumer safety, but her early endorsement of Obama and support during the primary elections could give her direct access to the White House. According to Newsweek columnist Howard Fineman, the first person Obama embraced (after his wife) on primary night in South Carolina was Tenenbaum. The appointment may have been more important to Obama politically than substantively, but Obama understands the importance of consumer safety both for his own stature and for relations with China, in particular.

President Obama also nominated Robert S. Adler and Anne M. Northup as CPSC Commissioners, which is part of the White House’s effort to expand and strengthen the agency. For more than fifteen years, CPSC operated with only three Commissioners, and in the final years of the Bush Administration frequently was without even three. Confirmed by the Senate on August 7, 2009, Adler and Northup expand the agency’s leadership to five and bring important professional and political resources: Adler spent eleven years (1973 – 1984) as an attorney-advisor to two CPSC Commissioners, and Northup, an experienced Republican politician, represented the 3rd congressional district of Kentucky in the United States House of Representatives, from 1997 to 2007, where she served on the powerful House Appropriations Committee. The combination of moves – the appointment of an early and ardent supporter of the President as Chairman; the expansion of the number of Commissioners from three to five; bipartisan appointments mixed with experience and expertise in consumer safety; early regulatory reform – all suggest a serious presidential commitment. The trip to China, four months after Ms. Tenenbaum’s appointment, signals a primary commitment to improved consumer safety regarding Chinese products.
 

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A previous blog post discussed the impact of the Consumer Product Safety Improvement Act of 2008 (“the CPSIA”) on foreign manufacturers of products sold in the United States. This blog discusses certain temporary exemptions that the Consumer Product Safety Commission (“the Commission”) has issued for certain categories of products. Some of them require manufacturers to take immediate action to qualify.

Bikes and Joggers

The Commission issued a conditional exclusion from the lead requirements for bicycle parts, jogger strollers, and bicycle trailers. However, to qualify for this exclusion, one must file a report with the Commission by August 29, 2009.

On March 11, 2009, the Bicycle Product Suppliers Association (“BPSA”) filed a petition to exclude a class of materials for certain bicycle parts, jogger strollers, and bicycle trailers intended for children ages 12 and younger. The BPSA sought exclusion for certain components made with metal alloys, including steel containing up to 0.35% lead, aluminum with up to 0.4% lead, and copper with up to 4% lead. The Commission originally denied the BPSA’s petition for exclusion. However, on June 25, 2009, the Commission decided to stay enforcement of the lead content levels for the components listed in the BPSA’s petition until July 1, 2011. This stay of enforcement is conditioned on: (a) the stay applying only to bicycles, jogger strollers, and bicycle trailers that are manufactured on or before June 30, 2011; (b) the stay applying only to the components and concentrations of lead that are listed above; (c) each manufacturer covered by the stay filing with the Secretary of the Commission, not later August 29, 2009, a report identifying each model of bicycle the manufacturer produced since May 1, 2008; and (d) no later than December 31, 2009, each manufacturer covered by the stay presenting a comprehensive plan to the Commission describing how it intends to reduce the lead exposure from parts used that exceed a 300 ppm lead content.

 Youth Motorized Recreational Vehicles

The Commission granted a stay of enforcement until May 1, 2011 of the lead content restrictions for certain parts of youth all-terrain vehicles, youth off-road motorcycles, and youth snowmobiles. Specifically, the exclusion pertains to battery terminals containing up to 100% lead, and components made with metal alloys, including steel containing up to 0.35% lead, aluminum with up to 0.4% lead, and copper with up to 4.0% lead. This stay of enforcement is subject to essentially the same conditions as those discussed in the “Bikes and Joggers” section above. These conditions include a requirement that each manufacturer covered by the stay file with the Secretary of the Commission a report that details all youth motorized recreational vehicle that the manufacturer has produced since March 1, 2008. No later than November 1, 2009, each manufacturer covered by the stay must also present a comprehensive plan to the Commission that describes how it intends to reduce the lead exposure of parts that have a lead content of over 300 ppm. Unfortunately, the deadline for submission of the first report has already passed. Accordingly, manufacturers who have not filed a timely report will be unable to take advantage of this stay of enforcement.

Youth Electronic Devices

Although the Commission stayed the testing and certification requirements for manufacturers of electronic devices until February 10, 2010, the stay did not provide much relief to these manufacturers, because many of their devices contain component parts that exceed the lead content limits of the CPSIA. In response to the outcry by the affected electronics manufacturers, the Commission issued an interim final rule that clarifies which products are subject to exemptions from the lead content limits. The rule provides that if a lead-containing component part is not accessible to a child, then it is not subject to the lead limits prescribed by the CPSIA. This exemption includes removable or replaceable component parts that are inaccessible when the product is assembled in functional form (e.g., most batteries). Additionally, the Commission provided a list of exemptions for child-accessible component parts that do not meet the lead content limits. All other child-accessible component parts are not exempt from the lead content limits. The CPSC published its interim final rule and a list of exempt, child-accessible component parts  on February 12, 2009.

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The Consumer Product Safety Improvement Act of 2008 (“the CPSIA”) significantly impacts both foreign and domestic manufacturers of children’s products and other goods through the regulation of these manufacturers’ products. Many of the CPSIA’s requirements came into effect last year. Others are being phased in. The new, drastically lower maximum lead limits come into effect on August 14, 2009.

Affected manufacturers should take note of these new rules and regulations, because the CPSIA increases substantially the civil and criminal penalties for violations. Under the CPSIA, “manufacturer” includes importers and anyone who makes, produces, or assembles a product. Foreign manufacturers of relevant products are effected directly, through liability as a manufacturer, and indirectly, through new U.S. customer requirements as those customers seek to ensure compliance with their own obligations under the CPSIA. This blog addresses issues that affect most products under the CPSIA’s regime. A subsequent blog will discuss certain temporary exemptions that have been granted to specific industries.

Lead Content

The CPSIA establishes new limits on the lead content of the products that it regulates, with said limits decreasing over time. For children’s products, the maximum allowable total lead content will decrease from 600 ppm to 300 ppm on August 14, 2009, and to 100 ppm on August 14, 2011. For lead paint, the maximum amount of lead that it can contain will be reduced from 600 ppm to 90 ppm on August 14, 2009.  The CPSIA also authorizes the Consumer Product Safety Commission (“the Commission”) to revise the lead content levels of consumer products downward, provided such a revision is technologically feasible.

Additionally, the Commission is granted discretion to determine whether a commodity, class of materials, or a specific material automatically does not exceed the lead content limits discussed above or whether it exceeds such limits, but is excluded from such regulations. The Commission recently published a final rule detailing the procedures and requirements for a Commission determination or exclusion.  If the Commission determines that a material in question automatically does not exceed the relevant lead content limits, that material would not be subject to the testing requirements prescribed by the CPSIA (discussed below). On the other hand, if a product or component unavoidably has a lead content higher than the CPSIA allows, that item must be granted an exclusion by the Commission in order to be sold in the United States. In order to qualify for an exclusion, normal and foreseeable use of the item in question must not result in the absorption of any lead into the human body nor have any other adverse impact on public health or safety.

Phthalate Content

The CPSIA places restrictions on the amounts of phthalates that children’s toys and other child care articles can contain. A “children’s toy” is defined as a product intended for a child 12 years old or younger for use when playing, and a “child care article” is a product that a child 3 years old and younger would use for sleeping, feeding, sucking, or teething. These products are not allowed to contain concentrations of DEHP, DBP, or BBP higher than 0.1%. Additionally, on an interim basis, a product falling under one of these two categories cannot contain DINP, DIDP, or DnOP in concentrations higher than 0.1% if the product can be placed in the child’s mouth or brought to the mouth to be sucked or chewed.  The CPSC has published on its website answers to frequently asked questions about the phthalates restrictions.

Certificates of Compliance

For any product manufactured after November 12, 2008, the CPSIA initially required that all manufacturers, importers and private labelers of such products certify that they comply with all applicable consumer product safety rules, regulations, bans, and standards that are issued by Congress or the Commission. The CPSIA also granted the Commission the authority to designate by rule one or more of the above-mentioned parties to issue the required certificate and to relieve the other parties from the requirement to furnish certificates. In the case of products manufactured outside of the U.S., the Commission has designated the importer as the sole entity that must issue such certificates. Nevertheless, while the importer has the legal duty to certify, in order to make that certification it is likely to contractually impose certification requirements on its foreign suppliers. Additionally, the Commission has determined that these certificates may be furnished in electronic form, provided that the electronic certificate is available to the Commission upon request before the product or shipment is introduced into domestic commerce.  The CPSC published its final rule regarding certificates of compliance on November 18, 2008.

Testing Requirements

The Commission is required to establish deadlines by which manufacturers of CPSIA-regulated products are to begin third-party testing and certification of their products. Due to the Commission’s limited resources, it was unable to meet the CPSIA’s deadline for establishing these testing and certification requirements, which has resulted in a stay of enforcement of those requirements until February 10, 2010.  This stay of enforcement currently applies to all products regulated by the CPSIA, with the exception of: products that were subject to such requirements prior to the CPSIA, lead paint, full-size and non-full size cribs and pacifiers, small parts, metal components of children’s metal jewelry, certain ATV’s, and other products governed by different acts incorporated into the pre-existing Consumer Product Safety Act. Testing guidelines and a list of approved third-party testing laboratories will be provided for CPSIA-regulated products on a rolling basis. Nevertheless, all products regulated by the CPSIA, regardless of whether they are currently subject to testing requirements, must still comply with the other certification requirements discussed above.
 

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