Consumer Safety
Better Information and Planning Would Strengthen CPSC's Oversight of Imported Products Gao ID: GAO-09-803 August 14, 2009The growing volume of consumer products imported into the United States has strained the resources of the Consumer Product Safety Commission (CPSC), challenging the agency to find new ways to ensure the safety of these products. The Consumer Product Safety Improvement Act (CPSIA) mandated that GAO assess the effectiveness of CPSC's authorities over imported products. GAO's objectives were to (1) determine what is known about CPSC's effectiveness in using these authorities, (2) compare CPSC's authorities with those of selected U.S. agencies and international entities, and (3) evaluate CPSC's plans to prevent the entry of unsafe consumer products. To address these objectives, GAO analyzed CPSC and other agencies' and entities' authorities, reviewed literature on consumer product safety, and compared CPSC's planning efforts with criteria for effective planning practices.
GAO found broad consensus that CPSC's authorities over imported consumer products have the potential to be effective. However, CPSC has made limited progress in measuring the effectiveness of its authorities, and CPSC's ability to implement these authorities has been constrained by competing priorities and limited resources, as well as by delays in implementing key provisions of CPSIA. CPSC's presence at U.S. ports is limited and, in order to identify potentially unsafe products, it must work closely with U.S. Customs and Border Protection (CBP), which faces pressure to quickly move shipments into commerce. CPSC does not have access to key CBP import data it could use to target incoming shipments for inspection, and it has not updated its agreements with CBP to clarify each agency's roles and responsibilities. CPSC's activities at U.S. ports could be strengthened by better targeting incoming shipments for inspection and by improving CPSC's coordination with CBP. Otherwise, CPSC may not be able to carry out key inspection activities efficiently or to effectively leverage its enforcement priorities with CBP. Select federal agencies and foreign governments provide lessons for strengthening CPSC's implementation of its authorities, particularly with respect to border surveillance and information sharing among countries. Both USDA and FDA have more robust border surveillance activities than CPSC because they obtain more data on incoming shipments, have more staff working at U.S. ports, use more developed programs to target risks, and use information technology systems that are integrated with other agency-based and CBP systems to effectively leverage their enforcement priorities with CBP. Other agencies have found that timely CBP import data integrated with other agency surveillance data is useful in screening incoming shipments for potential safety violations. In addition, officials at FDA and USDA have found that efforts to educate overseas industries and governments on U.S. safety standards could reduce the number of unsafe products that reach U.S. consumers. GAO also found broad consensus that continued coordination and information sharing among governments and multilateral organizations can improve the effectiveness of product safety frameworks. CPSC has increased its efforts to coordinate with these other entities, particularly China, but lacks a comprehensive plan for international engagement. CPSC has established annual plans, but lacks a long-term plan with key goals to prevent the entry of unsafe products. CPSC has not yet updated its agencywide Strategic Plan to reflect new authorities granted in CPSIA. This may inhibit CPSC's ability to appropriately allocate any potential increases in agency resources or to address the safety of imported products through international means. An updated Strategic Plan may also help to ensure that CPSC has the requisite compliance and analytical staff to support the full range of CPSC's international efforts.
RecommendationsOur recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
Director: Team: Phone:GAO-09-803, Consumer Safety: Better Information and Planning Would Strengthen CPSC's Oversight of Imported Products
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Report to Congressional Committees:
United States Government Accountability Office:
GAO:
August 2009:
Consumer Safety:
Better Information and Planning Would Strengthen CPSC's Oversight of
Imported Products:
GAO-09-803:
GAO Highlights:
Highlights of GAO-09-803, a report to congressional committees.
Why GAO Did This Study:
The growing volume of consumer products imported into the United States
has strained the resources of the Consumer Product Safety Commission
(CPSC), challenging the agency to find new ways to ensure the safety of
these products. The Consumer Product Safety Improvement Act (CPSIA)
mandated that GAO assess the effectiveness of CPSC‘s authorities over
imported products. GAO‘s objectives were to (1) determine what is known
about CPSC‘s effectiveness in using these authorities, (2) compare CPSC‘
s authorities with those of selected U.S. agencies and international
entities, and (3) evaluate CPSC‘s plans to prevent the entry of unsafe
consumer products. To address these objectives, GAO analyzed CPSC and
other agencies‘ and entities‘ authorities, reviewed literature on
consumer product safety, and compared CPSC‘s planning efforts with
criteria for effective planning practices.
What GAO Found:
GAO found broad consensus that CPSC‘s authorities over imported
consumer products have the potential to be effective. However, CPSC has
made limited progress in measuring the effectiveness of its
authorities, and CPSC‘s ability to implement these authorities has been
constrained by competing priorities and limited resources, as well as
by delays in implementing key provisions of CPSIA. CPSC‘s presence at
U.S. ports is limited and, in order to identify potentially unsafe
products, it must work closely with U.S. Customs and Border Protection
(CBP), which faces pressure to quickly move shipments into commerce.
CPSC does not have access to key CBP import data it could use to target
incoming shipments for inspection, and it has not updated its
agreements with CBP to clarify each agency‘s roles and
responsibilities. CPSC‘s activities at U.S. ports could be strengthened
by better targeting incoming shipments for inspection and by improving
CPSC‘s coordination with CBP. Otherwise, CPSC may not be able to carry
out key inspection activities efficiently or to effectively leverage
its enforcement priorities with CBP.
Select federal agencies and foreign governments provide lessons for
strengthening CPSC‘s implementation of its authorities, particularly
with respect to border surveillance and information sharing among
countries. Both USDA and FDA have more robust border surveillance
activities than CPSC because they obtain more data on incoming
shipments, have more staff working at U.S. ports, use more developed
programs to target risks, and use information technology systems that
are integrated with other agency-based and CBP systems to effectively
leverage their enforcement priorities with CBP. Other agencies have
found that timely CBP import data integrated with other agency
surveillance data is useful in screening incoming shipments for
potential safety violations. In addition, officials at FDA and USDA
have found that efforts to educate overseas industries and governments
on U.S. safety standards could reduce the number of unsafe products
that reach U.S. consumers. GAO also found broad consensus that
continued coordination and information sharing among governments and
multilateral organizations can improve the effectiveness of product
safety frameworks. CPSC has increased its efforts to coordinate with
these other entities, particularly China, but lacks a comprehensive
plan for international engagement.
CPSC has established annual plans, but lacks a long-term plan with key
goals to prevent the entry of unsafe products. CPSC has not yet updated
its agencywide Strategic Plan to reflect new authorities granted in
CPSIA. This may inhibit CPSC‘s ability to appropriately allocate any
potential increases in agency resources or to address the safety of
imported products through international means. An updated Strategic
Plan may also help to ensure that CPSC has the requisite compliance and
analytical staff to support the full range of CPSC‘s international
efforts.
What GAO Recommends:
GAO recommends that CPSC (1) ensure expeditious implementation of key
CPSIA provisions; (2) take several actions to strengthen its ability to
target shipments of unsafe consumer products, such as resolving issues
with CBP for obtaining more data on incoming shipments; and (3) develop
a long-term plan for ensuring the safety of consumer products entering
the United States, including long-term plans for international
engagement. CPSC agreed with these recommendations.
View [hyperlink, http://www.gao.gov/products/GAO-09-803] or key
components. For more information, contact Alicia Cackley at (202) 512-
8678 or cackleya@gao.gov.
[End of section]
Contents:
Letter:
Background:
CPSC's Authorities Have the Potential to Be Effective, but
Implementation Is Limited by Incomplete Information on Imported
Products and Resource and Practical Constraints:
Authorities of Select Agencies Are Comparable to CPSC's, but FDA and
USDA's Border Surveillance Activities and Overseas Presence Provide
Useful Information for Strengthening CPSC's Implementation of Its
Authorities:
Information Sharing and Cooperation among Countries Provide Way to
Bridge Differences and Strengthen CPSC 's Implementation of Its
Authorities, but CPSC Lacks a Comprehensive Plan to Guide Its Work:
CPSC Has Established Annual Goals and Short-term Plans to Prevent the
Entry of Unsafe Products, but Lacks a Long-term Plan for the Future:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendix I: Objectives, Scope, and Methodology:
Appendix II: Personal Jurisdiction Over Foreign Manufacturers for CPSC
Enforcement Purposes:
Appendix III: Key Authorities of Select Federal Agencies:
Appendix IV: Key Authorities of Selected International Entities:
Australia:
Canada:
European Union:
Japan:
China:
Appendix V: GAO Contact and Staff Acknowledgments:
Table:
Table 1: Key Authorities of Select Federal Agencies for Preventing the
Entry of Unsafe Imports:
Figures:
Figure 1: Overview of CBP and CPSC's Current Process for Inspections of
Consumer Goods at U.S. Ports of Entry:
Figure 2: CPSC Surveillance Activity at Ports of Entry Compared to
Imports of Consumer Goods, 1998-2008:
Figure 3: Comparison of Selected International Entities' Authorities
with CPSC's Authorities to Prevent the Entry of Unsafe Consumer
Products:
Abbreviations:
ACCC: Australian Competition and Consumer Commission:
AIIS: Automated Import Information System:
APEC: Asian-Pacific Economic Cooperation:
APHIS: Animal and Plant Health Inspection Service:
AQSIQ: General Administration for Quality Supervision, Inspection, and
Quarantine:
CBP: Customs and Border Protection:
CCC: China Compulsory Certification:
CEN: European Committee for Standardization:
CENELEC: European Committee for Electrotechnical Standardization:
CIQ: Customs, Inspection and Quarantine:
CNCA: Certification and Accreditation Administration of China:
CPSC: Consumer Product Safety Commission:
CPSIA: Consumer Product Safety Improvement Act:
DG SANCO: Directorate General for Health and Consumers:
ETSI: European Telecommunications Standards Institute:
EC: European Commission:
EU: European Union:
FDA: Food and Drug Administration:
FSIS: Food Safety and Inspection Service:
GPSD: General Product Safety Directive:
ICPHSO: International Consumer Product Health and Safety Organization:
ITDS: International Trade Data System:
METI: Ministry of Economy, Trade, and Industry (Japan):
MOU: memorandum of understanding:
NHTSA: National Highway Traffic Safety Administration:
OASIS: Operational and Administrative System for Import Support:
OECD: Organization for Economic Cooperation and Development:
PHIS: Public Health Information System:
PREDICT: Predictive Risk-Based Evaluation for Dynamic Import Compliance
Targeting:
USDA: U.S. Department of Agriculture:
USTR: Office of the United States Trade Representative:
WTO: World Trade Organization:
[End of section]
United States Government Accountability Office:
Washington, DC 20548:
August 14, 2009:
The Honorable John D. Rockefeller IV:
Chairman:
The Honorable Kay Bailey Hutchison:
Ranking Member:
Committee on Commerce, Science, and Transportation:
United States Senate:
The Honorable Henry A. Waxman:
Chairman:
The Honorable Joe Barton:
Ranking Member:
Committee on Energy and Commerce:
House of Representatives:
The growing volume of consumer products--such as toys, household
appliances, and children's apparel--imported into the United States has
strained the resources of the Consumer Product Safety Commission (CPSC)
and is challenging the agency to find new ways to ensure the safety of
these products. From 1998 to 2007, the value of consumer products
imported into the United States increased about 101 percent, with
products from China (which includes Hong Kong) nearly quadrupling over
that same period to constitute about 42 percent of all imported
consumer goods. In addition to the growing value of imports, the number
and variety of consumer products have been increasing. Consumer
products are becoming more technically complex and sophisticated, and
they increasingly are not "from" any one place but rather consist of
parts and components from any number of countries.
Increasing imports of consumer products gained national attention in
2007. During that year, CPSC announced 473 recalls, the most in 10
years, and 389 of the recalls (or about 82 percent) involved products
imported into the country. As a result, 2007 became known to some as
"the year of the recall." The number of product recalls in fiscal year
2008 was even higher. These record numbers of recalls have raised the
issue of whether CPSC can ensure the safety of products that are
increasingly manufactured overseas.
While the number of consumer products imported into the United States
has been increasing, CPSC has become progressively smaller in terms of
staff and resources. The commission has not had a full slate of five
commissioners since 1986 and has not been authorized to fund more than
three commissioner positions since 1993. In fiscal year 2008, CPSC had
396 full-time employees, compared with 480 full-time employees in
fiscal year 1997. CPSC's fiscal year 2008 appropriation totaled about
$80 million, and CPSC's fiscal year 2009 appropriation was not passed
until March 2009--about 6 months into the fiscal year 2008--due to a
congressional continuing budget resolution.
In response to the high-profile recalls of imported products in 2007,
as well as concerns that CPSC was inadequately staffed and funded to
enforce existing product safety laws, Congress passed the Consumer
Product Safety Improvement Act (CPSIA), which became law on August 14,
2008.[Footnote 1] CPSIA was intended to update and strengthen CPSC by
authorizing expanded funding, mandating increased staffing subject to
available appropriations, and enhancing existing CPSC authorities,
including those regarding product safety standards, recalls, reporting,
and administrative penalties. In addition, CPSIA introduced several new
statutory tools to address the safety of imported products. Because
Congress was concerned that there may be remaining gaps in U.S. product
safety law or unforeseen consequences of CPSIA with respect to imported
products, CPSIA mandated GAO to review a range of issues regarding
CPSC's authorities to prevent the entry of unsafe products into the
United States.[Footnote 2] Because CPSIA was recently passed, and CPSC
has not had time to implement it fully, we responded to the mandate by
(1) determining how CPSC assesses the effectiveness of its authorities
in preventing the entry of unsafe consumer products and determining
what is known about CPSC's effectiveness in using these authorities,
(2) comparing certain aspects of CPSC's authorities with those of
selected U.S. agencies, (3) comparing CPSC's authorities with those of
selected international entities, and (4) evaluating CPSC's plans to
prevent the entry of unsafe consumer products in the future.
To determine the effectiveness of CPSC's import safety authorities, we
examined CPSC data and interviewed CPSC officials to learn how the
agency measures and assesses its own effectiveness. We conducted
extensive document reviews on consumer product safety generally and
import safety specifically. We interviewed legal professionals and
consumer and industry representatives to obtain their perspectives on
the effectiveness of CPSC's authorities. We also interviewed officials
from other federal agencies involved in product safety at the
international level, including U.S. Customs and Border Protection
(CBP), the Office of the United States Trade Representative (USTR), and
the Departments of State and Commerce. We visited a U.S. port of entry
to observe CPSC import surveillance activities and CPSC's interaction
with CBP staff at the port. We also visited CPSC's Product Testing
Laboratory in Gaithersburg, Maryland, to observe laboratory testing
that supports import safety activities. Furthermore, we conducted a
comparative analysis of CPSC's authorities to prevent the entry of
unsafe consumer products to similar authorities of selected U.S.
federal agencies and selected countries. For our comparative analysis
of U.S. federal agencies, we selected agencies that regulate the safety
of products used by consumers and that possess recent, relevant
experience with import safety. Specifically, we selected the U.S.
Department of Agriculture (USDA), the Department of Health and Human
Services' Food and Drug Administration (FDA), and the Department of
Transportation's National Highway Traffic Safety Administration
(NHTSA). We conducted interviews with agency officials and reviewed
agency statutes, regulations, and other documents. For our comparative
analysis of other countries' product safety authorities, we selected
Australia, Canada, China, the European Union (EU), and Japan for
review.[Footnote 3] We developed a set of questions concerning consumer
product safety authorities, practices, and procedures and worked
through the U.S. Department of State to distribute the questions to
appropriate contacts at U.S. embassies overseas and, in some cases, to
foreign embassies in Washington, D.C. We conducted interviews with
product safety officials from Canada, the EU, and Japan, and with U.S.
officials at the embassies in Australia, Canada, and China. We received
written responses to our questions from the U.S. embassies in
Australia, Canada, and China; from officials with the Embassy of Japan
in Washington, D.C.; and from consumer product safety officials in the
EU. We also reviewed documents regarding product safety in the selected
countries and reports on consumer product safety prepared by the
Organization for Economic Cooperation and Development (OECD). To
evaluate CPSC's plans to prevent the entry of unsafe products in the
future, we reviewed CPSC's 2010 Performance Budget Request and compared
CPSC's planning efforts with guidance GAO has developed to assess
implementation of the Government Performance and Results Act. Appendix
I provides a more detailed description of our objectives, scope, and
methodology.
We conducted this performance audit from October 2008 to August 2009,
in accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe that
the evidence obtained provides a reasonable basis for our findings and
conclusions based on our audit objectives.
Background:
CPSC was created in 1972 under the Consumer Product Safety Act to
regulate consumer products that pose an unreasonable risk of injury; to
assist consumers in using products safely; and to promote research and
investigation into product-related deaths, injuries, and illnesses.
[Footnote 4] The Consumer Product Safety Act consolidated existing
federal safety regulatory activity related to consumer products within
CPSC. As a result, in addition to general responsibilities for
protecting consumers against product hazards, the duties and functions
under the following four statutes were transferred to CPSC.[Footnote 5]
* the Flammable Fabrics Act, which among other things, authorizes CPSC
to prescribe flammability standards for clothing, upholstery, and other
fabrics;[Footnote 6]
* the Federal Hazardous Substances Act, which establishes the framework
for the regulation of substances that are toxic, corrosive,
combustible, or otherwise hazardous;[Footnote 7]
* the Poison Prevention Packaging Act of 1970, which authorizes CPSC to
prescribe special packaging requirements to protect children from
injury resulting from handling, using, or ingesting certain drugs and
other household substances;[Footnote 8] and:
* the Refrigerator Safety Act of 1956, which mandates CPSC to prescribe
safety standards for household refrigerators to ensure that the doors
thereof can be opened easily from the inside.[Footnote 9]
CSPC has also subsequently been charged with administering the Virginia
Graeme Baker Pool and Spa Safety Act, which establishes mandatory
safety standards for swimming pool and spa drain covers, as well as a
grant program to provide states with incentives to adopt pool and spa
safety standards.[Footnote 10] In addition, CPSC has been charged with
administering the Children's Gasoline Burn Prevention Act, which
establishes safety standards for child-resistant closures on all
portable gasoline containers.[Footnote 11]
Thus, CPSC's jurisdiction is extremely broad, covering thousands of
types of products. According to CPSC, this jurisdiction covers over
100,000 different manufacturers and generally includes all consumer
products except food, drugs, and cosmetics, which are regulated by FDA;
pesticides, which are regulated by the Environmental Protection Agency;
automobiles and other on-road vehicles, which are regulated by the
Department of Transportation; flotation devices, which are regulated by
the Coast Guard; and firearms, tobacco, and alcohol, which are
regulated by the Department of Justice.
The Consumer Product Safety Act established CPSC as an independent
regulatory commission. The rationale for establishing independent
commissions such as CPSC includes these assumptions: (1) long-term
appointment of commissioners would promote stability and develop
expertise, (2) independent status would insulate the commissioners from
undue economic and political pressures, and (3) commissioners with
different political persuasions and interests would provide diverse
viewpoints. The act provides for the appointment by the President of
five commissioners for staggered 7-year terms. However, no more than
three commissioners have served at one time since 1986, and the
commission has been led by two commissioners since 2006.[Footnote 12]
One of these commissioners is designated the Chairman, who directs all
the executive and administrative functions of the agency.
CPSC was designed as a complement to tort law, under which one may seek
compensation for harm caused by another's wrongdoing. The threat of
legal action under tort law plays an important role in assuring that
companies produce safe products. However, tort law is primarily a
postinjury mechanism, and foreign manufacturers are usually outside of
the U.S. tort law system. Therefore, CPSC has certain authorities
intended to prevent unsafe consumer products from entering the market
in the first place.
CPSC Protects Consumers Primarily through Product Safety Standards:
Under several of the acts that it administers, CPSC primarily protects
consumers from unreasonable risk of injury or death by issuing
regulations that establish performance or labeling standards for
consumer products. These standards are often referred to as "mandatory
standards."[Footnote 13] CPSC issued 38 mandatory standards between
1990 and 2007. If CPSC determines that there is no feasible standard
that would adequately protect the public from danger, CPSC may issue
regulations to ban the manufacture and distribution of the product.
[Footnote 14]
Many consumer products are subject to voluntary standards. These
voluntary standards, which are often established by private standard-
setting groups, do not have the force of law.[Footnote 15] However,
many voluntary standards are established with input from consumer
groups and industry and, as a result, are often referred to as
"consensus standards." In addition, the 1981 amendments to the Consumer
Product Safety Act require CPSC to defer to a voluntary standard--
rather than issuing a mandatory regulation--if CPSC determines that the
voluntary standard adequately addresses the hazard and that there is
likely to be substantial compliance with the voluntary standard.
[Footnote 16]Between 1990 and 2007, CPSC worked with industry and
others to develop 390 voluntary standards related to consumer products.
Import Safety Responsibility within CPSC:
CPSC's policy on imported products states that the commission will seek
to ensure that importers and foreign manufacturers, as well as domestic
manufacturers, distributors, and retailers, carry out their obligations
and responsibilities under the five acts. The commission will also seek
to establish, to the maximum extent possible, uniform import procedures
for products subject to the acts the commission administers.[Footnote
17]
Two CPSC staff offices have primary responsibility for carrying out
this policy: the Office of International Programs and Intergovernmental
Affairs and the Office of Compliance and Field Operations. The Office
of International Programs and Intergovernmental Affairs was created in
2004 to provide CPSC with a more comprehensive and coordinated effort
at the international, federal, state, and local levels in developing
and implementing consumer product safety standards. The office conducts
activities and creates strategies aimed at ensuring greater import
compliance with recognized American safety standards. A major emphasis
of this program is encouraging foreign manufacturers to establish
product safety systems as an integral part of the manufacturing
process. The office is also involved in coordinating international
consumer product safety efforts with such U.S. federal agencies as the
Departments of Commerce and State. It also ensures that CPSC regulatory
efforts are consistent with U.S. international trade obligations by
coordinating with the United States Trade Representative. As of July
2009, the office was staffed by four full-time employees.
The Import Surveillance Division within the Office of Compliance and
Field Operations was created in March 2008 and has primary
responsibility for CPSC's product surveillance program at ports of
entry. CPSC, in cooperation with other appropriate federal agencies, is
required to maintain a permanent product surveillance program for
preventing the entry of unsafe consumer products into the commerce of
the United States.[Footnote 18] Previously, CPSC operated the import
surveillance program through product safety investigators staffed in
multiple regions throughout the country who included among their
investigative responsibilities ports of entry in their particular
regions. Over the years, the numbers of CPSC regional offices and
product safety investigators have been reduced. CPSC states that these
product safety investigators continue to support the import
surveillance program, operating in 48 locations throughout the country.
The Import Surveillance Division marks the first permanent, full-time
presence of CPSC investigators at key ports of entry, according to
CPSC. As of July 2009, the division was staffed by 11 full-time
employees--9 compliance investigators located at seven ports of entry
and a Director and Supervisory Compliance Investigator located at CPSC
headquarters in Bethesda, Maryland. The compliance investigators are
supported by compliance officers, technical staff, attorneys, and other
staff at CPSC headquarters. There are over 300 ports of entry in the
United States.
CPSC Works Closely with CBP at Ports of Entry:
CBP notifies CPSC and other regulatory agencies with import safety
responsibilities of the arrival of imported products and provides
information about those products. Under several of the acts that CPSC
administers, CPSC identifies potentially unsafe products and requests
that CBP set them aside for CPSC examination. CPSC has implemented
programs at some ports for CBP to target certain categories of products
based on their Harmonized Tariff Schedule (HTS) codes.[Footnote 19] CBP
has import specialists at major ports who specialize in certain
commodities, including consumer products. They analyze manifest, entry,
and other import data to identify shipments for CPSC review.[Footnote
20] In some instances, CBP will independently identify shipments for
CPSC examination. Once samples are delivered to or taken by CPSC for
examination, CPSC may detain the shipment pending further examination
and testing, conditionally release the shipment to the importer's
premises pending examination and testing, or release the shipment to
the importer outright. Compliance investigators examine the sample to
determine whether it:
* complies with the relevant mandatory standard(s);
* is accompanied by a certification of compliance with the relevant
product safety standard that is supported by testing, in some instances
by a third party;
* is or has been determined to be an imminently hazardous product;
[Footnote 21]
* has a product defect that presents a substantial product hazard;
[Footnote 22] or:
* is produced by a manufacturer who failed to comply with CPSC
inspection and recordkeeping requirements.
If compliance investigators decide that further testing of a sample is
necessary, they will send the sample to the CPSC Product Testing
Laboratory or to a CBP laboratory.[Footnote 23] If the sample is found
to violate any of the above criteria, CPSC is authorized to refuse
admission of the shipment. Consumer products that are refused admission
will be destroyed unless the Secretary of the Treasury allows the
product to be exported.[Footnote 24] CPSC may instead instruct CBP to
seize shipments upon finding a prohibited act, which according to CPSC
is the most common outcome when a violation is discovered. The importer
may be subject to civil or criminal penalties.[Footnote 25] See figure
1 for an overview of CBP and CPSC's current process for conducting
inspections at ports of entry.
Figure 1: Overview of CBP and CPSC's Current Process for Inspections of
Consumer Goods at U.S. Ports of Entry:
[Refer to PDF for image: illustration]
Arrival:
Shipments arrive at U.S. ports.
Targeting:
* Computer-based targeting of manifest and/or entry data.
* Use of CBP officers‘and/or import specialists‘ knowledge of goods
under CPSC regulations.
* CPSC programs focus on certain products.
* National targeting priorities through joint CBP-CPSC operations
(e.g., Operation Guardian).
Examination:
* CBP notifies CPSC of potential violations. Merchandise set aside for
examination.
* CPSC examines merchandise.
* If there is no violation, Release of cargo into commerce.
Testing:
* Tests sample at CPSC lab and recommends CBP detention of cargo.
* Tests sample at CPSC lab and recommends conditional release of cargo
into importer‘s care.
* If there is no violation, Release of cargo into commerce.
Disposition of shipments:
* CPSC recommends CBP seizure of noncompliant products.
- Administrative process. (Treasury Forfeiture Fund used for storage
and destruction of forfeited noncompliant products.)
* CPSC refuses admission of merchandise; no immediate designated
funding available for product destruction.
- Destruction, exportation, or liquidated damages for failure to export
or destroy.
* CPSC allows importer to recondition merchandise.
* If there is no violation, Release of cargo into commerce.
* Liquidated damages for failure to recondition.
Sources: GAO analysis of CBP and CPSC information; Art Explosion (clip
art).
[End of figure]
CPSC relies on CBP to carry out key import surveillance activities at
ports of entry. In addition to its numerous antiterrorism and trade
responsibilities, CBP faces pressure from the international trade
community to quickly move compliant shipments into commerce. Factors
such as the high volume of containers, financial incentives for
longshoremen to unload ships quickly, and the limited amount of time
CBP has to identify and examine cargo contribute to the challenges CBP
faces in facilitating commerce.[Footnote 26] In addition, CBP enforces
regulations for 45 other federal agencies. Importers place pressure on
CBP to correctly identify violations because the cost of storing CBP-
detained products at privately run container examination stations is
high. CPSC surveillance activity with CBP at ports of entry has
fluctuated in recent years. For example, as shown in figure 2, the
number of samples that CPSC collected for examination dropped from
1,348 in fiscal year 1999 to 710 and 514 in fiscal years 2002 and 2003
and has still not reached the 1999 level, despite an increase in
imports of products under CPSC jurisdiction of about 101 percent.
Figure 2: CPSC Surveillance Activity at Ports of Entry Compared to
Imports of Consumer Goods, 1998-2008:
[Refer to PDF for image: illustrated horizontal bar graph]
Year: 1998;
Import samples collected by CPSC: 1,222;
Total import dollars (in billions) under CPSC jurisdiction and
percentage from China and Hong Kong: $318.3 (22.0%).
Year: 1999;
Import samples collected by CPSC: 1,348;
Total import dollars (in billions) under CPSC jurisdiction and
percentage from China and Hong Kong: $356.1 (22.5%).
Year: 2000;
Import samples collected by CPSC: 870;
Total import dollars (in billions) under CPSC jurisdiction and
percentage from China and Hong Kong: $413.1 (23.1%).
Year: 2001;
Import samples collected by CPSC: 880;
Total import dollars (in billions) under CPSC jurisdiction and
percentage from China and Hong Kong: $390.8 (24.8%).
Year: 2002;
Import samples collected by CPSC: 710;
Total import dollars (in billions) under CPSC jurisdiction and
percentage from China and Hong Kong: $410.8; (28.4%).
Year: 2003;
Import samples collected by CPSC: 514;
Total import dollars (in billions) under CPSC jurisdiction and
percentage from China and Hong Kong: $442.3 (31.8%).
Year: 2004;
Import samples collected by CPSC: 888;
Total import dollars (in billions) under CPSC jurisdiction and
percentage from China and Hong Kong: $510.1; (34.7%).
Year: 2005;
Import samples collected by CPSC: 685;
Total import dollars (in billions) under CPSC jurisdiction and
percentage from China and Hong Kong: $564.3 (38.0%).
Year: 2006;
Import samples collected by CPSC: 616;
Total import dollars (in billions) under CPSC jurisdiction and
percentage from China and Hong Kong: $603.9; (40.3%).
Year: 2007;
Import samples collected by CPSC: 748;
Total import dollars (in billions) under CPSC jurisdiction and
percentage from China and Hong Kong: $638.9; (42.1%).
Year: 2008;
Import samples collected by CPSC: 1,171;
Total import dollars (in billions) under CPSC jurisdiction and
percentage from China and Hong Kong: $638.7; (42.8%).
Sources: GAO analysis of CPSC and U.S. International Trade Commission
data.
Note: Data on import samples are reported on a fiscal-year basis. Data
on imports under CPSC jurisdiction are reported on a calendar-year
basis.
[End of figure]
CPSC's Authorities Have the Potential to Be Effective, but
Implementation Is Limited by Incomplete Information on Imported
Products and Resource and Practical Constraints:
Consensus exists that CPSC's authorities have the potential to be
effective in preventing the entry of unsafe products into the United
States. Although CPSC has made limited progress in measuring the
effectiveness of its authorities over imported products, the agency
believes that new authorities granted in CPSIA should increase
compliance with mandatory standards and enhance its ability to monitor
compliance with voluntary standards at ports of entry. Private industry
sources and others we interviewed generally said that CPSC's
authorities are potentially effective but that implementation is
limited by competing priorities and resource and practical constraints.
Consensus Exists That CPSC Has Broad Authority over Imported Products,
but CPSC's Assessment of Effectiveness Has Been Limited:
There is consensus among those we interviewed that CPSC has broad
authority to prevent the entry of unsafe consumer products into the
United States, particularly in light of new authorities that strengthen
its ability to enforce mandatory standards and protect consumers from
unsafe products subject to voluntary standards at ports of entry. As
described above, CPSC primarily protects consumers from unreasonable
risk of injury by promulgating mandatory standards and working with
private standard-setting organizations to promulgate voluntary
standards, and CPSC has broad authority to enforce those standards at
ports of entry. In particular, CPSC and other product safety experts
believe CPSC's enforcement of mandatory standards at ports of entry
will be strengthened because now all products subject to a mandatory
standard under any law administered by CPSC must be accompanied by a
certification of compliance that is supported by product testing.
[Footnote 27] In addition, every manufacturer or private labeler of a
product subject to a children's product safety rule must have samples
of the product tested by an accredited third-party laboratory for
conformance with the applicable mandatory standard.[Footnote 28] For
many years, CPSC focused import surveillance activities on enforcement
of certain mandatory standards for consumer products, primarily toys,
fireworks, and lighters.[Footnote 29] The new testing requirement puts
greater burden on industry to ensure that products comply with
mandatory standards. If implemented properly, CPSC should be able to
use the testing and certification requirements to strengthen
surveillance of regulated products at ports of entry.
Furthermore, CPSC believes its ability to monitor compliance with
voluntary standards at ports of entry will be strengthened by new
authority to create a "substantial product hazard list."[Footnote 30]
As described above, many consumer products are produced according to
voluntary standards. In addition, many products are subject to no
standards. CPSC primarily protects consumers from unsafe products
subject to voluntary or no standards by declaring them "substantial
product hazards" when the products have a defect that creates a
substantial risk of injury. However, CPSC faces difficulty at ports of
entry identifying defects in products subject to voluntary or no
standards because defects are not always apparent until the product has
been used by the public.[Footnote 31] With implementation of the
substantial product hazard list, CPSC will be able to target new
shipments and refuse admission of products subject to voluntary
standards that it has already determined have a defect constituting a
substantial risk of injury.[Footnote 32]
Despite this broad authority, CPSC has made limited progress in
measuring the effectiveness of its authorities to prevent the entry of
unsafe consumer products. CPSC measures the performance of its import
surveillance program by the number of product samples collected and by
the number of samples ultimately found to be unsafe and therefore
seized. CPSC is now considering altering this metric so that it will
track all shipments that CPSC investigators examine, rather than just
those samples collected and tested. Furthermore, CPSC measures the
performance of its Office of International Programs and
Intergovernmental Affairs by the number of outreach events conducted.
These metrics provide measures of the output of program staff but do
not necessarily provide accurate measures of the effectiveness of the
programs. In the 1990s, CPSC used industry compliance with mandatory
standards as an alternative basis for measuring the agency's
effectiveness, what it termed the Comprehensive Plan. The plan was
designed to examine the compliance of these products with mandatory
standards on a periodic basis and then identify problem areas for
focusing limited agency resources. CPSC did not continue the
Comprehensive Plan after the mid-1990s because the data indicated that
compliance was high, and CPSC believed that the plan did not help it
address problems with noncompliant products. CPSC sought information
from the public in 2008 to develop a new methodology that would replace
the Comprehensive Plan. CPSC reported receiving two responses, but
commission staff stated that they did not pursue further work because
the responses did not address their needs for developing new
performance measures. While CPSC recognizes the need for outcome-
oriented performance measures and has taken steps to develop new
measures, without these measures, CPSC may not be able to determine how
effective its authorities are for preventing the entry of unsafe
products.
Implementation of CPSC's New Authorities to Prevent Entry of Unsafe
Products into the United States Has Been Delayed:
While CPSC has broad authority to prevent the entry of unsafe consumer
products into the United States, there have been delays in implementing
new authorities CPSC received in CPSIA. According to CPSC, the agency
has more than 40 rulemakings to conduct under CPSIA, including
approximately 20 rulemakings to initiate or complete by August 2010,
which has contributed to the delay in implementing the act. In
particular, the two new authorities discussed above--certain testing
and certification requirements and the substantial product hazard list-
-have not been implemented. CPSC issued a stay of enforcement of
certain testing and certification requirements until February 10, 2010,
delaying implementation of these standards and raising questions among
manufacturers subject to this requirement.[Footnote 33] CPSC stated
that it did not complete the rulemaking process because it was unable
to respond to innumerable inquiries from industry seeking relief from
the testing requirement at a time when the agency faced severe resource
limitations because it was operating under the prior year's budget. In
addition, to date CPSC has not conducted rulemaking to implement the
substantial product hazard list. The effectiveness of CPSC's new
authorities will not be clear until CPSC completes its rulemaking and
demonstrates the ability to enforce these regulations.
Another factor contributing to delays in implementation of new
authorities is the need for CPSC to balance its mission to protect
consumers with industry interests. CPSC's mission is to protect the
public from unreasonable risk of injury associated with consumer
products, and CPSC is also required to work with industry to develop
product safety standards, collect information about unsafe products,
and conduct recalls. Private companies have expressed concerns about
CPSC's implementation of CPSIA, particularly the expanded testing and
certification requirements, which, as noted earlier, helped contribute
to CPSC's decision to delay enforcement of these provisions. In public
comments on CPSIA, several industry representatives commented that the
certification requirements are duplicative and could cause them to
incur tremendous costs due to the complexity of their business
operations. For example, industry representatives stated that large
manufacturers produce hundreds of thousands of variations of their
products that may require testing and certification, while small
manufacturers may have limited product lines across which to spread
costs.
In addition to industry concerns, CPSC has also faced concerns from
consumers that CPSC's implementation of CPSIA has not, at times,
fulfilled the consumer protection goals of the act. In one recent
example, consumer groups challenged CPSC's advisory opinion that
CPSIA's provisions prohibiting the sale of children's products that
contain certain chemicals called phthalates did not apply retroactively
to inventories existing prior to the effective date of the
prohibitions. These groups were concerned that if the phthalate
prohibitions were not applied retroactively, consumers would continue
to be exposed to unsafe products in the marketplace. The consumer
groups filed suit in a federal district court seeking a declaratory
judgment that CPSC's advisory opinion, which was issued at the request
of certain wholesale and retail entities, was contrary to CPSIA, and
thus violated the Administrative Procedure Act. The district court held
that the phthalate prohibitions in CSPIA unambiguously applied to
existing inventory and set aside CPSC's opinion.[Footnote 34]
According to some industry representatives we interviewed, retailers
are taking the lead in product testing and certification in response to
industry's uncertainty over how CPSC will enforce CPSIA provisions.
These representatives believed that retailers are ahead of CPSC in this
regard. For example, one industry group said that although CPSC has
stayed enforcement of many of its certification requirements, retailers
still require suppliers to provide certifications, and some retailers
had more stringent lead standards than CPSIA. According to industry
groups, U.S. companies, particularly retailers, have an incentive to
institute and enforce stringent product safety standards because
selling products that cause injury or death can have negative impacts
on their brands. The U.S. tort system that exposes companies selling
unsafe products to lawsuits also helps to ensure that companies comply
with product safety standards. To respond to industry concerns about
how to comply with safety standards under current and prior consumer
product safety laws, some industry groups have also developed or are
developing their own testing and certification programs.[Footnote 35]
CPSC indicated that while these types of programs can help improve
compliance with safety standards, there are limits to how well this
type of industry self-regulation can be used to protect consumers. They
indicated that there is a trade-off between consumer protection and
industry cooperation; if the requirements are too onerous, companies
might not participate in these voluntary programs. Balancing the
interests of both consumer and industry participants adds complexity in
completing CPSC's implementation of CPSIA.
CPSC Needs Better Targeting Information to Strengthen Enforcement with
CBP at Ports of Entry:
CPSC needs better targeting information to strengthen its ability to
identify risks from imported products and communicate inspection
priorities to CBP. CPSC and CBP have a cooperative relationship at
ports of entry. That is, while CPSC relies on CBP to carry out key
import surveillance and targeting activities at ports, CBP relies on
CPSC to communicate the greatest risks and its inspection priorities
among consumer products. However, CPSC has not developed formal systems
for assessing risks and focusing inspection activities with CBP.
Furthermore, CPSC does not have access to information that would enable
the agency to effectively target potentially unsafe imported products
for inspection.
Updated MOU with CBP Would Be Useful as CPSC Develops Its Risk
Assessment Methodology:
In the past, CPSC has generally used informal systems to target risks
from imported products and to conduct operations with CBP at ports of
entry with some positive results. CPSC has generally been effective
using its informal systems to target certain products for inspection,
according to several product safety experts we interviewed. For
instance, CPSC has targeted imported fireworks for increased
inspections during the summer months. CPSC has also had positive
results from its participation in Operation Guardian, a multiagency
effort to combat the increasing importation of substandard, tainted,
and counterfeit products that pose a health and safety risk to
consumers.[Footnote 36] Another program that CPSC stated has produced
positive results is an expansion of the CBP Importer Self-Assessment
Program that was initiated in October 2008. The expansion, known as the
Importer Self-Assessment Product Safety Pilot, aims to prevent unsafe
imports from entering the United States by requiring volunteer
companies to meet specified internal monitoring criteria in exchange
for priority in testing, reductions in the testing conducted, and
access to CPSC training programs.[Footnote 37] However, as discussed
above, CPSC targeted relatively few imported consumer products for
inspection under its informal system.
CPSIA requires CPSC to establish a formal risk assessment methodology
that will require updating the terms of the relationship between the
agencies. CPSC and the former U.S. Customs Service (now CBP)
established a memorandum of understanding (MOU) in 1990 that serves as
the foundation for the working relationship of the agencies for
enforcement of CPSC's authorities over imported products. For example,
the MOU provides for "the joint conduct of a mutually agreed number of
high-visibility, intensive inspection operations annually." This
provision is consistent with CPSC's informal system for targeting
risks. The MOU is now out of date and does not reflect anticipated
changes to CPSC's relationship with CBP required under CPSIA. CPSIA
requires CPSC, by August 2010, to develop a methodology for identifying
shipments of imported consumer products that are likely to violate
import provisions enforced by CPSC.[Footnote 38] A CPSC official told
us that, as part of the agency's work to develop this risk assessment
methodology, CPSC plans to create a flowchart of the current product-
entry process to identify gaps in any current CPSC authorities to stop
unsafe products at the ports. The official noted that CPSC anticipates
completing the flowchart later this year. Updating the 1990 MOU between
CPSC and CBP and thereby revisiting the roles and responsibilities of
each agency would be a useful way for CPSC to identify gaps in the
current product entry process and speed completion of its risk
assessment methodology.[Footnote 39]
Better Advance Shipment Data Would Strengthen CPSC's Targeting Efforts:
During interviews with CPSC staff and our visit to a U.S. port of entry
to determine how CPSC prevents the entry of unsafe products into the
United States, we found that CPSC does not have access to CBP data that
would provide CPSC with information about products in a shipment before
it arrives in the United States. CPSC has access to entry summary data,
which CBP generally receives shortly before a shipment enters the
United States or, in some cases, as many as 10 days after the shipment
has been released into commerce. However, CPSC does not have access to
manifest data, which is provided to CBP 24 hours before a shipping
vessel bound for the United States is loaded at a foreign port.
[Footnote 40] CPSC and CBP established a second MOU in 2002, which
superseded the 1990 MOU, specifying procedures and guidelines for
information sharing between the agencies with a particular focus on
CPSC access to CBP data systems. The 2002 MOU was intended to allow
CPSC access to both entry summary and manifest data. According to a
CPSC official, CBP has not provided CPSC with access to manifest data
because it believed the data were not specific enough for CPSC
purposes. For instance, the manifest data generally do not include the
name of the importer and may not have specific Harmonized Tariff
Schedule codes to help CPSC identify the merchandise in the shipment.
However, CPSC still believes that manifest data will help the agency
improve its targeting, as it will give CPSC more timely information on
shipments and potentially more specific information as CPSC seeks to
revise the Harmonized Tariff Schedule codes to better align them with
the categories of products they regulate. CBP also acknowledged that,
while CPSC can use the entry summary data to target future shipments
for inspection, CPSC cannot place inspection holds on shipments that
are about to depart for or are in transit to the United States without
the manifest data. In comparing CPSC border surveillance activities
with those of other federal agencies that regulate the safety of
products used by consumers, we found that FDA has a stronger capability
to target imports using CBP data (discussed further below). FDA
receives advance shipment data from CBP of all entries containing food
under FDA jurisdiction that arrive at ports, which FDA then screens
electronically against criteria it developed to detect potential
violations.
CPSC and CBP state that they have been working together to resolve
information-sharing issues. Specifically, in February 2007, CPSC
applied for access to the International Trade Data System (ITDS), which
CBP intends to be a single source for import and export documentation
that is to provide participating agencies quicker access to data and
improved ability to identify potentially unsafe shipments of consumer
products.[Footnote 41] As part of the application process, CPSC has
submitted to CBP for review an operations plan (a "Concept of
Operations" or "ConOps") and an update to the 2002 MOU with guidelines
for the exchange of information.[Footnote 42] The agencies have had
follow-up discussions on these plans; however, CBP has reported that
implementation of ITDS has been delayed. As a result, CPSC's efforts to
access more complete import data to help it better target incoming
shipments have also been delayed.CPSC staff said that they anticipate
this work will not be completed until at least 2011.
In addition to this effort, CPSIA requires CPSC and CBP to improve
information sharing and coordination. Specifically, CPSIA requires CPSC
to develop, by August 2009, a plan for sharing information and
coordinating with CBP.[Footnote 43] According to CPSIA, the proposed
plan is to consider, at a minimum, the number of CPSC staff that should
be stationed at U.S. ports and the nature and extent of cooperation
between CPSC and CBP at the ports. The plan is also to discuss the
nature and extent of cooperation between CPSC and CBP at the National
Targeting Center or its equivalent.[Footnote 44] CPSC has not completed
this plan, and it is unlikely to do so until it updates information-
sharing agreements with CBP.
A CPSC official told us that as part of developing this plan for
sharing information with CBP, CPSC is seeking to assign a staff member
to a planned CBP targeting center that would focus on health and safety
issues. This targeting center, which would be equivalent to the
National Targeting Center, would seek to identify shipments of imported
products that should be stopped at the ports for further screening and
review. A CPSC official said that, in assigning a staff person to this
targeting center, the agency would have access to CBP's Automated
Targeting System.[Footnote 45] However, creation of the health and
safety planned targeting center has been delayed, so CPSC has not been
able to place staff at the center or access CBP targeting information,
delaying its ability to better target imported products. A CPSC
official explained that the analytical approach that FDA took by
creating its own system for analyzing data would require a considerable
investment of both time and money. CPSC prefers the option of working
with CBP through the planned targeting center to leverage this
analytical capability. CPSC believes this option would be more
efficient than developing its own system to analyze data.
CPSC's Enforcement of Import Safety Authorities Is Limited by Resource
and Practical Constraints:
CPSC's enforcement of its authorities to prevent the entry of unsafe
products into the United States is limited by resource and practical
constraints. Specifically, CPSC has few staff at ports of entry and
limited analytical and laboratory support. Furthermore, although CPSC
has authority to destroy products refused admission, it lacks a source
of funding to immediately pay for the costs of destruction. In
addition, while CPSC has authority to condition the importation of
consumer products based on compliance with CPSC inspection
requirements, there are practical constraints on the agency's ability
to conduct inspections of foreign manufacturing plants.
CPSC's ability to inspect shipments for potential violations at ports
of entry is limited by resource constraints, such as few staff at ports
and limited analytical and laboratory support. In passing CPSIA,
Congress recognized the need to strengthen CPSC's resources, including
requirements that CPSC increase the number of full-time employees to at
least 500 by fiscal year 2013 and that CPSC hire additional personnel
to be assigned to U.S. ports of entry.[Footnote 46] As noted above,
CPSC had 9 compliance investigators stationed at 7 ports as of July
2009, as well as 100 product safety investigators in 48 other locations
across that country that may help to conduct periodic inspections at
ports of entry. CBP staff indicated that having a CPSC compliance
investigator collocated at ports has been useful, and during our visit
to a U.S. port of entry we saw the cooperative relationship between
agency officials. Furthermore, a CPSC official said that currently
there is limited analytical support at CPSC headquarters to assist in
import surveillance work. According to CPSC, the agency cannot
establish a greater presence at U.S. ports without having the requisite
analytical support. CPSC also has limited laboratory support for
testing potentially unsafe products and has faced significant backlogs
at various times. As of April 2009, CPSC had 28 engineers and
scientists at its laboratory. CPSC's laboratory facility is located
across the country from where a large percentage of imported goods
enter the United States. Moreover, fireworks, which are heavily
targeted for inspection, must be tested at a separate facility under
current procedures. As a result of these conditions, testing backlogs
have inhibited import surveillance efforts. In May 2009, CPSC announced
that it had secured and was in the process of outfitting a new
laboratory with enhanced testing facilities. CPSC also announced that
certain support staff from CPSC headquarters would be collocated at the
lab to assist the laboratory staff. However, the new facilities still
cannot accommodate fireworks testing. Moreover, the new facility does
not provide CPSC with a presence on the West Coast, where many consumer
products enter the United States. As discussed below, in comparing
CPSC's resources supporting border surveillance with those of other
federal agencies that regulate the safety of products used by
consumers, particularly FDA and USDA, we found that CPSC's resources
are much less than those of these other agencies.
According to CPSC and CBP, CPSC can refuse entry for products that
violate U.S. laws, but CPSC does not have immediate funding available
to subsequently destroy these products if the importers do not destroy
or export these products at their own expense. Instead, CPSC generally
asks CBP to seize unsafe products, and CBP is authorized to access the
U.S. Department of the Treasury's Forfeiture Fund to cover the cost of
product destruction. The Treasury Forfeiture Fund is also available to
CBP for other enforcement purposes, so that any money CBP uses for
destroying seized products reduces the amount of money available to CBP
for other purposes. Moreover, CBP is concerned that the costs of
product destruction are likely to increase as CPSC fully implements
CPSIA. Although CBP requires that formal entries be covered by a bond,
which is another funding source that may be used to cover the cost of
product destruction, we found that CBP has not pursued bonds for that
purpose because they may not cover the full cost of destruction. CPSC
officials also noted that bonds are not immediately available for
product destruction but may only be recovered to reimburse destruction
costs. However, a new mandate in CPSIA requires CPSC to work with CBP
to set bond amounts sufficient to cover these costs.[Footnote 47] CBP
and CPSC's efforts to implement this requirement are still in process.
Given the limited resources immediately available for product
destruction, CBP indicated that CPSC and other federal agencies might
explore other funding sources for this purpose. However, we previously
found that estimating the cost of destroying consumer products is
difficult given the wide range of products CPSC oversees, making it
challenging to determine the appropriate size of a dedicated fund. In
addition to setting aside enough funds for product destruction, CPSC
would have to consider establishing parameters on the use of any
funding source it administers.[Footnote 48]
While CPSC has broad authority to conduct inspections of manufacturers
and importers, significant resource and practical constraints limit its
ability to conduct traditional inspections of foreign manufacturing
plants. CPSC is required by rule to condition the import of a consumer
product on the product manufacturer's compliance with CPSC inspection
and recordkeeping requirements.[Footnote 49] CPSC does not conduct
inspections in foreign countries, and CPSC and many product safety and
international trade experts cite several constraints on its ability to
do so. Specifically, these parties state that U.S. inspectors would
likely need the consent of both the foreign manufacturer and the
foreign government to conduct an inspection. Other experts stated that
such consent from a foreign government, if granted, may be accompanied
by a request for the same rights to inspect U.S. manufacturing plants.
Another constraint on inspections of foreign manufacturers is that such
a program would need to be prohibitively large in order to be
effective, perhaps larger than CPSC's domestic inspection program. As
noted earlier, CPSC had about 100 product safety investigators in 48
locations to conduct its domestic inspections as of July 2009. Also, it
is not clear what CPSC would look for when inspecting foreign
manufacturing plants given that CPSC evaluates the final product for
compliance with product safety regulations rather than the production
process. As noted above, CPSC may condition the import of consumer
products on cooperation with inspections. However, ensuring that the
specific manufacturer's products do not enter the United States would
be difficult without detailed knowledge of individual companies' supply
chains, which could be gained through inspection of the manufacturer's
records.[Footnote 50] Due to these legal and practical constraints,
CPSC stated that expanding its international education and outreach
activities rather than conducting inspections of foreign manufacturing
plants would more effectively prevent the entry of unsafe consumer
products.
Authorities of Select Agencies Are Comparable to CPSC's, but FDA and
USDA's Border Surveillance Activities and Overseas Presence Provide
Useful Information for Strengthening CPSC's Implementation of Its
Authorities:
CPSC's regulatory authority to prevent the entry of unsafe imports is
generally comparable to that of certain other federal agencies with
substantial responsibility over the safety of products entering the
United States. However, various border surveillance activities of FDA
and USDA--particularly with respect to obtaining advance shipment data,
allocating staff resources to border operations, and targeting
capabilities, as well as efforts to work with foreign governments to
educate foreign manufacturers about U.S. safety standards--provide
useful information for strengthening CPSC's efforts to prevent the
entry of unsafe products.
CPSC's Authorities to Prevent the Entry of Unsafe Products Are
Generally Comparable to Those of Other Federal Agencies:
CPSC's authorities to prevent the entry of unsafe products are
generally comparable to the authorities of four other federal agencies:
FDA, which oversees, among other things, food, drugs, and medical
devices; NHTSA, which, through delegated authority of the Secretary of
Transportation, oversees motor vehicles and equipment; Food Safety and
Inspection Service (FSIS), an agency of USDA that oversees egg
products, poultry, and meat; and Animal and Plant Health Inspection
Service (APHIS), an agency of USDA that oversees plants and animals.
CPSC's authorities provide it with similar or stronger authority to
require or engage in certain activities compared with the authorities
of the other agencies we studied.
* Safety standards: All of these agencies have authority to regulate
and enforce product safety standards or bans relevant to products under
their jurisdiction.[Footnote 51]
* Border surveillance: All of these agencies except NHTSA appear to
have specific authority to conduct border surveillance activities and
broad authority to refuse entry to items that fail to comply with
relevant standards, among other things.[Footnote 52] NHTSA officials
told us that, like CPSC, NHTSA requests that CBP detain and seize
products at the border on its behalf.
* Product certification/testing: Similar to FDA, manufacturers must
certify to CPSC that their products comply with relevant standards, and
this certification must be based on a reasonable testing program or, in
the case of certain children's products, the tests must be performed by
third parties.[Footnote 53] Under FSIS, containers of eggs, egg
products, poultry, and meat must be labeled as having passed
inspection. Although NHTSA authorities require manufacturers of
vehicles and equipment to certify that products comply with applicable
federal safety standards, these certifications are not required to be
based on testing.
* Temporary hold at ports: CPSC, FDA, FSIS, and APHIS have the
authority to temporarily hold shipments at U.S. ports for inspection.
* Foreign inspection: Like FDA and FSIS, CPSC is not expressly
prohibited from requesting consent to inspect foreign facilities.
Specifically, CPSC may request inspection of foreign manufacturing or
distribution facilities, third-party testing laboratories, or
conveyances used to transport consumer products in commerce.[Footnote
54] As discussed above, CPSC does not conduct foreign inspections. Both
FSIS and FDA have been successful in obtaining access to foreign
facilities for the purpose of inspections or audits where incentives
are strong for foreign entities to grant this access. For example,
access is generally provided for requests that are tied to applications
or audits before products may be eligible for import into the United
States.[Footnote 55] FDA officials told us that in practice, if a
foreign firm refuses to permit such an inspection, FDA can sometimes
refuse admission of products offered for import into the U.S. For
example, the refusal to permit an inspection could lead to a product
not receiving a required pre-market approval or the refusal to permit
an inspection, combined with other information, could support a
determination of the appearance of a violation. According to NHTSA, it
does not have the authority to inspect foreign facilities for the
manufacture of vehicles and vehicle equipment imported into the United
States.
* Consent to local court jurisdiction: Based on our interviews with
officials at the federal agencies we studied, none of the agencies
requires foreign manufacturers to consent to the jurisdiction of local
courts with respect to enforcement actions. Some agencies, including
CPSC, told us they do not see a need for this requirement, as they have
been able to effectively carry out their enforcement duties under
existing authorities. For example, foreign manufacturers seeking to
offer motor vehicles for import into the United States are required by
statute to designate a U.S. resident or firm as its agent to receive
service of notices and process in administrative and judicial
proceedings, and service on the agent is deemed to be service on the
foreign manufacturer or importer.[Footnote 56] Also, FSIS told us that
they expect foreign governments to carry out enforcement actions for
their manufacturers that are certified to export to the United States.
CPSC noted that it has satisfied its enforcement objectives by pursuing
the domestic partners--manufacturers, importers, and retailers--of the
foreign manufacturer without needing to resort to adjudicative
proceedings. For example, in June 2009, CPSC reached a $2.3 million
settlement with Mattel, Inc., regarding the importation of toys made in
China that violated a federal ban on paint containing lead. [Footnote
57] Furthermore, CPSC also has the ability to settle enforcement
actions with foreign parties. For example, in July 2009, CPSC reached a
$50,000 settlement with a Hong Kong corporation with offices in the
United States regarding the importation of toys manufactured in China
that also violated the commission's lead paint ban.[Footnote 58]
Finally, CPSC staff we interviewed stated that the agency prefers to
expand its international education and outreach programs rather than
require foreign manufacturers to consent to U.S. jurisdiction to
effectively prevent the entry of unsafe products, although they
acknowledged that consent to jurisdiction or a requirement of a U.S.
agent for service of process would be helpful.[Footnote 59] Appendix II
contains a more detailed discussion of the elements of establishing
personal jurisdiction in U.S. courts.
The requirements of the Consumer Product Safety Act appear to demand
more from manufacturers than NHTSA with respect to preventing the entry
of unsafe imports. NHTSA's key authorities to ensure the safety of
imported goods are to prescribe mandatory vehicle safety standards and
to require foreign and domestic manufacturers to certify compliance
with these standards. However, these certifications are not required to
be based on a testing program, unlike CPSC's new certification
requirements for children's products, nor are the results of any
testing required to be reported to NHTSA as a condition to entry.
Appendix III contains a more detailed description of the agencies' key
authorities for preventing the entry of unsafe products.
Where key differences exist in these agencies' authorities, they appear
to be due to differences in the types of products under an agency's
jurisdiction and the particular risks that are presented. As such,
these differences are not directly applicable to CPSC as it improves
its ability to ensure the safety of imported goods.
* FSIS's foreign country equivalency: A major feature of FSIS's
framework for ensuring the safety of imported meat, poultry, and egg
products is a requirement that foreign countries have a certified food
safety system equivalent to that of the United States. As of fiscal
year 2008, 34 foreign countries were eligible to import these products
into the United States. According to an FSIS budget document, the
United States invests substantial resources, over $800 million in
fiscal year 2008, in the inspection of domestic products.[Footnote 60]
The amount of funds spent on domestic inspection is relevant given that
the concept of foreign equivalency is predicated on there being a
domestic inspection program. As such, it is unclear how FSIS's country
equivalency program could be adapted for CPSC given that CPSC does not
have comparable resources for the inspection of domestic products, with
a budget of about $80 million in fiscal year 2008 for all of its
activities. Furthermore, the concept of equivalency for meat, poultry,
and egg products is established in a 1994 multilateral trade agreement,
to which the United States is a signatory.[Footnote 61] According to
the United States Trade Representative, it is not clear whether any WTO
Agreement to which the United States is a party specifically precludes
application of an equivalency requirement to consumer products.
* FDA's preapproval of certain drugs and medical devices: In addition,
FDA requires drug manufacturers to obtain prior approval for marketing
certain drugs in the United States and for selling certain medical
devices.[Footnote 62] However, FDA's prior approval requirement would
be inefficient for CPSC given the diversity of products it oversees and
the frequency with which these products change or are updated. CPSC
oversees thousands of types of consumer products, and many of the
products it oversees, especially toys, change or are updated every
year.
Other key statutory differences across agency authorities need not be
addressed by providing CPSC with new authorities because CPSC officials
have told us they already consider CPSC to have similar authorities.
* Agreements with foreign governments and overseas presence: FDA is
authorized to participate through appropriate processes with
representatives of other foreign countries to reduce the burden of
regulation, harmonize regulatory requirements, and achieve appropriate
reciprocal arrangements, including international agreements such as
mutual recognition agreements, agreements to facilitate commerce in
devices, and memorandums of understanding, among other things.[Footnote
63] As discussed below, CPSC already has MOUs with foreign governments,
including China and the EU, and is finalizing plans for its first
overseas office in Beijing, China, in 2010.
Other Federal Agencies' Border Surveillance and Overseas Activities to
Prevent the Entry of Unsafe Products May Be Useful for CPSC to
Consider:
As CPSC considers ways to improve its ability to prevent the entry of
unsafe imports, various agencies' border surveillance and outreach
activities to foreign governments and industry provide useful
information. FDA, FSIS, and APHIS have expansive border surveillance
activities based on the amount of data obtained on incoming shipments,
number of staff supporting border surveillance operations, and
targeting programs and information technology systems that help to
integrate data from various sources for use in making border entry
decisions. These capabilities enable these agencies to screen incoming
shipments for a greater number of risks than CPSC does. According to
data provided by CPSC, the agency has generally focused on relatively
few categories of consumer products since 2001, specifically toys,
fireworks, lighters, and electrical products (such as holiday lights
and extension cords).
* FDA and FSIS have better access to data for screening incoming
shipments than CPSC. FDA receives shipment data from CBP for all
entries under FDA jurisdiction that are imported or offered for import,
which FDA then screens electronically against criteria it developed to
detect potential violations, including information from domestic
surveillance and outreach to foreign governments. In addition, the
Public Health Security and Bioterrorism Preparedness and Response Act
of 2002 requires that FDA be given advance notice on shipments of
imported food. FDA allows importers to provide this data no more than
30 days in advance of the date of arrival. This advance information
helps FDA determine whether the food potentially poses a bioterrorism
or other significant health risk such that FDA should deploy resources
to the port of arrival so that an inspection can be conducted before
the product enters the United States. FDA officials told us that this
information has been so important in screening food shipments for
potential violations that they are considering expanding prior
notification requirements to all products the agency oversees. FSIS
requires by regulation that various information accompany shipments of
meat, poultry, and egg products in order to be considered for admission
into the United States, including a foreign health certificate. As
discussed earlier, while CPSC receives entry summary data regarding
shipments already released into commerce, CPSC does not receive data on
incoming shipments prior to their arrival at U.S. ports of entry,
though CBP receives such data as much as 24 hours before the shipment
is loaded in the foreign port. Without advance shipment data, CPSC
lacks information that other agencies have found useful in screening
incoming shipments for potential safety violations.
* FDA and USDA have significantly more staff supporting border
operations than CPSC. Federal agencies assign staff resources to border
operations to identify and refuse admission to potentially unsafe
imported products. NHTSA has no staff dedicated to border operations,
but instead relies on CBP to screen incoming shipments and third-party
laboratories to test pulled shipments. However, FDA, FSIS, and APHIS
assign significantly more staff resources to border operations.
According to FSIS officials, the agency physically examines 100 percent
of meat, poultry, and egg product shipments presented for import with
about 75 inspectors located at approximately 150 facilities near 35
border entry points. In addition, FSIS employed 20 import surveillance
officers as of fiscal year 2009. APHIS officials told us 100 percent of
plants and animals are inspected in cooperation with CBP. Because of
the high percentage of shipments that are inspected, staff resources
are accordingly greater. For example, about 1,800 port staff had been
assigned to inspect fruit and plants at 139 ports of entry as of 2003.
FDA examines approximately 1 percent of food presented for import and
has requested about $382 million for fiscal year 2010 for activities
that support import safety. This amount would fund approximately 700
staff supporting import examinations alone, including port operations,
of which 78 percent would be field based. FDA personnel cover most
ports of entry into the United States, including 297 ports in fiscal
year 2008, but for the ports where FDA does not maintain a normal
presence, it coordinates with CBP to ensure it is notified of relevant
incoming shipments for which examination and/or sampling may take
place. FDA's border inspection activities are supported by compliance
programs for agency field staff to use in carrying out inspections,
sample collections, and analyses, among other things. For food safety
alone, there are approximately 25 compliance programs and 12 that cover
different imported foods.[Footnote 64] While FDA, FSIS, and APHIS have
significant resources devoted to the port and overseas activities, they
still face significant challenges in ensuring that products entering
the United States are safe for consumers. As discussed earlier, CPSC
has 9 compliance investigators at seven ports of entry, as well as
about 100 product safety investigators located across the United States
who work episodically to support the import surveillance program.
Although the missions of FDA, USDA, and CPSC differ, CPSC's staff
resources supporting border surveillance are much less than the staff
resources of these other agencies and may not be adequate to prevent
unsafe products from entering the United States.
* FDA and USDA have more sophisticated information technology systems
and analytical support to target potential risks at border entry
points. FDA, FSIS, and APHIS invest significant resources in
information technology systems that support border surveillance
efforts. To oversee inspection of plants and animals, CBP created
positions in each of its 20 district offices for agriculture liaisons.
These liaisons not only advise CBP on border surveillance operations
but also report back to APHIS on risks detected at the border for the
purpose of expanding targeting operations. These liaisons have access
to CBP's Automated Targeting System, a computer system that stores
detailed information from cargo manifests and other documents that
shipping companies are required to provide before shipments arrive at
ports for inspection.[Footnote 65] This system allows border staff to
focus inspections on higher risk cargo. FSIS invests substantially--
nearly $1 billion--in data infrastructure systems to assist its border
inspections by linking inspection data with other public health
information that is designed for FSIS to quickly and accurately
identify trends and vulnerabilities affecting meat, poultry, and egg
products. In addition, FSIS has developed a centralized computer
system--the Automated Import Information System (AIIS)--that links all
ports and tracks prior inspection results from each country and each
foreign establishment for use in generating the type of inspection
required on incoming shipments.[Footnote 66] FDA also uses an
electronic environment--Operational and Administrative System for
Import Support (OASIS)--to screen shipments presented for entry for
relative risks and for making entry or inspection decisions.[Footnote
67] OASIS links with other data systems within FDA to leverage the
latest information relating to public health. Also, FDA staff manually
enter criteria into OASIS from sources such as import alert documents
so that products can be flagged as they enter U.S. customs territory
for the appearance of violations. According to FDA officials, there are
currently about 270 import alerts in effect.[Footnote 68] FDA officials
also told us that the overseas audits and direct communication with
foreign governments provide useful information in helping border
surveillance agents make entry determination decisions. As discussed
earlier, CPSC targets few products for border inspections and has not
developed formal systems for assessing risks and providing port staff
with risk management tools.
Whereas border surveillance efforts are geared toward intercepting
potentially unsafe products at U.S. borders, outreach activities
focused overseas may prevent potentially unsafe products from being
shipped to U.S. ports. To this end, FDA and USDA assign staff to
permanent positions in foreign countries and send staff overseas on a
temporary basis to conduct educational workshops, as well as to conduct
audits and inspections. Furthermore, some agencies have established
cooperative agreements with foreign agencies to facilitate product
safety.
* FDA and APHIS overseas outreach efforts help inform agencies about
unsafe products. APHIS has more than 80 people around the world working
with foreign embassies on plant and animal health issues. FDA announced
the opening of offices in three cities in China in November 2008, and
it has also announced plans to place technical experts and inspectors
in four other regions, including Europe, India, Latin America, and the
Middle East.[Footnote 69] These staff would be supported by
approximately 8 staff in FDA headquarters in the United States. In
addition, FDA has plans to hire 20 locally employed staff. FDA staff
told us that an in-country presence is useful in preventing the entry
of unsafe products because it improves the information border agents
have to make entry decisions and allows the agency to train foreign
establishments about compliance requirements. As discussed in more
detail later, CPSC states that, with increased resources, it plans to
open its first overseas office in Beijing, China, to facilitate safety
efforts with one of the largest exporters of consumer products to the
United States.
* FDA and FSIS conduct temporary visits, audits, or investigations in
foreign countries that help to build foreign awareness of U.S. product
safety laws. FSIS conducts on-site audits of foreign manufacturers as
part of its systems equivalence determinations of foreign countries'
food safety systems. FDA officials told us that the audits and
announced inspections it conducts of overseas manufacturers are very
useful in training these manufacturers about U.S. standards.
Furthermore, FDA has reported that it has engaged in a variety of
efforts with foreign governments to build foreign capacity and provide
technical assistance. For example, they report holding regional
workshops in Peru and China, participating in a multilateral food
safety meeting geared toward developing a rapid alert system, and
auditing Chinese government inspectors during their review of 13
Chinese firms to detect drug residues in aquaculture products. As
discussed earlier, CPSC does not conduct foreign inspections. However,
CPSC staff have conducted visits to foreign manufacturing plants with
the permission of the foreign government. CPSC also has plans for
conducting three outreach and training events each for foreign
government officials and foreign manufacturers in fiscal year 2010, but
the agency is limited in its outreach efforts due to limited numbers of
staff.
* FDA and FSIS have actively engaged with foreign governments on food
safety. FDA has actively engaged with foreign governments to develop
cooperative arrangements and agreements, including a substantial number
of international government-to-government agreements. FDA's Web site
indicates a total of 63 MOUs or other cooperative agreements with about
25 different foreign countries.[Footnote 70] FSIS has also negotiated
government-to-government agreements as part of the food safety system
equivalency determination process. Specifically, some countries have
negotiated alternative sanitary measures to obtain this certification.
As of July 2009, CPSC has established MOUs for the purpose of consumer
product safety with 16 foreign agencies, as discussed later, but this
activity has occurred fairly recently and over the last few years.
Information Sharing and Cooperation among Countries Provide Way to
Bridge Differences and Strengthen CPSC's Implementation of Its
Authorities, but CPSC Lacks a Comprehensive Plan to Guide Its Work:
Australia, Canada, the EU, Japan, and the United States have some
similar authorities for consumer product safety, but institutional
structures to implement these authorities vary from country to country,
reflecting unique national approaches. Countries also share similar
challenges--such as inconsistent laws and standards and ineffective
cooperation and liaison among agencies involved in consumer product
safety--and national governments' efforts to address import safety
challenges have intensified in light of the growing volume of imports
and recent consumer safety incidents. Among officials we interviewed,
there is broad consensus that continued cooperation among governments,
regulators and multilateral organizations can improve consumer product
safety policy and enforcement consistency and, ultimately, the
effectiveness of import safety frameworks. CPSC's Office of
International Programs and Intergovernmental Affairs participates in
numerous activities with other countries and multilateral
organizations. However, CPSC does not have comprehensive plans to guide
its work with these countries and multilateral organizations due to
resource constraints and other priorities, according to CPSC officials.
While Similarities in Import Safety Authorities and Challenges Exist
among Certain Countries, Their Institutional Structures and
Implementation Reflect Unique National Approaches:
Import safety authorities in Australia, Canada, the EU, Japan, and the
United States reflect certain shared values and experiences. According
to the OECD, a fundamental objective of consumer product safety policy
is to prevent consumers from suffering harm as a consequence of using
products that present an unreasonable risk of injury. While these
countries have similar authorities, however, the implementation of
those authorities may be different. For example, all the countries
monitor both domestically manufactured and imported products, and all
conduct some type of product testing and/or sampling. However, some of
the countries monitor goods on their own initiative, while others
operate on the basis of complaints that they receive about particular
goods and products.
According to the officials representing the countries we reviewed, none
of those countries has the authority to conduct an extraterritorial
inspection of the facilities of a foreign manufacturer that exports
products to that country. In most cases, these officials stated that
the countries have been more successful in working with the exporting
country and its manufacturers in order to correct problems that may
arise. These officials also stated that none of the countries we
reviewed has the authority to require foreign manufacturers to consent
to local jurisdiction. U.S. Embassy and Australian government officials
indicated that, under current law, Australia could ask foreign
jurisdictions to enforce Australian consumer product safety laws;
however, the Australian government prefers other methods, such as
approaching manufacturers directly to raise safety concerns.
The approach countries take to consumer product safety begins
fundamentally with how they define "safe" and "unsafe" products. The
definitions vary considerably from country to country, as indicated in
appendix IV. According to a report by the OECD, most countries apply
broad principles to determine whether a product can be defined as safe.
[Footnote 71] For example, according to this report, in some countries
(Japan, the United States, and the EU) all products must meet a
positive standard--that is, they should be safe for consumers to use or
consume prior to market distribution. Businesses selling unsafe goods
may be subject to regulatory action, regardless of whether the product
has caused a specific accident, injury, or harm to a consumer. In other
countries (Australia and Canada), according to the OECD report,
products must not breach a negative standard--that is, once the goods
are placed on the market they should not carry an unreasonable risk of
injury or death. The report notes that producers are held liable for
the negative effects of their products once placed on the market.
According to officials, some variations exist with other authorities.
They noted that in most of the countries we reviewed only a relatively
small number of imported consumer products are subject to mandatory
standards. However, according to a senior representative of an
industrial association in Europe, the wide variety of product standards
among countries, combined with variable concepts and legal
interpretations applied by governments makes it difficult for industry
to ensure safety and for countries to coordinate enforcement efforts.
There are also differences in the case of product certification.
Officials stated that neither Australia nor Canada requires
certification for imported products. According to Japanese government
officials, certain imported and domestic products in Japan are subject
to product testing and cannot be sold in Japan without certification to
prescribed standards. In the EU, according to official documentation,
businesses must carry out conformity and safety assessments of their
products in accordance with the General Product Safety Directive
(GPSD),[Footnote 72] and businesses are required to certify that their
products are safe, as defined under GPSD. The documentation indicates
that for some products self-declaration is sufficient, but other
products require third-party verification.
According to the OECD report on consumer product safety, institutional
structures for product safety can also vary from country to country,
which can sometimes create challenges for coordination within and among
countries and, in many cases, accounts for differences in enforcement
and implementation of authorities. The report states that in Canada,
consumer product safety policy, development, enforcement, information,
and education functions are in one organization, Health Canada, with
the provinces retaining some enforcement responsibilities. In the
United States, CPSC is the primary agency responsible for implementing
and enforcing federal consumer product safety laws and establishing
consumer product safety policy. The OECD report further notes that some
countries have institutional arrangements that separate policy and
enforcement functions. In Japan, for example, policy responsibility is
spread across the government in a range of departments, with a central
coordinating function in a central policy agency (the Cabinet Office).
Certain other countries, such as Australia, have regionally focused
policy and enforcement structures for consumer product safety that
reflect a division of powers and responsibilities between the national
government and states, provinces or regions. In the EU, policy
responsibilities lie with the European Commission, the executive arm of
the EU responsible for defining and implementing its policies and
running its programs. However, individual EU member countries are
responsible in their respective territories for enforcement--market
surveillance, product monitoring and testing, and possible restrictive
or corrective actions.
Countries also share similar challenges as they respond to changing
demands in the international market place. Similar to the United
States, national governments' efforts to address import safety problems
have intensified in light of the growing volume of imports entering
each country and recent consumer safety incidents. According to the
OECD report, many countries face enforcement challenges at both
domestic and international levels, including:
* finite resources;
* inconsistent laws, regulations, standards, and sanctions within
countries and across borders;
* ineffective cooperation and liaison among agencies involved in
consumer product safety enforcement; and:
* insufficient sharing of injury information across borders.
Governments have taken a variety of actions to address these
challenges, including enacting new laws and regulations and, in some
cases, they have created new organizations to address new consumer
safety challenges. See appendix IV for more information.
Engagement among Countries Provides Ways to Address Shared Import
Safety Challenges:
Officials in Australia, Canada, the EU, Japan and the United States
indicate that a mix of bilateral (country-to-country) and multilateral
(involving multiple countries) exchanges and agreements among importing
and exporting countries has been useful in addressing import safety
challenges. The CPSC and its counterparts in other countries have taken
a particularly active role in engaging China on consumer safety issues
to create more transparent and cooperative relationships.
According to the OECD's 2008 Report on Consumer Product Safety,
bilateral engagement helps facilitate an exchange of information
regarding consumer product safety issues and provides a mechanism for
coordinated action against unsafe products. In the United States,
CPSC's Office of International Programs and Intergovernmental Affairs
administers MOUs between CPSC and consumer product safety entities in
other countries, maintains regular contact with key exporting
countries, and attends meetings and discussions sponsored by
multilateral organizations. According to CPSC, as of June 2009, the
office had established MOUs for the purpose of consumer product safety
with 16 foreign agencies in Brazil, Canada, China, the EU, Israel,
South Korea, Peru, Chile, Costa Rica, India, Japan, Mexico, Taiwan,
Egypt, Columbia, and Vietnam. CPSC's Office of International Programs
also conducts training sessions in various countries to explain U.S.
import safety processes and procedures. According to CPSC, staff hold
monthly teleconferences with the agency's counterparts in Canada,
China, and the EU, and every two months CPSC holds a three-way
teleconference with Mexico and China to provide additional
opportunities for engagement. In 2008, CPSC created a Chinese-language
page on the CPSC Web site and, not long after, a Vietnamese-language
page to help facilitate information sharing. The pages provide
information about U.S. product safety requirements, including relevant
regulations and standards for products bound for the U.S. market, as
well as information about the new CPSIA.
Over the last few years, CPSC has increased its bilateral engagement
with China. According to CPSC, the first U.S.-China Product Safety
Summit was held in Beijing in 2005 and culminated in a joint Action
Plan on Consumer Product Safety. CPSC and its counterpart in China, the
General Administration for Quality Supervision, Inspection, and
Quarantine (AQSIQ), established four working groups focused on
fireworks, toys, lighters, and electrical products. According to CPSC,
a third summit will be held in October 2009 and will build on the
previous two, with the goal of institutionalizing a culture of product
safety among Chinese consumer product manufacturers and exporters. In
2005, CPSC established a China Program Plan as a way of managing CPSC's
various China-related activities and as the basis for an overall
strategy to promote the safety and compliance of Chinese consumer
products exported to the United States. Although the plan is to be
updated on an annual basis to account for changing conditions and new
opportunities for progress, CPSC has not updated the China Program Plan
since 2007. According to a senior CPSC official, the fiscal year 2008
and 2009 plans were essentially the same as the 2007 plan. He stated,
however, that a revised China Program Plan for 2010 will be submitted
to the reconstituted commission and will be published when approved.
Other countries have also established bilateral agreements with China.
The European Commission engages in international contacts and
cooperation and has, for instance, agreed on a Memorandum of
Understanding with China's AQSIQ.[Footnote 73] According to the EU, one
of the key initiatives launched by the EU and China has involved the
RAPEX system, the EU's Rapid Alert System for nonfood consumer
products.[Footnote 74] In May 2006, according to EU documentation, the
European Commission decided to provide China's AQSIQ with access to the
RAPEX system--specifically its notifications on products coming from
China. EU officials report that China agreed to investigate all
reported cases of dangerous products of Chinese origin and report back
to the EU on the results, including withdrawals of export license and
other corrective actions.[Footnote 75] Also, EU officials state that
certain individual EU Member States have established limited bilateral
contacts with China. According to Health Canada, Canada signed an
agreement with China on import safety in 2007. A summit between China,
the EU, and the United States occurred in November 2008 to strengthen
consumer product safety trilateral cooperation, according to U.S. and
EU documents. As a key exporting nation, China has revised some of its
own laws, regulations, and procedures in response to high-profile
recalls of Chinese-made goods and the consequent international
engagement on these issues, according to a senior CPSC official. He
indicated that an example of such a change occurred in March 2009, when
the Chinese National Institute of Standardization approved
Administrative Guidelines for Safe Consumer Product Manufacturing that
emphasizes the role of manufacturers in ensuring consumer product
safety. In addition, the CPSC official stated that China's AQSIQ had
reported to CPSC that it has increased significantly the inspection of
paint on export toys and closed down many factories that failed to
implement a government requirement of selecting paint suppliers for
toys only from a government-approved list.
Multilateral engagement on consumer product safety issues provides
other ways to encourage sharing of information and lessons learned on
consumer product safety among a larger group of nations. Organizations
such as OECD, the Asia-Pacific Economic Cooperation (APEC), and the
International Consumer Product Safety Caucus provide additional
frameworks for cooperation. U.S. and other officials believe that
continued cooperation and coordination among governments and regulators
can improve policy consistency and enforcement and, ultimately, the
effectiveness of consumer product safety frameworks, particularly since
consumer safety enforcement challenges are shared by most nations.
On October 23, 2008, the OECD's Committee on Consumer Policy hosted its
first Roundtable on International Consumer Product Safety, with an aim
to examine consumer product safety trends and challenges at both
domestic and international levels. The Director of CPSC's Office of
International Programs and Intergovernmental Affairs attended this
meeting, as did other OECD member nation representatives. The final
report identified a number of key issues shared by member nations and
initiatives for the future.[Footnote 76] CPSC representatives have also
participated in APEC discussions concerning consumer product safety. In
2007, APEC leaders agreed on the need to develop a more robust approach
to strengthening food and consumer product safety standards and
practices in the region, using scientific, risk-based approaches and
without creating unnecessary impediments to trade, according to APEC
documents. APEC members reconvened in 2009 to determine future work on
consumer product safety. CPSC's Chairman and three staff participated
in an APEC regulators' dialogue on toy safety in August 2009 in
Singapore aimed at strengthening information exchange among APEC
members' product safety officials.
The International Consumer Product Safety Caucus is another platform
that facilitates the exchange of information on consumer product safety
issues in the area of governmental policy, legislation and market
surveillance, with a view to strengthening collaboration and
cooperation among governments and regulatory agencies around the world.
Current active members include Australia, Canada, China, the EU, Korea,
Japan, and the United States (represented by CPSC). The caucus meets at
least twice a year.
CPSC Has Not Developed Long-term Plans for International Activities:
While CPSC participates in numerous activities with other countries and
multilateral organizations to establish and strengthen coordinated
actions against unsafe consumer products, and has established MOUs with
16 foreign agencies for this purpose, CPSC does not have plans covering
its work with these countries and multilateral organizations--except
for China. According to CPSC, this is due to resource limitations in
CPSC's Office of International Programs and Intergovernmental Affairs
(as discussed earlier, the office has four staff) and because of its
focus on China as the single largest source of foreign-made products. A
senior CPSC official stated that with the creation of an additional
staff position in the Office of International Programs, the office
plans to expand its program planning to better address other countries.
However, without a long-term plan that incorporates all the office's
activities, it is difficult to accurately assess current and future
resource needs and take best advantage of opportunities for future
coordination and cooperation among importing and exporting nations that
CPSC considers integral to preventing the entry of unsafe products.
Long-term planning is particularly important for CPSC's Office of
International Programs and Intergovernmental Affairs because of the
diverse nature of its responsibilities and to ensure consistency in
CPSC's policies.
CPSC Has Established Annual Goals and Short-term Plans to Prevent the
Entry of Unsafe Products, but Lacks a Long-term Plan for the Future:
CPSC has established annual goals and short-term plans to prevent the
entry of unsafe products but lacks a long-term plan to address the
agency's growing role in import safety. Without a long-term plan, CPSC
is not fully prepared to use new authorities granted in CPSIA, nor is
it able to effectively address the safety of imported products through
international means or to appropriately allocate any potential
increases in agency resources.
CPSC Has Established Short-term Plans and Annual Goals for Import
Safety:
In May 2009, CPSC submitted a 2010 Performance Budget Request to
Congress, which contains a section called the Import Safety Initiative.
This initiative has three key principles: (1) assure that product
safety is built into manufacturing and distribution processes from the
start, (2) increase enforcement at the border to stop dangerous goods
from entering the country, and (3) enhance surveillance of the
marketplace to remove unsafe products from store shelves. These three
principles are consistent with principles established on a
governmentwide basis in 2007. In particular, the principles are
consistent with those established by the Interagency Working Group on
Import Safety, of which CPSC was a part.[Footnote 77] The working group
issued an Action Plan for Import Safety in November 2007 that
established three organizing principles: (1) prevention, which means to
prevent harm in the first place by working with the private sector and
foreign governments to adopt an approach to import safety that builds
safety into manufacturing and distribution processes; (2) intervention,
which means to act swiftly and in a coordinated manner when problems
are discovered to seize, destroy, or otherwise prevent dangerous goods
from advancing beyond the point of entry; and (3) response, which means
to take swift action to limit potential exposure and harm to the
American public in the event an unsafe import makes its way into
domestic commerce.
As part of the governmentwide strategy, CPSC developed its Import
Safety Initiative, which contains annual goals that are consistent with
the initiative's key principles, but it is a short-term plan. For
example, to help assure that product safety is built into manufacturing
and distribution processes from the start, CSPC states that it plans to
conduct three outreach and training events for foreign government
officials in 2010 and three outreach and training events for foreign
manufacturers. CPSC also has a short-term plan for how it will manage
its various China-related activities and states that, for 2010, staff
will review and update this plan. To increase enforcement at the
border, CPSC states that it plans to increase the number of full-time
staff working at U.S. ports and to increase the number of sample
products screened at the ports. CPSC's Import Safety Initiative also
links goals to requests for increased resources. For example, CPSC
states that, with increased resources, it plans to increase its
presence at U.S. ports of entry and open its first overseas office in
Beijing, China.
CPSC officials have described to us other short-term plans that they
developed to respond to requirements and authorizations in CPSIA. For
example, as discussed earlier in this report, CPSC's decision to assign
additional full-time staff to ports responds to Section 202 of CPSIA,
which requires CPSC to hire personnel to be assigned to duty stations
at U.S. ports of entry, or to inspect overseas manufacturing
facilities, subject to the availability of appropriations. In its
Import Safety Initiative, CPSC requests funding for 10 additional staff
to be assigned to ports in 2010. A CPSC official with whom we spoke
said that he expects the number of staff assigned to ports to grow from
its current level of 9 to about 50 over the next few years. However,
CPSC has conducted limited analyses of how it plans to assign
additional staff to ports in the coming years, and standard operating
procedures that describe compliance investigators' roles and
responsibilities at ports of entry have not been updated since 1989.
CPSC officials acknowledged the need to update these procedures. CPSIA
also requires CPSC, as discussed earlier in this report, to develop a
methodology for identifying shipments of imported consumer products
that are likely to violate import provisions enforced by CPSC due by
August 2010. CPSC, as noted earlier, has taken steps to develop a plan
for sharing information and coordinating with CBP, but it is unlikely
that CPSC will complete this plan by August 2009, as required under
CPSIA, because of delays in updating its agreements with CBP.
CPSC Has Recognized the Need for U.S. Consumer Product Safety Policy to
Comply with WTO Obligations and International Trade Agreements:
In undertaking its planning efforts, CPSC has recognized the need for
U.S. consumer product safety policy to comply with World Trade
Organization (WTO) obligations and international trade agreements--a
positive recognition on CPSC's part. A CPSC official involved in
international education and outreach activities said that, in working
to address U.S. concerns about the safety of imported products, it is
also critical to comply with WTO rules. The official said there are
statutory requirements--namely, the Trade Act of 1979--mandating U.S.
standards for complying with international trade agreements. He said
that CPSC has had a productive working relationship with USTR in the
past, and that CPSC is looking to formalize its working relationship
with USTR in the future by developing internal standard operating
procedures for consulting with USTR. The official said that the
procedures would be useful to CPSC in identifying issues that should
have USTR's input before they are finalized. CPSC has also recognized
the importance of international trade agreements through its work with
international groups, such as OECD, as discussed previously in this
report. In particular, CPSC has recognized that the WTO Agreements on
Technical Barriers to Trade--which establishes rules for preparing,
adopting, and applying technical regulations, standards, and conformity
assessment procedures--serves to encourage uniformity and
predictability in national consumer product safety regimes.
CPSC Lacks a Long-term Plan to Prevent the Entry of Unsafe Products:
Although CPSC has established short-term plans and annual goals to
prevent the entry of unsafe products, the agency has not developed a
long-term plan for addressing its import safety work. In particular,
CPSC has not updated its agencywide Strategic Plan, which was issued in
2003 and was due for revision in 2006. According to the Government
Performance and Results Act, strategic plans help agencies establish
long-term goals, including identifying the resources needed to
accomplish these goals. The act calls for federal agencies to develop
multiyear strategic plans and update them at least every 3 years.
CPSC's Strategic Plan does not reflect its import safety work, its
plans for international education and outreach activities, its plans to
use new authorities granted in CPSIA to prevent the entry of unsafe
products, or its plans to respond to mandates in CPSIA to improve its
risk assessment and coordination with CBP. CPSC has recently begun
efforts to update its Strategic Plan by requesting public comments on
revisions to the plan.[Footnote 78]
In addition to lacking a long-term plan to prevent the entry of unsafe
products, CPSC does not have outcome-oriented performance measures to
assess the effectiveness of its import safety work. One of CPSC's goals
for 2010 is to develop measures of import safety success, according to
CPSC's Import Safety Initiative. CPSC reports that, in 2008, staff
researched and evaluated information for an enhanced surveillance
system, making contact with FDA, CBP, and Internal Revenue Service
staff to discuss methods and requirements of their systems. As
discussed earlier in this report, CPSC has also requested public input
concerning the development of consumer product safety metrics, but it
received only two responses, neither of which addressed CPSC's need for
developing new performance measures.[Footnote 79]
CPSC has established short-terms plans and annual goals for its import
safety work, but it does not have goals for these activities beyond
2010. Without a long-term plan for import safety that contains key
goals and performance measures, CPSC may be unable to replicate or
enhance its short-term efforts over the longer term. For example, CPSC
may find insufficient staff to cover meetings and seminars needed to
work with foreign governments and foreign manufacturers over the long-
term to build product safety into manufacturing and distribution
processes from the start. CPSC may also find it difficult to analyze
any data it collects through surveillance of the marketplace to
strengthen and improve its targeting decisions at the ports. Finally,
CPSC may face challenges in ensuring that any further resources it
devotes to increasing its port staff and operations are also
accompanied by appropriate growth in its analytical and other support
staff to help ensure a comprehensive and balanced approach to product
safety.
Conclusions:
Broad agreement exists among CPSC staff, legal experts, industry
representatives, and consumer advocates that CPSC's authorities to
prevent the entry of unsafe products into the United States have the
potential to be effective, but only if they are implemented more fully.
With delays in some rulemakings, such as testing and certification
requirements, it remains unclear whether CPSC will be able to implement
its authorities effectively. Furthermore, CPSC faces significant
challenges due to competing priorities and resource constraints. CPSC
has taken positive steps to shift its approach to import product safety
from one focused on responding to problems after products have entered
the marketplace to an approach focused on preventing harmful products
from ever reaching consumers. To implement this preventive approach,
CPSC states that it is taking steps to enhance surveillance activities,
increase enforcement at the ports, engage foreign governments, and
educate foreign manufacturers on U.S. standards for consumer product
safety.
Our work demonstrates that CPSC needs to strengthen its surveillance
activities, particularly its ability to target potentially unsafe
products for further screening and review at U.S. ports. CPSC has yet
to obtain access to advance shipment data, which FDA's experience
suggests could be useful in targeting incoming shipments. In addition,
CPSC's agreements with CBP are outdated, which hinders CPSC and CBP's
ability to target imports under CPSC's jurisdiction. CPSIA requires
that CPSC and CBP work together to develop a methodology to assess the
risks of various imported products and to cooperate on CPSC's
participation in a CBP targeting center. These joint efforts are a key
element for improving CPSC's ability to target shipments for screening
and review at the ports and to ensuring consistent enforcement of
CPSC's authorities across the United States. Because CPSC relies
heavily on CBP for enforcement at the ports, it is imperative for CPSC
and CBP to resolve issues concerning their agreements for sharing
information and update their procedures for operating at the port.
CPSC's targeting efforts could be strengthened further through expanded
engagement with foreign governments and education of foreign
manufacturers on U.S. consumer product safety standards. Such outreach
could inform industry of its responsibility for the safety of consumer
products entering the United States and provide CPSC with information
on manufacturing in the respective countries to assist the agency's
development of a risk assessment methodology for imported products.
Without improving its ability to target potential risks across a broad
range of product categories, it is unclear how CPSC will succeed in
preventing unsafe consumer products from entering the United States.
CPSC's inspection of foreign manufacturing plants faces practical
constraints and would likely require tremendous resources to implement.
CPSC believes strong cooperative relationships between countries to
build strong frameworks for consumer product safety are a more
effective approach for the United States. As part of its approach, CPSC
is in the process of developing such relationships, and current MOUs
between CPSC and certain foreign countries primarily address
information sharing. CPSC officials state that expanding CPSC's
education and outreach rather than inspection of foreign plants could
serve to more effectively prevent the entry of unsafe consumer
products. Similarly, officials from the U.S. agencies, with the
exception of FDA, and countries we reviewed, stated that they do not
conduct inspections of foreign manufacturing plants. In most cases,
officials we interviewed stated that the countries have been more
successful in working with exporters in order to correct problems that
may arise. Therefore, we are not recommending any additional
authorities be granted to CPSC at this time.
Efforts to expand U.S. jurisdiction to foreign manufacturers for
purposes of enforcement action also present unique practical
considerations. It may be argued that if foreign manufacturers were
required to consent to U.S. jurisdiction, CPSC's enforcement ability
would be strengthened because CPSC would have one less hurdle to
overcome in pursuing enforcement actions. Nevertheless, CPSC staff
stated that, at this time, CPSC does not see the need for this
requirement in order to effectively carry out its enforcement duties.
To date, CPSC has been able to satisfy its enforcement objectives by
pursuing the domestic partners--broadly defined to include those
companies along the supply chain to the retailer--associated with the
foreign manufacturer. CPSC also has the ability to settle enforcement
actions with foreign parties. FDA and USDA officials have found that
their efforts to educate overseas industry and governments on U.S.
safety standards and the particular risks being screened for at the
border could reduce the number of unsafe products that reach U.S.
consumers. Similarly, CPSC staff we interviewed stated that expanded
international education and outreach, rather than expanded enforcement
jurisdiction, would more effectively prevent the entry of unsafe
products, although they acknowledged that consent to jurisdiction or a
requirement of a U.S. agent for service of process would be helpful.
Due to the practical considerations associated with requiring foreign
manufacturers to consent to U.S. jurisdiction for purposes of CPSC
enforcement actions, we make no recommendations for additional CPSC
authorities at this time.
CPSC's short-term plans to prevent the entry of unsafe products are
consistent with a governmentwide approach taken by the Interagency
Working Group on Import Safety in 2007. That group, of which CPSC was a
part, established three organizing principles--prevention,
intervention, and response--that represent, in our view, a
comprehensive approach to import safety. However, CPSC lacks a long-
term plan to prevent the entry of unsafe products. CPSC has not updated
its September 2003 Strategic Plan, even though the Government
Performance and Results Act requires this plan to be updated at least
every 3 years. Although CPSC has initiated steps to update its
Strategic Plan by requesting public comments, it is important for CPSC
to work expeditiously to follow through on its efforts. In addition,
while CPSC recognizes the need for outcome-oriented performance
measures and has taken steps to develop new measures, it does not
currently have such measures in place for its import safety work.
Without a long-term plan that contains key goals and measures, CPSC may
find it difficult to address its challenges in implementing the new
authorities granted in CPSIA to prevent the entry of unsafe products,
such as decisions about where and how to allocate any future increases
in agency resources.
Recommendations for Executive Action:
First, to ensure that CPSC is able to exercise its full authority to
prevent the entry of unsafe consumer products into the United States,
we recommend that CPSC ensure expeditious implementation of key
provisions of CPSIA, including establishing the substantial product
hazard list and implementing testing and certification requirements
that are subject to stay of enforcement until February 2010, and
complete its rulemaking as required under the act.
Second, to strengthen CPSC's ability to prevent the entry of unsafe
products into the United States, we recommend that the Chairman and
commissioners of CPSC take several actions to improve the agency's
ability to target shipments for further screening and review at U.S.
ports of entry as follows:
1. To ensure that it has appropriate data and procedures to prevent
entry of unsafe products into the United States, we recommend that CPSC
update agreements with CBP to clarify each agency's roles and to
resolve issues for obtaining access to advance shipment data; and:
2. To improve its targeting decisions and build its risk-analysis
capability, we recommend that CPSC:
a. work with CBP, as directed under CPSIA through the planned targeting
center for health and safety issues, to develop the capacity to analyze
advance shipment data; and:
b. link data CPSC gathers from surveillance activities and from
international education and outreach activities to further target
incoming shipments.
Third, to provide better long-term planning for its import safety work
and to account for new authorities granted in CPSIA, we recommend that
CPSC expeditiously update its agencywide Strategic Plan. In updating
its Strategic Plan, we recommend that CPSC consider the impact of its
enhanced surveillance of the marketplace and at U.S. ports as discussed
above and determine whether requisite analytical and laboratory staff
are in place to support any increased activity that may occur at U.S.
ports. Furthermore, we recommend that CPSC's Strategic Plan include a
comprehensive plan for the Office of International Programs and
Intergovernmental Affairs to work with foreign governments in bilateral
and multilateral environments to:
1. educate foreign manufacturers about U.S. product safety standards
and best practices, and:
2. coordinate on development of effective international frameworks for
consumer product safety.
Agency Comments and Our Evaluation:
We provided a draft of this report to CPSC, CBP, USTR, and the
Departments of Agriculture; Commerce; Health and Human Services; State;
and Transportation; and to EU and Canadian officials for review and
comment. CPSC, CBP, USTR, Agriculture, Health and Human Services,
Transportation, and EU and Canadian officials provided technical
comments, which we incorporated as appropriate. CPSC stated that it
concurs with our recommendations.
We are sending copies of this report to interested congressional
committees and the Chairman and commissioners of CPSC. We are also
sending copies to the Secretaries of Agriculture, Commerce, Homeland
Security, Health and Human Services, State, and Transportation, the
United States Trade Representative, and other interested parties. The
report also is available at no charge on the GAO Web site at
[hyperlink, http://www.gao.gov].
If you or your staff members have any questions about this report,
please contact me at (202) 512-8678 or cackleya@gao.gov. Contact points
for our Offices of Congressional Relations and Public Affairs may be
found on the last page of this report. GAO staff who made major
contributions to this report are listed in appendix V.
Signed by:
Alicia Puente Cackley:
Director, Financial Markets and Community Investment:
[End of section]
Appendix I: Objectives, Scope, and Methodology:
To determine the effectiveness of the Consumer Product Safety
Commission‘s (CPSC) import safety authorities, we examined CPSC data
and interviewed CPSC officials to learn how the agency measures and
assesses its own effectiveness. We also conducted extensive document
reviews on consumer product safety generally and import safety
specifically. We interviewed legal professionals and consumer and
industry representatives to obtain their perspective on the
effectiveness of CPSC‘s authorities. We also interviewed officials from
other federal agencies involved in imported product safety, including
U.S. Customs and Border Protection (CBP), the Office of the United
States Trade Representative (USTR), and the Departments of State and
Commerce. We visited a U.S. port of entry to observe CPSC import
surveillance activities and CPSC‘s interaction with staff from CBP. We
also visited CPSC‘s Product Testing Laboratory in Gaithersburg,
Maryland, to observe laboratory testing that supports import safety
activities.
To compare CPSC‘s authorities with respect to the safety of imported
products with the authorities of select federal agencies, we identified
key federal agencies with import regulatory authority over other types
of consumer goods. These agencies are the Food and Drug Administration
(FDA), which oversees the safety of imported food, drugs, cosmetics,
and medical devices; the United States Department of Agriculture‘s
(USDA) Food Safety and Inspection Service (FSIS), which oversees the
safety of imported egg products, meat and poultry; USDA‘s Animal Plant
Health Inspection Service (APHIS), which oversees the safety of
imported plants and animals; and the National Highway Traffic Safety
Administration (NHTSA), which oversees the safety of imported motor
vehicles and equipment. We interviewed officials from each of these
agencies, had them identify the primary statutory authorities for
ensuring the safety of imports under their jurisdiction, and discussed
various agency activities supporting import safety. For FDA, the
primary statutory authority is the Federal Food, Drug, and Cosmetic
Act. For USDA, the primary statutory authorities are the Federal Meat
Inspection Act, the Poultry Products Inspection Act, the Egg Products
Inspection Act, the Animal Health Protection Act, and the Plant
Protection Act. For NHTSA, the primary statutory authority is the
National Traffic and Motor Vehicle Safety Act, which has been
classified, as amended, at Subtitle VI of Title 49 of the U.S. Code.
For our comparative analysis of the product safety authorities of
foreign countries, we selected countries that are members of the
International Consumer Product Safety Caucus, which is an international
forum consisting of product safety officials from member governments to
facilitate the exchange of information on consumer product safety.
Specifically, we selected Australia, Canada, China, the European Union
(EU), and Japan.1 We developed a set of questions concerning consumer
product safety authorities, practices, and procedures and worked
through the U.S. Department of State to distribute the questions to
appropriate contacts at U.S. embassies overseas and, in some cases, to
foreign embassies in Washington, D.C. We interviewed desk officers for
the selected countries from the Departments of State and Commerce in
Washington, D.C., and relied on the Department of State to advise us on
the recommended approach to take with each country. We reviewed foreign
laws and regulations, as well as other documents regarding product
safety, provided by U.S. Embassy officials in the selected countries.
We did not independently analyze the laws, regulations, or procedures
of these countries; instead, we relied on third-party assessments of
each country‘s consumer product safety framework. We received written
responses to our questions from and conducted interviews with the U.S.
embassies in Australia, Canada, and China. U.S. embassy officials told
us that their responses were coordinated with country officials
knowledgeable of the respective country‘s laws, regulations, and
procedures. We received written responses to our questions from
officials with the Embassy of Japan in Washington, D.C. We received
written answers to our questions from consumer product safety officials
in the EU. We also received information from the supreme audit
institutions in these countries regarding their work on consumer
product safety. We conducted interviews with consumer product safety
officials from Canada, the EU, and Japan at a conference of the
International Consumer Product Health and Safety Organization (ICPHSO)
in Orlando, Florida. We reviewed publicly available documents on the
Web sites of consumer product safety agencies in each country. We also
reviewed and utilized documents provided by the Organization for
Economic Cooperation and Development (OECD), including OECD member
country responses to a 2008 questionnaire concerning consumer product
safety. Department of State officials reviewed a draft of our country
summaries and provided comments, which we incorporated.
To evaluate CPSC‘s plans to prevent the entry of unsafe products in the
future, we reviewed CPSC‘s 2010 Performance Budget Request and compared
CPSC‘s planning efforts to guidance GAO has developed for
implementation of the Government Performance and Results Act. We
examined other CPSC data and interviewed CPSC officials to learn about
CPSC‘s future plans. We also interviewed legal professionals and
consumer and industry representatives to obtain their perspectives on
CPSC‘s future plans.
We conducted this performance audit from September 2008 to August 2009,
in accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe that
the evidence obtained provides a reasonable basis for our findings and
conclusions based on our audit objectives.
[End of section]
Appendix II: Personal Jurisdiction Over Foreign Manufacturers for CPSC
Enforcement Purposes:
The Consumer Product Safety Improvement Act contained a mandate
requiring that GAO make a recommendation as to whether foreign
manufacturers should be required to consent to the jurisdiction of U.S.
courts with respect to enforcement actions by the commission. We raised
this issue in our interviews with officials at the Consumer Product
Safety Commission (CPSC), the United States Department of Agriculture,
the Food and Drug Administration, and the National Highway Traffic
Safety Administration, as well as officials representing most of the
international entities we selected for study”Australia, Canada, the
European Union, and Japan. CPSC staff stated that, at this time, CPSC
does not see the need for this requirement in order to effectively
carry out its enforcement duties.
CPSC has authority to institute administrative or civil enforcement
actions against manufacturers, distributors, importers, and retailers.
CPSC may opt to negotiate a settlement or consent agreement rather than
instituting an adjudicative proceeding in a federal or administrative
court. Enforcing product safety standards on foreign manufacturers
through an adjudicative proceeding could theoretically pose practical
challenges. For example, one important prerequisite to maintaining an
action against any defendant in a U.S. state, federal, or
administrative court is that the court must have the ability to exert
personal jurisdiction over that party.[Footnote 81] A court‘s exercise
of personal jurisdiction over a party must satisfy the fundamental
notions of fairness mandated by the Due Process Clause of the Fifth or
Fourteenth Amendments. In the case of a defendant physically located
outside the territorial jurisdiction, such as a foreign manufacturer,
personal jurisdiction can be established if sufficient contacts exist
between a defendant and the territorial jurisdiction where the court
sits, and the defendant receives fair notice of the suit. Both
requirements are fact-specific and must ultimately be decided by a
court, if challenged by the defendant. By requiring foreign
manufacturers to consent to U.S. jurisdiction for purposes of CPSC
enforcement actions, CPSC‘s enforcement process could possibly be
expedited in that it would eliminate a personal jurisdictional
challenge to the enforcement action.
However, as noted above, CSPC did not see a need to take such action at
this time.
CPSC noted that it can pursue each of the actors in the supply chain,
from the manufacturer to the retailer, foreign or domestic. Despite the
challenges that could theoretically arise in instituting an enforcement
action against a foreign actor, to date, pursuing the domestic partners
of such actors has satisfied CPSC‘s enforcement objectives.[Footnote
82] Further, CSPC has the ability to settle enforcement actions with
foreign parties. In the event a settlement cannot be reached
voluntarily, any formal action against a foreign corporation must be
served following the Convention on the Service Abroad of Judicial and
Extrajudicial Documents in Civil or Commercial Matters (’Convention“).
[Footnote 83] CPSC also has the authority to file suit against a
foreign manufacturer for civil penalties for violations of certain
provisions of its statutes, if it can effect service by the Convention
or otherwise, and establish that the court has jurisdiction. For
example, the Department of Justice on behalf of CPSC recently filed
suit against a foreign manufacturer in the U.S. District Court for the
District of Minnesota, which was settled in July 2009.[Footnote 84]
CPSC staff we interviewed believe that expanded international education
and outreach programs, as opposed to requiring foreign manufacturers to
consent to jurisdiction, are preferable tools to effectively prevent
the entry of unsafe consumer products, although they acknowledged that
consent to jurisdiction or a requirement of a U.S. agent for service of
process would be helpful. In addition, each of the U.S. federal
agencies and international entities that we interviewed stated that
they do not require consent by foreign manufacturers to local
jurisdiction with respect to enforcement actions. Therefore, we are not
recommending any action at this time.
[End of section]
Appendix III: Key Authorities of Select Federal Agencies:
We compared the Consumer Product Safety Commission‘s (CPSC) key
authorities for preventing the import of unsafe consumer products to
those of three federal agencies”the Food and Drug Administration (FDA),
the National Highway Traffic Safety Administration (NHTSA), and the
United States Department of Agriculture (USDA). Table 1 describes some
of the statutory and regulatory provisions of such agencies with
respect to various regulatory activities, such as inspecting shipments
that are presented for import into the United States.[Footnote 85] In
acknowledgement of the ongoing efforts of the Interagency Working Group
on Import Safety, in which these four agencies participate, we present
these authorities according to the same principles that are the
foundation of the group‘s strategic framework”prevention and
intervention.[Footnote 86] Although the group uses a third principle”
response”we generally did not evaluate agencies‘ authorities to respond
after an unsafe import enters U.S. commerce because the scope of our
work was limited to those authorities to prevent their entry.
Table 1: Key Authorities of Select Federal Agencies for Preventing the
Entry of Unsafe Imports:
Product:
Agency: CPSC: Consumer products;
Agency: FDA: Food (not including meat, poultry products, eggs, or egg
products), drugs, and medical devices[B];
Agency: NHTSA: Motor vehicles, motor vehicle equipment;
Agency: USDA[A]: Meat, poultry products, eggs, and egg products; live
plants and animals.
Primary statute:
Agency: CPSC: Consumer Product Safety Act, Pub. L. No. 92-573, 86 Stat.
1207 (Oct. 27, 1972) (classified, as amended, at 15 U.S.C. §§ 2051 et
seq.)[C] Federal Hazardous Substances Act, Pub. L. No. 86-613, 74 Stat.
372 (July 12, 1960) (classified, as amended, at 15 U.S.C. §§ 1261 et
seq.) Flammable Fabrics Act, ch. 164, 67 Stat. 111 (Jun. 30, 1953)
(classified, as amended, at 15 U.S.C. §§ 1191 et seq.)
Agency: FDA: Federal Food, Drug, and Cosmetic Act, ch. 675, 52 Stat.
1040 (Jun. 25, 1938) (classified, as amended, at 21 U.S.C. §§ 321 et
seq.);
Agency: NHTSA: National Traffic and Motor Vehicle Safety Act, codified
as amended, at Subtitle VI Title 49, of the U.S. Code (49 U.S.C. §§
30101 et seq.);
Agency: USDA[A]: Federal Meat Inspection Act, ch. 2907, 24 Stat. 1260
(Mar. 4, 1907) (classified, as amended, at 21 U.S.C. §§ 601 et seq.)
Poultry Products Inspection Act, Pub. L. No. 85-172, 71 Stat. 441 (Aug.
28, 1957) (classified, as amended, at 21 U.S.C. §§ 451 et seq.)
Egg Products Inspection Act, Pub. L. No. 91-597, 84 Stat. 1620 (Dec.
29, 1970) (classified, as amended, at 21 U.S.C. §§ 1031 et seq.)
Animal Health Protection Act, Pub. L. No. 107-171, Title X, Subtitle E,
116 Stat. 494 (May 13, 2002) (classified, as amended, at 7 U.S.C. §§
8301 et seq.) Plant Protection Act, Pub. L. No. 106-224, Title IV, 114
Stat. 438 (Jun. 20, 2000) (classified, as amended, at 7 U.S.C. §§ 7701
et seq.)
Prevention”Authorities to prevent the importation of unsafe products
into the United States:
Preapproval, certification, and/or testing of imports prior to entry
into the United States:
Agency: CPSC: All manufacturers are required to issue a certificate of
compliance with all applicable rules, bans, standards, or regulations.
Certifications must be based on a test of each product or a reasonable
testing program. With respect to certain children‘s products, such
certification must be based on testing conducted by a third party that
is accredited by CPSC.
Agency: FDA: Devices: Certain devices are subject to premarket approval
by FDA.
New drugs[D]: No new drug may be introduced into interstate commerce
unless and until FDA has approved its new drug application. An
application may be denied if the application does not include reports
of adequate testing by all methods reasonably applicable to show
whether or not the drug is safe for use.
Agency: NHTSA: Manufacturers are required to certify that vehicles and
equipment comply with applicable safety standards. Such certifications
may be, but are not required to be, based on testing, and the results
of any testing are not required to be reported to NHTSA as a condition
for entry.
Agency: USDA[A]: Eggs, egg products, poultry, and meat: Products must
be accompanied by a foreign inspection certificate that includes
certain information and representations of the appropriate government
official of the exporting country.e The inspection must be signed by
the authorized foreign government official and, in some cases, bear the
official seal of the foreign government agency responsible for
inspection of the products. (See also, ’Labeling“ below.)
Inspection of facilities located in foreign countries:
Agency: CPSC: CPSC is authorized to inspect any factory, warehouse, or
establishment in which consumer products are manufactured or held for
distribution in the United States. CPSC is required, by rule, to
condition the importation of any consumer product into the United
States on the manufacturer‘s compliance with the inspection
requirements of the Consumer Product Safety Act (CPSA).
Agency: FDA: FDA is authorized to conduct inspections of establishments
engaged in the manufacture of food, drugs, or devices offered for
commercial distribution in the United States. For drugs and medical
devices, at the request of FDA, the U.S. agent of the establishment is
required to assist in scheduling inspections. In practice, if the
foreign firm refuses to permit such an inspection, FDA can sometimes
refuse admission of products offered for import into the U.S. For
example, the refusal to permit an inspection could lead to a product
not receiving a required pre-market approval or the refusal to permit
an inspection, combined with other information, could support a
determination of the appearance of a violation.
Agency: NHTSA: No statutory provision expressly authorizes NHTSA to
inspect facilities located in foreign countries.
Agency: USDA[A]: Egg products, poultry, and meat: Only products from
establishments certified by eligible foreign countries are eligible for
importation into the United States. In order to be an eligible country,
the Food Safety and Inspection Service (FSIS) must determine that the
foreign country (1) maintains an inspection system equivalent to that
of the United States and (2) ensures compliance with such inspection
system. In determining eligibility of a particular country, FSIS will
conduct an initial review of the operation of the country‘s inspection
system, and conduct periodic reviews thereafter. The eligibility of
foreign establishments to continue to export products to the United
States is subject to periodic review, including observations of the
foreign establishments by FSIS.
Live plants and animals: APHIS may inspect plants and animals for
export at international ports or other points of origin.
Intervention”Authorities to intercept unsafe goods before they enter
U.S. commerce:
Product standards/product bans:
Agency: CPSC: CPSC may promulgate mandatory product safety standards,
as well as rules declaring a product a banned hazardous product.
Currently, there are 33 mandatory safety standards. CPSC may also
petition a U.S. District Court to declare a product an imminently
hazardous consumer product and grant such relief as may be appropriate
to protect the public, such as ordering a recall of the product or
ordering the notification of such risk to the purchasers of the product.
Agency: FDA: Food and devices: Applicable law sets forth the
definitions for adulterated and misbranded food, drugs, and devices,
including the standards for manufacturing practices.
Agency: NHTSA: NHTSA may prescribe motor vehicle safety standards.
Currently, there are 45 safety standards for vehicles and 15 safety
standards for equipment.
Agency: USDA[A]: Eggs, egg products, poultry, and meat: FSIS regulates
the sanitary operating practices of plants that slaughter or process
poultry and meat and sets forth sanitary operating practices of plants
that process egg products. Statutes set forth definitions of
adulterated and misbranded meat, poultry, and egg products.
Live plants and animals: Statute prohibits the import of plants or
animals that contain certain pests or diseases.
Labeling:
Agency: CPSC: CPSC may require permanent markings (e.g. labels) on
products, where practicable, that identify the date and place of
manufacture, as well as manufacturing cohort information, such as batch
number.
Agency: FDA: Food, drugs, and devices: Products are subject to labeling
requirements such as, depending on the product, its contents, and its
proper use.
Agency: NHTSA: Manufacturers affix to the motor vehicle or equipment,
or to the equipment container, a label, tag, or marking that represents
the required certification that the vehicle or equipment complies with
applicable safety standards.
Agency: USDA[A]: Eggs, egg products, poultry, and meat: The immediate
containers of eggs and egg products must bear a label printed in
English with certain information, including, for egg products, the
inspection mark of the country of origin. The immediate containers of
imported poultry and meat must bear labels that comply with the
labeling requirements applicable to domestic products, except that the
label will bear the name of the country of origin and the inspection
mark and establishment number assigned by the foreign inspection system
and certified to FSIS.
Registration of foreign manufacturers/facilities:
Agency: CPSC: There is no statutory requirement for the registration of
foreign manufacturers with CPSC.
Agency: FDA: Food: A foreign establishment that engages in the
manufacture, processing, packing or holding of food for export to the
United States without further processing or packaging outside of the
United States, must register with FDA and provide certain information,
including a list of all trade names and the name of its U.S. agent.
Drugs and devices: A foreign establishment engaged in the manufacture,
preparation, propagation, compounding, or processing of a drug or
device offered for import into the United States must register with the
FDA and provide a list of each drug offered for commercial distribution
and the name of its U.S. agent.
Agency: NHTSA: Motor vehicles not certified to all applicable safety
standards may only be imported by a person registered with NHTSA or by
a person who has contracted with a registered importer.
Agency: USDA[A]: There is no statutory requirement for registration of
foreign establishments with USDA.
Preshipment/prearrival notification:
Agency: CPSC: No statutory provision expressly requires foreign
manufacturers to provide preshipment notification to CPSC.
Agency: FDA: Food: Food shipments presented for import must be preceded
by prior notice to enable FDA to target food for inspection at ports of
entry. Notification must identify the article, manufacturer, shipper,
grower, country of origin, and anticipated port of entry.
Agency: NHTSA: No statutory provision expressly requires foreign
manufacturers to provide preshipment notification to NHTSA.
Agency: USDA[A]: Eggs, egg products, poultry, and meat: Except for
importers of Canadian meat products, importers must make an application
for inspection at the port of entry. The application should be made as
long as possible in advance of the anticipated arrival of the product
to the United States. Importers of Canadian meat products are subject
to streamlined inspection procedures.
Border surveillance:
Agency: CPSC: CPSC is required to maintain a permanent product
surveillance program to prevent the entry of unsafe consumer products
into the United States, among other things. CPSC may inspect consumer
products being offered for import. At CPSC‘s request, CBP will obtain a
reasonable number of samples of such product for the purpose of making
admissibility decisions.
Agency: FDA: All products: FDA may examine shipments and obtain samples
of food, drugs, and devices presented for import to determine whether
the product is subject to refusal of admission. Also, authority
provided to prioritize border food inspections, develop tests for the
rapid detection of adulterated food, improve border computer systems,
and improve links with other federal agencies responsible for food
safety.
Agency: NHTSA: No statutory provision mandates a border surveillance
program.
Agency: USDA[A]: Eggs, egg products, poultry, and meat: CBP notifies
FSIS when products from restricted countries are presented for import
into the United States.
Live plants: CBP is to notify APHIS of the arrival of any plant at a
port of entry and is to hold the item until it is inspected and
authorized for entry or is otherwise released by APHIS.
Live plants and animals: APHIS may stop and inspect, without a warrant,
any person or means of conveyance moving into the United States to
determine whether it is carrying any plant or regulated animal.
Also, authorities are provided to improve surveillance at ports of
entry and customs and to implement a centralized automated
recordkeeping system to better track the status of animal and plant
shipments, including those on hold at ports of entry and customs.
Refusal at ports of entry:
Agency: CPSC: CPSC may refuse admission of any consumer product offered
for import that:
* fails to comply with an applicable mandatory safety standard or ban;
* has been determined to be an imminently hazardous consumer product;
* has a defect which constitutes a substantial product hazard;
* is not properly certified or labeled; or;
* is manufactured by a manufacturer that has failed to comply with
applicable recordkeeping and inspection requirements.
Agency: FDA: All products: Subject to an opportunity to introduce
testimony, any food, drug, or device may be refused admission into the
United States if it appears from an examination or otherwise that the
product:
* is adulterated or misbranded;
* is an unapproved new drug;
* is forbidden or restricted in sale in the exporting country; or;
* has been manufactured or processed in unsanitary conditions or out of
conformance with good manufacturing practices.
Food: FDA may refuse a food shipment for which advance shipment
information has not been provided or is from an unregistered foreign
manufacturer.
Drugs and devices: FDA may refuse drugs or devices that are not
accompanied by a registration of foreign supplier.
Agency: NHTSA: Motor vehicles or motor vehicle equipment manufactured
after the date an applicable safety standard takes effect shall not be
imported unless they comply with the standard and are covered by an
appropriate certification of conformance.
Agency: USDA[A]: Eggs, egg products, poultry, and meat: Eggs, egg
products, poultry, and meat that are adulterated, misbranded, or do not
comply with standards applicable to equivalent products in U.S.
commerce shall not be imported.
Live plants or animals: APHIS may refuse admission to plants if
determined necessary to prevent the spread of plant pests or noxious
weeds in the United States. APHIS may refuse admission of any animal,
article, or means of conveyance to prevent the introduction or spread
of any pest or livestock disease in the United States.
Detention/seizure/holds pending completion of inspection or further
action by owner:
Agency: CPSC: CPSC may examine samples of products at ports of entry.
CPSC statutes describe prohibited acts, which form the basis for it to
instruct CBP to seize products under the Tariff Act authorities. CPSC
may also decide to detain the shipment pending further examination and
testing, conditionally release the shipment to the importer‘s premises
pending examination and testing, or release the shipment to the
importer outright.
Agency: FDA: All products: Food, drugs, and devices are subject to
inspection. The product remains in the custody of CBP, unless delivered
to the owner or consignee under bond.
Food: FDA may request that a food article that appears to present a
health threat be held for a period not to exceed 24 hours for the
purpose of inspecting, examining, or investigating it. Food shipments
that arrive without adequate prior notice or that are from unregistered
foreign manufacturers may be held until prior notice or registration is
completed.
Agency: NHTSA: No statutory provision; however, NHTSA regulations
provide that motor vehicles not in conformity with all applicable
safety standards at the time of import may be admitted under a bond to
ensure that the vehicle will either be brought into conformity within
120 days, returned to the custody of CBP for export, or abandoned to
the United States.
Agency: USDA[A]: Eggs, egg products, poultry, and meat: Generally,
eggs, egg products, poultry, and meat are subject to U.S. inspection at
the port of entry and may not be removed from the port of entry prior
to inspection. The product remains in the custody of CBP unless
delivered to the consignee under an approved bond. FSIS may detain egg
products, poultry, and meat for a period not to exceed 20 days.
Live animals: APHIS may require that any imported animal be raised or
handled under quarantine to determine whether it is affected by any
pest or disease.
Product destruction:
Agency: CPSC: Products refused admission into the United States must be
destroyed, unless CBP permits the product to be exported from the
customs territory of the United States. All expenses connected with
destruction must be paid by the owner or consignee. A failure to make
such payment shall constitute a lien against future imports.
Agency: FDA: CBP may destroy any food, drug, or device that is refused
admission, unless the article is exported within 90 days. All expenses
connected to the destruction of refused goods shall be paid by the
owner or consignee. A default shall constitute a lien against future
imports.
Agency: NHTSA: There is no statutory provision regarding the
destruction of nonconforming motor vehicles or equipment by NHTSA.
Agency: USDA[A]: Egg products, poultry, and meat: Egg products,
poultry, and meat that violate federal requirements are destroyed at
the expense of the owner or cosignee, unless they are exported or
brought into compliance (e.g., labeling). The costs of the destruction
are either paid directly by the owner or cosignee or reimbursed to the
government. The failure to make any such reimbursement shall constitute
a lien against future imports.
Live animals: APHIS may order the destruction or removal from the
United States of any animal to prevent entry or spread of any pest or
livestock disease. The Secretary of Agriculture may also order owners
to disinfect the means of conveyance, an individual, or article
involved in the importation of animals ordered to be destroyed or
removed. If owner fails to comply with destruction/removal orders, the
Secretary may recover from the owner the costs of any care/destruction.
Response”Authorities to act on harm, real or potential, after products
enter U.S. commerce:
Require foreign manufacturers to consent to local court jurisdiction:
Agency: CPSC: No statutory provision mandates that CPSC require foreign
manufacturers to consent to local court jurisdiction.
Agency: FDA: No statutory provision mandates that FDA require foreign
manufacturers to consent to local court jurisdiction.
Agency: NHTSA: No statutory provision mandates that NHTSA require
foreign manufacturers to consent to local court jurisdiction.
Agency: USDA[A]: No statutory provision mandates that USDA require
foreign manufacturers to consent to local court jurisdiction.
Source: GAO analysis of agency guidance.
[A] USDA‘s FSIS oversees meat, poultry products, eggs, and egg
products, and APHIS oversees live plants and animals.
[B] FDA oversees other products, including biologics, cosmetics, and
radiation-emitting electronic products, but our scope was limited to
food, drugs, and certain medical devices.
[C] As stated in this report, CPSC administers other product safety
statutes, but these are the three primarily affecting CPSC‘s ability to
prevent the entry of unsafe products.
[D] The term ’new drug“ does not mean simply a drug that is new on the
market; rather, it is any drug, regardless of how old, about which
insufficient data exists upon which qualified experts can reach a
consensus that the drug is safe and effective. See 21 U.S.C. § 321(p).
’In other words, a drug is not a new drug only if it …(1) is generally
recognized, among experts qualified to evaluate the safety and
effectiveness of drugs, as safe and effective for its labeled purposes;
and (2) has been used to a material extent for a material time.‘“ U.S.
v. Undetermined Quantities of Cal-Ban 3000, 776 F. Supp. 249, 256 (E.D.
N.C. 1991)(citation omitted)(emphasis added).
[E] For example, with respect to egg products, the foreign inspection
official must certify that the products were produced under the
approved regulations, requirements, and continuous government
inspection of the exporting country. Eggs must be accompanied by a
foreign inspection certificate that certifies that the eggs have at all
times after packing been refrigerated at the required temperature. With
respect to poultry, the foreign inspection official must certify that
the product received antemortem and postmortem inspections at the time
of slaughter and that such poultry products are sound, healthful,
wholesome, and otherwise fit for human food.
[End of table]
[End of section]
Appendix IV: Key Authorities of Selected International Entities:
Figure 3: Comparison of Selected International Entities‘ Authorities
with CPSC‘s Authorities to Prevent the Entry of Unsafe Consumer
Products:
[Refer to PDF for image: table]
We compared consumer product safety authorities, practices, and
procedures for Australia, Canada, China, the European Union (EU), Japan
and the United States. Figure 3 identifies the authorities and
activities we compared, as well as any future plans for changing the
organizations, structures, and/or mechanisms for consumer product
safety in the respective countries. Following the figure is a more
detailed discussion of the authorities, practices, and procedures. The
information in this appendix is based on information we received
through U.S. Embassies in these countries, foreign embassies in
Washington, D.C., and interviews with country officials. We reviewed
documents regarding product safety provided by U.S. Embassy officials
in the selected countries. We did not independently analyze the laws or
procedures of these countries; instead, we relied on third-party
assessments of each country‘s consumer product safety framework.
Key regulatory authorities:
Australia: Trade Practices Act 1974; various state and territory laws;
Canada: The Hazardous Products Act and its corresponding regulations;
Chemical Management Plan;
European Union: The General Product Safety Directive (GPSD)
(2001/95/EC) sets out the basic requirements on consumer product safety
for all EU member states;
Japan:
- Consumer Product Safety Law;
- Consumer Basic Act;
- Product Liability Act;
- Law for the Control of Household Products Containing Harmful
Substances;
- Food Sanitation Law;
United States: Consumer Product Safety Act; Federal Hazardous
Substances Act; Flammable Fabrics Act.
Organizational structure:
Australia: Australian Treasury and state/territory offices of fair
trading develop policy. Consumer law enforcement is shared between
national, state, and territory regulators. Australian Competition and
Consumer Commission (ACCC) and state/territory offices of fair trading
conduct enforcement and monitoring;
Canada: Health Canada is the key policy development and enforcement
agency. Provincial governments have jurisdiction over the adoption of
the National Building Code, which includes certification requirements
for electrical, gas, and plumbing products;
European Union: Directorate General for Health and Consumers (DG SANCO)
is the primary EU agency responsible for consumer product safety. EU
member states are responsible for implementation and enforcement of EU
legislation;
Japan: METI is responsible for consumer product safety policy. The
National Institute of Technology and Evaluation conducts inspections in
accordance with METI‘s instructions and analyzes the cause of
accidents. The Cabinet Office provides overall policy guidance;
United States: Consumer Product Safety Commission (CPSC) has national
responsibility for consumer product safety policy and enforcement.
Standards:
Australia: Currently there are few direct consumer safety regulations
on most imported goods; however, retailers can face legal action if the
goods are faulty. Only a small number of imported consumer products are
subject to mandatory standards;
Canada: Approximately two-thirds of standards in Canada are voluntary.
Some consumer product standards are mandatory legal requirements,
others are industry standards developed on a voluntary basis, and some
are purely market driven as a particular technology becomes the
industry standard;
European Union: Imported products must meet the same requirements as
domestic products. The EU product safety system is based on voluntary
standards. However, for mandatory European Commission standards,
products that are manufactured to harmonized standards developed by
recognized European standardization bodies benefit from a presumption
of conformity with the safety requirements. The safety requirements are
expressed in sectoral directives, conformity assessment measures, and,
in certain sectors, the availability of European standards. The GPSD
fills in the gaps when no sectoral directive exists;
Japan: Japanese Standards Association, Japanese Industrial Standards,
and the Consumer Affairs Council are responsible for the development of
standards. Most standards in Japan are voluntary. Product requirements
fall into two categories: technical regulations (or mandatory
standards) and nonmandatory voluntary standards;
United States: CPSC may promulgate mandatory product safety standards
and rules declaring a product a banned hazardous product. CPSC must
defer to a voluntary standard if CPSC determines that the voluntary
standard adequately addresses the hazard and that there is likely to be
substantial compliance with the voluntary standard. CPSC may ban a
consumer product if it determines no feasible standard would protect
the public from unreasonable risk of injury.
Product certification/labeling/testing:
Australia: No requirement for imported product certification. The
Productivity Commission has suggested that importers of consumer goods
certify that their goods meet applicable Australian mandatory safety
standards, but the government has not enacted this suggestion;
Canada: No requirement for product certification; however, new
legislation seeks to require the furnishing of entry documents and test
results at the border;
European Union: Member states are required to conduct sampling and
safety testing of domestically manufactured or imported products and to
follow-up on consumer complaints. Businesses must carry out conformity
and safety assessments of their products in accordance with the GPSD
and/or specific legislation applicable to their products. For some
products, self-declaration is sufficient but other products require
third-party verification;
Japan: Certain imported and domestic products are subject to product
testing and cannot be sold in Japan without certification to prescribed
standards. Compliance with regulations and standards is also governed
by a certification system in which inspection results determine whether
or not approval (certification) is granted;
United States: CPSC requires manufacturers to issue a certificate of
compliance with mandatory standards. Certifications must be based on a
test of each product or a reasonable testing program. Children‘s
products must be certified by a third party. CPSC may require labels to
be permanently marked or affixed to any product, where practicable.
Definition of unsafe product:
Australia: No definition for unsafe products; however, current law
allows the Minister for Consumer Affairs to ban or compulsorily recall
consumer products in cases where the products ’will or may cause
injury;“
Canada: Nothing specific at this time under the Hazardous Products Act.
A new act passed by the House of Commons and awaiting action by the
Canadian Senate, as of June 2009, will include a definition of ’danger
to human health or safety;“
European Union: GPSD defines a ’consumer product“ and what constitutes
a ’safe“ and ’unsafe“ product. A ’dangerous product“ means any product
that does not meet the definition of a ’safe“ product;
Japan: Article 1 of the Consumer Product Safety Law defines products as
unsafe if they cause threat to consumers‘ life or health;
United States: Section 15 of Consumer Product Safety Act defines a
substantial product hazard as a failure to comply with a mandatory
standard or a product defect that creates a substantial risk of injury.
Inspect foreign facilities:
Australia: The government does not have this authority on product
safety grounds. Such authority does exist in certain areas, such as
motor vehicles and aircraft, covered by domestic legislation governing
the import and licensing of such products;
Canada: The government does not have this authority. Instead, Canada
works with the exporter and has been successful in using this approach,
according to officials;
European Union: DG SANCO has no inspection authority. Member-state
authorities can review technical product files that all businesses are
required to maintain to certify general conformity with product
standards;
Japan: The government does not have this authority;
United States: CPSC is required, by rule, to condition the importation
of any consumer product into the United States on the manufacturer‘s
compliance with the inspection requirements of CPSA.
Border surveillance authorities for imported goods:
Australia: Australian Customs has responsibility for determining what
may enter Australia. Customs generally accepts ACCC recommendations to
ban imports of unsafe products;
Canada: The Canada Border Services Agency uses a risk-based approach to
border management to detect and intercept dangerous goods and to
facilitate the movement of low-risk goods. Health Canada does not have
full-time port presence and relies on Canada‘s Border Services Agency
for seizure and destruction of products;
European Union: The EU recently issued a new regulation to strengthen
customs controls. The EU Council Regulation provides the customs
authorities with the legal basis and equally applicable and comparable
procedures in all member states to suspend, for no more that 72 hours,
the release of products that they suspect of posing a serious risk to
health and safety;
Japan: Japan does not designate consumer products separately in their
border and customs authorities. As with CPSC and the EU, Japan imposes
its consumer product safety laws on importers, which means that
products must be in compliance in order to be imported to Japan.
United States: CPSC is to maintain a permanent surveillance program to
prevent the entry of unsafe consumer products into the United States.
CPSC may request a reasonable number of samples from Customs and Border
Protection (CBP) to examine products for the purpose of making
admissibility decisions.
Require consent to local jurisdiction:
Australia: Under the current law, Australia could ask foreign
jurisdictions to enforce Australian consumer product safety laws. In
practice, the Government of Australia prefers other methods, such as
approaching manufacturers directly to raise concerns;
Canada: The government does not have this authority;
European Union: DG SANCO has no jurisdictional authority outside the
common market. Within the common market, the regulations apply to the
importer, distributor, manufacturer, and retailer. Imported products
must meet the same requirements as domestic products;
Japan: The government does not have this authority;
United States: No statutory provision mandates that CPSC require
foreign manufacturers to consent to local court jurisdiction.
Future plans:
Australia: Under a decision reached by the Council of Australian
Governments in 2008, Australia‘s states and territories are expected to
adopt the new Trade Practices Act in its entirety in 2010, providing a
harmonized product safety regime with greater federal government
control;
Canada: On June 12, 2009, Canada‘s new Consumer Product Safety Act was
passed by the House of Commons and, as of the end of June, is awaiting
action by the Canadian Senate. The new act will provide better
oversight of consumer products by improving the government‘s ability to
take timely compliance and enforcement actions when unsafe products are
identified. It will also encourage compliance through higher fines and
increased penalties for violators;
European Union: Recent EU initiatives aim to improve market
surveillance and consistency of enforcement across the member states;
Japan: On May 29, 2009, the Japanese Diet approved bills establishing
the Consumer Affairs Agency. The agency will be responsible for
consumer protection issues as part of a more centralized approach.
Approximately 200 staff will move to the new agency from the Cabinet
Office; the Fair Trade Commission; the Ministry of Economy, Trade and
Industry; the Ministry of Agriculture, Forestry and Fisheries; and the
Ministry of Health, Labor and Welfare;
United States: Implementation of the Consumer Product Safety
Improvement Act of 2008 is ongoing.
Sources: Official documents from foreign governments and from their
official Web sites, from U.S. embassies overseas, and foreign embassies
in Washington, D.C.
[End of figure]
Australia:
Environment for Consumer Product Safety in Australia:
Currently, the dominant issue concerning consumer product safety in
Australia is the reorganization of its policy framework. On October 2,
2008, the Council of Australian Governments agreed to a new policy
framework for implementation in 2010, comprising a single national
consumer law and streamlined enforcement arrangements. This more
centralized approach to consumer product safety replaces the current
system in which the federal, state, and territory governments all share
responsibility for consumer policy and enforcement.
* Key organizations: Currently, responsibility for product safety
regulation in Australia is shared between the federal, state, and
territory governments. The Australian Treasury is the agency
responsible for developing consumer policy, and the Australian
Competition and Consumer Commission monitors and enforces compliance
with product safety laws. In addition, state and territory governments
each have their own fair trading agencies that enact and enforce state-
based consumer product safety legislation. Such legislation is similar,
but not identical, to federal government legislation, which sometimes
leads to legislative inconsistencies between jurisdictions.
* Resources: Australia has 30 policy staff working in the Product
Safety section of the Australian Competition and Consumer Commission
and enforcement staff numbering around 150 around Australia. There is
no separate international office for consumer product safety. The total
combined resources allocated by the Australian Commonwealth (federal),
state and territory governments to enforcement in this area of consumer
product safety are estimated to be about A$5 million annually.
* Consumer advocacy: Consumer advocacy groups have emerged in Australia
over the last 40 years in response to growing interest in product
safety issues. Groups such as the Australian Consumers Association
supply information on safety issues to consumers and lobby federal,
state and territory governments to address the most serious product-
related hazards.
Regulatory Framework/System:
* Laws and regulations: Currently, Australia‘s general consumer product
safety system is based on the product safety provisions contained in
the Trade Practices Act 1974 and on equivalent provisions in Fair Trade
Acts in Australia‘s eight states and territories. The administration
and enforcement of these provisions, along with other nonregulatory
activities conducted by the federal, state, and territory governments,
are also part of the system.
The Trade Practices Act 1974 contains general product safety
provisions, as well as a product liability regime that enables
consumers to seek a range of remedies, including damages for loss or
damage caused by a defective product. The act provides the Australian
government minister responsible for consumer affairs the power to
intervene in markets to ensure product safety, including such
activities as:
* prescribing consumer product safety and consumer product information
standards;
* declaring products unsafe and banning them;
* investigating products to determine whether they will or may cause
injury and/or issuing a warning notice of the risk of using the
product;
* ordering the compulsory recall of products; and;
* obtaining information, documents, and other evidence related to the
administration of the safety provisions of the Trade Practices Act.
While in law the general regime applies to all consumer products, in
effect this system provides the general legal safety net for products
not otherwise protected by specific legislation that addresses more
hazardous products.
* Definition of safe products: Australia currently has no definition of
safe or unsafe products. However, current law allows the Minister for
Consumer Affairs to ban or compulsorily recall consumer products in
cases where the products will or may cause injury.
* Standards: The Trade Practices Act provides the Australian government
minister responsible for consumer affairs with the power to establish
mandatory standards for a product where it can be demonstrated that it
has the potential to cause injury. Standards Australia, an independent,
nongovernmental organization, is the sole recognized body for standards
development. Only a small number of imported consumer products are
subject to mandatory standards, and over half of the standards apply to
products that may pose a danger to children. State and territory
legislation also allows for the issuance of mandatory standards. At
times, the Australia Competition and Consumer Commission, the Treasury,
and the state and territory fair trading representatives have
participated in Standards Australia processes.
* Detection, reporting, and removal of unsafe products: The current
regulatory system relies on governments (federal, state, and territory)
to identify and regulate specific product hazards. According to
Australia‘s Ministerial Council on Consumer Affairs, the ability of
these governments to address potential safety hazards across a great
range of products is affected by limitations on their resources and by
the time and effort required to implement, enforce, and review product-
specific regulations. Currently, the vast majority of product recalls
are undertaken voluntarily by businesses that have become aware of a
safety problem concerning one of their products. The Trade Practices
Act and many of the state and territory Fair Trading Acts contain
provisions that allow governments to order compulsory product recalls
when necessary.
* Business responsibility: Businesses promote product safety through
industry sector associations, which often undertake such self-
regulatory activities as business education, the development of
industry codes of conduct, and engagement with law enforcement and
standards development bodies on enforcement and policy issues.
Currently there is no formal requirement for suppliers to monitor the
safety of the products they sell, once those products are released to
the marketplace. Under the current regulatory system, businesses are
required to report voluntary recalls to the Australian government
minister responsible for consumer affairs and to the Office of Fair
Trading in some other jurisdictions. The Ministerial Council on
Consumer Affairs has proposed that suppliers be required to monitor the
ongoing safety of the products they sell and report to the government
any products that are under investigation for possible safety risks,
have been associated with serious injury and death, or have been the
subject of a successful product liability claim.
* Policy enforcement and compliance: The Australian Competition and
Consumer Commission is responsible for enforcing the Trade Practices
Act‘s product safety regime. To ensure that suppliers subject to
mandatory standards and bans are responding appropriately, the
commission may compel the provision of information, require evidence
under oath, undertake random market surveys, enter premises, and seize
documents. In situations where suppliers have failed to comply with
mandatory standards or bans, the commission can seek orders in the
Federal Court requiring such suppliers to recall the noncomplying
products. Additionally, the commission may institute civil proceedings
or criminal proceedings under the Trade Practices Act. State and
territory governments have enforcement powers similar to those of the
Competition and Consumer Commission under their own legislation. The
relevant state and territory Fair Trading Acts contain criminal
liability provisions similar to those in the Trade Practices Act.
Future Plans:
On October 2, 2008, the Council of Australian Governments agreed to a
new consumer policy framework as proposed by the Ministerial Council on
Consumer Affairs. According to the Australian government, the new
framework consists of a single national consumer law and streamlined
enforcement arrangements. Australia‘s states and territories are
expected to adopt the new Trade Practices Act in its entirety in 2010,
providing a harmonized product safety regime with greater federal
government control. The council recognized that while Australia‘s
current consumer policy framework has strengths, it is in need of
significant improvements to overcome existing inconsistencies, gaps,
and duplication in Australia‘s consumer legislation and its
enforcement. The reforms have the following three key elements:
* the development of a consumer law (called the Australian Consumer
Law) to be applied both nationally and in each state and territory,
which is based on the existing consumer protection provisions of the
Trade Practices Act 1974, and which includes a new national provision
regulating unfair contract terms, new enforcement powers and, where
agreed, changes based on best practices in state and territory laws;
* the implementation of a new national product safety regulatory and
enforcement framework, as part of the national consumer law; and;
* the development of enhanced enforcement cooperation and information-
sharing mechanisms between national and state and regulatory agencies.
Canada:
Environment for Consumer Product Safety in Canada:
Changing consumer demands, new technologies, and the increasing
complexity of global supply chains are the major influences behind
Canada‘s current efforts to modernize its regulatory tools for consumer
product safety. According to the Canadian government, the authorities
governing food, health, and consumer products in Canada derive from
legislation developed in the 1950s and 1960s and, as a result, they are
out of step with modern realities and needs. For example, the Canadian
government lacks sufficient authority to issue a mandatory recall of a
health or consumer product if it poses a serious or imminent risk to
health and safety or to compel manufacturers to take steps to reduce
the risk associated with a product. In addition, according to the
Canadian government, fines and penalties are low compared with those of
other countries. New legislation will update and strengthen Canada‘s
consumer product safety framework.
* Key organizations: Currently, Health Canada regulates the import,
sale, and advertisement of hazardous products or substances. Health
Canada:
- supports the development of safety standards and guidelines;
- enforces legislation by conducting investigations, inspections,
seizures, and prosecutions;
- tests and conducts research on consumer products;
- provides importers, manufacturers, and distributors with hazard and
technical information;
- publishes product advisories, warnings, and recalls; and
- promotes safety and the responsible use of products.
The Canada Border Services Agency is responsible for stopping goods at
the border. The agency has a service agreement with Health Canada under
which it seeks to prevent prohibited products from entering Canada and
facilitates additional targeted inspections of these products, as well
as shipments of products from companies with histories of poor
compliance. In addition, the agency‘s Single Window Initiative will
give the department access to import and export data that will help to
efficiently approve shipments of low-risk products from low-risk
suppliers or, alternatively, tag suspicious ones before they have left
their point of export.
Other organizations include the Standards Council of Canada, the
Canadian Standards Association, the Canadian General Standards Board,
and the Underwriters‘ Laboratories of Canada. Also, Canada‘s Provincial
governments have jurisdiction over the adoption of the National
Building Code, which includes certification requirements for
electrical, gas, and plumbing products.
* Resources: Canada‘s consumer product safety agency, within Health
Canada, consists of 130 employees who serve as laboratory, compliance,
and policy development staff.
* Consumer advocacy: Consumer advocacy groups in Canada are
particularly concerned with consumer safety issues related to children‘
s products and food products. Some advocacy groups in Canada include
the Canada Toy Testing Council, the Consumers‘ Association of Canada,
Consumers Council of Canada, and the Public Interest Advocacy Centre.
Regulatory Framework/System:
* Laws and regulations: The Canadian government‘s key legislation
governing consumer product safety is the Hazardous Products Act. Part 1
of the act lists consumer products that are either restricted through
regulation or outright prohibited from being advertised, sold, or
imported into Canada. There are approximately 30 products and product
categories that are regulated, and some 25 others that are prohibited.
All imported products are subject to the D Memoranda, which
incorporates legislation, regulations, policies, and procedures used by
the Canada Border Services Agency. Canada‘s Chemical Management Plan
also has an impact on consumer product safety.
* Definition of safe product: Canada has no specific definition under
the Hazardous Products Act. However, a new act, currently awaiting
Canadian Senate approval as of June 2009, will include a definition of ’
danger to human health or safety,“ which will support a general
prohibition.
* Standards: Some consumer product standards are mandatory legal
requirements, others are industry standards developed on a voluntary
basis, and some are purely market driven as a particular technology
becomes the industry standard. Approximately two-thirds of standards in
Canada are voluntary. Federal and provincial legislation may impose
mandatory standards for products, typically where health or safety
issues are regarded as requiring regulation. Standards can also be
written into the legislation itself; such is the case with certain
specifications in toy regulations under the Hazardous Products Act. The
Standards Council of Canada is the national coordinating body for the
development of voluntary standards through the National Standards
System.
* Detection, reporting, and removal of unsafe products: The current
Canadian product safety regulatory system follows a reactive approach.
When a product has been deemed to pose a risk to users”usually over a
period of time, with reported injuries and/or deaths associated with
the product‘s use”a risk assessment is carried out. The regulatory
process involves many steps, including consultation with public,
industry, and technical experts. The end result is either that the
product remains available for sale in the Canadian marketplace or that
Health Canada imposes a legal ban on the product under the Hazardous
Product Act.
* Business responsibility: Currently, there is no mandatory reporting
for businesses, and Health Canada relies largely on negotiating with
suppliers to voluntarily recall or take other corrective measures to
address a product that poses an unreasonable danger to the health or
safety of consumers. The new Consumer Product Safety Act (discussed
below) will give inspectors the ability to order a suppler to take
corrective measures.
* Policy enforcement and compliance: Canadian authorities have the
ability to seize products, prosecute violations through a criminal
code, and impose civil money penalties. The maximum amount of a civil
money penalty is $1 million per violation, although penalties of
$25,000 are most common.
Future Plans:
On June 12, 2009, Canada‘s new Consumer Product Safety Act was passed
by the House of Commons and, as of the end of June 2009, is awaiting
final action by the Canadian Senate. The Consumer Product Safety Act
would replace Part I of the Hazardous Products Act and includes a new
regulatory regime. The act focuses on three key areas:
* Working to address problems before they happen: The legislation
introduces a general prohibition against the manufacture, importation,
advertisement or sale of consumer products that pose an unreasonable
danger to human health or safety. It strengthens compliance promotion
and enforcement activities through increased fines up to $5 million for
some offenses and fines that are left to the discretion of the courts
where the offense is committed knowingly or recklessly.
* Targeting the highest risk: The act provides the authority to require
suppliers to conduct safety tests upon a minister‘s orders and to
provide the results where there are indications of a problem. The
legislation will also require suppliers to notify Health Canada of
serious incidents or defects and to provide detailed reports about the
incidents.
* Rapid response: The act allows the Canadian government to take more
immediate responsive action to protect the public when a problem
occurs. It would authorize inspectors to order mandatory recalls and
other corrective measures to address unsafe consumer products and would
require suppliers to maintain accurate records to enable quick product
tracking. In addition, to further improve the government‘s ability to
respond effectively, Health Canada would double the number of product
safety inspectors.
European Union:
Environment for Consumer Product Safety in the EU:
In 2007, in response to massive recalls of consumer products worldwide,
the European Commission (EC) conducted an internal review of the
European Union (EU) product safety framework.[Footnote 87] The review
concluded that the community regulatory system (discussed below),
including the General Product Safety Directive, was capable of
providing to European citizens a high level of protection against
unsafe consumer products, as long as the rules of the system were
properly applied. The review identified areas for improvement and ways
of perfecting their system. The review stated that the adoption of the ’
Commission Decision“ on magnets in toys;[Footnote 88] the revision of
the ’European Directive“ on the safety of toys;[Footnote 89] and the
issuance of rules called the ’New Legislative Framework“ for marketing
of goods; would also raise the existing level of protection.[Footnote
90] It also identified some areas for further attention.[Footnote 91]
These findings were subsequently referred to in an official EU report
on the implementation of the relevant legislation.[Footnote 92]
* Key organizations: The EC Directorates General for Health and
Consumers (consumer product safety), Enterprise and Industry (safety of
regulated products) and Taxation and Customs Union (import safety) put
forth legislation aimed at further ensuring the safety of products. The
Directorate General for Health and Consumers, referred to as DG SANCO,
is an EU branch that is somewhat equivalent to CPSC in driving consumer
product safety matters both within Europe and internationally. However,
EU member states (currently 27 individual countries) are responsible
for implementation and enforcement of EU legislation. Each member state
has established its unique structures for handling product safety given
their cultural history and industrial background. The European
Commission coordinates their approaches and ensures their cooperation.
* Resources: Because of the very different role of the EC as compared
to CPSC in product safety enforcement, EU officials had difficulties
providing us with useful figures on resources and stated they risked
being seriously misleading if the member states‘ role was not taken
into consideration. They did not have conclusive data for the member
states. Different commission departments also perform part of their
functions related to consumer product safety, such as reviewing
European legislation in certain sectors relevant for consumer safety,
which would make sense to include in their ’central function“
resources. While the ’Product and Service Safety“ unit in DG SANCO is
generally comparable to CPSC in terms of policy function, it does not
include actual implementation and enforcement at the level of the
individual member states. Many staff from the Product and Service
Safety unit play a role in the ’international“ (versus ’European“)
area, but also have other responsibilities. DG SANCO determines who
represents the EU at the international level by the subject-matter
expertise for product safety.
Regulatory Framework in the EU:
* Laws and regulations: The General Product Safety Directive sets out
the basic consumer product safety requirements and defines a ’consumer
product,“ and Article 2(b) and (c) of the directive defines ’safe“ and ’
unsafe“ product. A ’dangerous product“ is any product that does not
meet the definition of a ’safe“ product.
* Definition of safe product: The directive defines a ’safe product“ as
any product which”under normal or reasonably foreseeable conditions of
use including duration and, where applicable, putting into service,
installation and maintenance requirements”does not present any risk or
only the minimum risks compatible with the product‘s use. Such a
product is considered to be acceptable and consistent with a high level
of protection for the safety and health of persons taking into account
the following points in particular:
- the characteristics of the product, including its composition,
packaging, instructions for assembly and, where applicable,
instructions for installation and maintenance;
- the effect on other products, where it is reasonably foreseeable that
it will be used with other products;
- the presentation of the product, the labeling, any warnings and
instructions for its use and disposal, and any other indication or
information regarding the product; and;
- the categories of consumers at risk when using the product, in
particular children and the elderly.
In addition, the feasibility of obtaining higher levels of safety or
the availability of other products presenting a lesser degree of risk
shall not constitute grounds for considering a product to be
’dangerous.“
In response to inconsistencies and identified weaknesses in the EU
legislative framework for product safety, the EU issued additional
regulations on marketing of products within the member states. Adopted
in July 2008, this new framework aims to strengthen accreditation and
market surveillance across member states and to remedy existing
weaknesses of the legislative framework. It will apply from 2010.
Guidance will be issued on its relation with the General Product Safety
Directive.
* Standards: The EU product safety system is based on voluntary
standards. However, products that are manufactured to harmonized
standards developed by recognized European standardization bodies (CEN,
CENELEC, and ETSI) on the basis of a mandate (formal request) by the EC
and ultimately referenced on the ’Official Journal“ of the EU benefit
from a presumption of conformity with the safety requirements of the
relevant legislative framework that are covered by those standards.
[Footnote 93] The EU considers their safety requirements to be the
backbone of its system. The safety requirements are expressed in
sectoral (industry or product-specific) directives, conformity
assessment measures and, in certain sectors, the availability of
European standards. The General Product Safety Directive fills in the
gaps when no sectoral Directive exists. For example, the EU has
specific sectoral directives on toys, and some industrial products,
such as electrical products, machinery, and pressure equipment.
Businesses must carry out conformity and safety assessments of their
products in accordance with the General Product Safety Directive and/or
specific legislation applicable to their products. Businesses are
required to certify that their products are safe, as defined under the
directive. For some products self-declaration is sufficient, but other
products require third-party verification.
* Detection, reporting and the removal of unsafe products: The EU and
its member states have the authorities to require mandatory recalls,
and companies can negotiate voluntary recalls as necessary, similar to
U.S. recalls. Under the General Product Safety Directive and applicable
product-specific legislation, national authorities can ban the
marketing of a dangerous product, order or organize its actual and
immediate withdrawal, alert consumers to the risks it presents, order
or coordinate its recall from consumers, and order or organize its
destruction in suitable conditions. Businesses are required to report
to the authorities if they detect that they have a dangerous product.
Businesses also must remove unsafe products from markets and are under
legal obligation to stop, withdraw, and/or recall their distribution.
Businesses are required to repair or replace products and/or refund
consumers the cost under certain criteria.
* Policy enforcement and compliance: DG SANCO has no inspection and no
jurisdictional authority. Member-state authorities can review technical
product files that all businesses are required to maintain to certify
general conformity with product standards. Within the common market,
the regulations apply to the importer, distributor, manufacturer, and
retailer. Imported products must meet the same requirements as domestic
products. Member states must have authorities to carry out appropriate
sampling and safety testing of domestically manufactured or imported
products and to follow-up on consumer complaints.
According to the EC report on its consumer product safety framework,
the EU considers its customs controls to be reactive”no proactive
obligation exists for the customs authorities to carry out controls for
unsafe products at the EU borders on their own initiative. In response,
the EU issued a ’Council Regulation“ to provide customs authorities
with the legal basis and equally applicable and comparable procedures
in all member states to suspend, for no more than 72 hours, the release
of products which they suspect pose a serious risk to health and
safety.
* Consumer advocacy: A unique feature of the EU approach to consumer
product safety is the funding support they provide to consumer
representation groups through grants. As part of this approach, the
consumer groups help define priority/future issues that require
additional research and contribute to standard-making, and consumer
groups can apply for grants to survey and educate consumers on these
emerging issues.
Japan:
Environment for Consumer Product Safety in Japan:
Japan‘s Consumer Product Safety Law regulates the manufacture and sale
of specific products to prevent harm and injury to consumers, to secure
the safety of consumer products, and to promote voluntary activities of
private business for the benefit of general consumers. Japan‘s consumer
product safety policies and procedures have been developed,
implemented, and enforced by a wide variety of government agencies and
organizations. As with some of the other countries we reviewed, Japan
recently reorganized its approach and mechanisms for consumer product
safety and food safety with the creation of the new Consumer Affairs
Agency, as follows:
* Key organizations: The Ministry of Economy, Trade, and Industry
(METI) is the key government organization responsible for developing
consumer product safety policy in Japan. The National Institute of
Technology and Evaluation conducts on-the-spot inspections of
enterprises in accordance with METI‘s instructions and analyzes the
cause of accidents based on accident information to prevent future
problems. The Consumer Policy Council, the Quality-of-Life Policy
Council, and the National Consumer Affairs Center of Japan also have
roles in advising and supporting the government on consumer-related
issues in Japan. The Japan Cabinet Office carries out general
coordination of basic consumer policies among related ministries and
agencies.
* Resources: According to Japanese officials, 33 staff members are
devoted to consumer product safety, as part of the Product Safety
Division of METI. However, other staff located in other agencies, as
indicated above, also work on these issues.
* Consumer advocacy: According to U.S. Embassy officials in Tokyo,
consumer product safety issues receive considerable attention in the
local press and the Japanese government, and consumers view consumer
product safety as a major priority. A survey conducted by the cabinet
office in 2005 found over 2,800 consumer groups active in Japan. Seven
nonprofit consumer groups have been officially accredited by the
Japanese government. They are:
- Consumer Organization of Japan,
- Kansai Consumers Support Organization,
- Japan Association of Consumer Affairs Specialists,
- Kyoto Consumer Contract Network,
- Consumer.net Hiroshima,
- Hyogo Consumers Net, and,
- Saitama Organization to Abolish Damage to Consumers.
Regulatory Framework/System:
* Laws and regulations: Domestic and imported consumer products are
regulated by the following laws in Japan:
- the Consumer Product Safety Law,
- the Household Goods Quality Labeling Law,
- the Law for the Control of Household Goods Containing Harmful
Substances,
- the Chemical Substances Control Law, and,
- the Electrical Appliance and Material Safety Law.
Other laws relating to consumer protection include:
- the Product Liability Act,
- the Consumer Contract Act,
- the Consumer Basic Act, and,
- the Whistleblower Protection Act.
Under Japan‘s Consumer Product Safety Law, METI collects and makes
public information on serious accidents involving consumer (household)
products. The law requires manufacturers, marketers, and/or importers
to report actual serious accidents to METI, which in turn informs the
public. Manufacturers, marketers, and/or importers are also required to
inform the public of the product safety issues involved. Major national
consumer centers compile complaints from consumers, including product
safety complaints. Depending on the product type, relevant ministries
maintain regulations covering consumer products, including ensuring
that products meet appropriate standards and labeling and certification
requirements. Some ministries may require foreign manufacturers to
register foreign manufacturing sites with the local government.
* Definition of safe product: Article 1 of the Consumer Product Safety
Law defines products as unsafe if they cause threat to consumers‘ life
or health. In addition, Article 2, Section 2, of the Product Liability
Act provides that a defective product is to be considered as unsafe,
taking into account the nature of the product, the ordinarily
foreseeable use of the product, the time when the manufacturer
delivered the product, and other circumstances.
* Standards: Product requirements in Japan fall into two categories:
technical regulations (or mandatory standards) and nonmandatory
voluntary standards. Compliance with regulations and standards is also
governed by a certification system in which inspection results
determine whether or not approval (certification/quality mark) is
granted. To affix a mandatory quality mark or a voluntary quality mark
requires prior product type approval and possibly factory inspections
for quality control assessment. Certain regulated products must bear
the appropriate mandatory mark when shipped to Japan in order to clear
Japanese Customs. Safety standards are specific to types of products
and fall under the jurisdiction of the relevant ministry.
* Policy enforcement and compliance: Generally, the importer of record
is responsible for ensuring the quality and safety of imported consumer
products in Japan. If a product is deemed harmful or defective, the
importer is responsible for working with local authorities and consumer
outlets to take necessary measures. The government may take action
against the importer, such as conducting on-site inspection of business
offices, plants, stores, and/or warehouses; ordering mandatory product
recalls; suspending business operations for a certain period of time;
or imposing penalties including fines and/or imprisonment.
Future Plans:
On May 29, 2009, the Japanese Diet approved bills establishing the
Consumer Affairs Agency, which will administer consumer protection
issues in Japan. The agency will begin operating in the fall with about
200 staff from the Cabinet Office; the Fair Trade Commission; the
Ministry of Economy, Trade and Industry; the Ministry of Agriculture,
Forestry and Fisheries; and the Ministry of Health, Labor and Welfare.
In addition, 60 temporary staff will be appointed from attorneys,
consumer affairs consultants, and academics. The Consumer Affairs
Agency will be placed under the Cabinet Office, and Consumer Affairs
Centers nationwide will be established to provide information about
product-related accidents and complaints. In addition, the Consumer
Affairs Committee will be established at the same time to monitor the
Consumer Affairs Agency. The committee”an independent body” will have
authority to request information and reports from ministries and make
recommendations for crisis management, through the Prime Minister, in
the event of consumer incidents.
China:
Environment for Consumer Product Safety in China:
China imports relatively few manufactured products compared with its
exports. Consumer products that are imported tend to come from more
developed and more regulated markets in Europe, Japan, and the United
States. Therefore, China faces proportionally fewer challenges with
regard to import products. Further, the costs of testing products and
certifying them for sale, as well as the costs of shipping and tariffs,
make it difficult for imported products to compete with Chinese
domestic products in similar product categories.
Recent high-profile cases in China involving food and product safety
have affected China‘s export reputation. These cases appear to have
prompted the government to raise the priority of food and product
safety.
* Laws and regulations: China‘s fundamental law on product safety is
The Law of the People‘s Republic of China on Product Quality, which was
written in 1993 and revised in 2000. This law preceded the
establishment of China‘s leading quality and safety agency, the General
Administration for Quality Supervision, Inspection, and Quarantine
(AQSIQ). The law sets a very low standard for corporate liability by
defining the amount of damages and fines that can be collected through
lawsuits. It also applies some penalties to entities that can claim
ignorance of the law. The law makes no reference to foreign
manufactures or domestic goods.
China‘s main regulatory code pertaining to imported consumer goods is
found in AQSIQ‘s Regulations for Compulsory Product Certification.
Issued in 2001, this regulation created a uniform standard for imported
and domestically manufactured goods, as well as a certification mark
known as China Compulsory Certification (CCC) or 3C. The regulation
applies to a catalogue of products that must be approved by AQSIQ prior
to general sale in China. The standards for individual products are
defined separately by national and industry standards. CCC testing is
conducted mostly by enterprises owned in whole or in part by AQSIQ;
foreign testing companies have not been approved to conduct CCC tests,
but neither have they been explicitly excluded.
The Law of the People‘s Republic of China on Import and Export
Commodity Inspection is the main law pertaining to import and export
inspections. The law dates to 1989 and provides for fee-based
inspections at port, as well as preshipment inspections that may be
conducted in a foreign country. The law empowers the provincial-level
organizations of AQSIQ”known as Customs, Inspection and Quarantine
(CIQ)”to conduct inspections. The law also provides for an appeal
process in case the importer or exporter disagrees with the result of
an inspection. The law sets penalties for evading the inspection
process, trading in counterfeit goods, and corrupt practices. However,
recent problems with food and product safety demonstrate that the local
inspection offices responsible for both food and product testing may
lack robust technical abilities and the capacity to deal with the
current volume of trade.
* Key organizations: AQSIQ is China‘s leading quality and safety
agency. Standards are issued by the Standards Administration of China,
a division of AQSIQ, which also represents China in international
standards organizations. The Certification and Accreditation
Administration of the People‘s Republic of China (CNCA), which is also
technically part of AQSIQ, is responsible for certifying and
accrediting functions related to CCC tests. Numerous testing companies,
almost all partially owned by AQSIQ, carry out testing for the CCC
system. A catalogue of China‘s specific products required to obtain CCC
approval can be found on CNCA‘s Web site.[Footnote 94] In 2009, CNCA
revoked a provision to allow the limited importation of any product not
certified with a CCC mark. Unlike similar approvals for the United
States, foreign manufacturers applying for CCC approval must pay all
costs, including travel and lodging expenses of Chinese inspectors
traveling to the foreign country for factory inspections.
Routine inspections, factory checks, recalls, and other regulatory
actions are carried out mostly by AQSIQ‘s provincial representative
offices, CIQ. China also has a product recall entity know as the
Defective Product Administrative Center, a part of AQSIQ, which is
responsible for the oversight of product recalls. The center is
technically responsible for consumer products, but its primary focus is
on automobile safety. The local CIQ offices are responsible for
overseeing recalls at the local level. The national system for product
recalls is still undeveloped.
* Standards: China has a comprehensive body of regulatory standards
that fall into four categories: National Standards, Industry Standards,
Local Standards, and Enterprise Standards. Each category includes
aspects of product safety. The governing law for these categories dates
to 1988 and applies to a range of industries and fields, not just
consumer products. Some of these regulatory standards are more clearly
spelled out in product-specific codes published on the CNCA Web site.
Under China‘s system, there are both mandatory and voluntary standards.
Mandatory standards are those intended to safeguard human health,
personal property, and safety and those enforced by laws and
administrative regulations. All others are voluntary standards.
Similarly, under the CCC product certification system, some products
are not subject to compulsory certification but can be certified on a
voluntary basis. The voluntary process is known as the China Quality
Certification Center‘s Voluntary Product Certification System. It
applies to products that are not included in an itemized catalogue of
products subject to mandatory certification. The system is also an
AQSIQ function, and this certification is limited to Chinese companies
only.
* Policy enforcement and compliance: CIQ offices are responsible for
local enforcement actions. Local CIQ offices have responsibility for
inspecting and certifying factories, issuing and revoking manufacturing
licenses, issuing or revoking export permits, conducting preshipment
export inspections, and clearing or refusing goods for importation into
China. Local CIQ offices have their own laboratory facilities but often
call upon AQSIQ headquarters for policy guidance and technical support.
Local CIQ offices also have the authority to initiate a mandatory
recall, although China‘s recall system is still developing. As of July
2009, China‘s recall provisions emphasized the cessation of
manufacturing and sale of dangerous goods and included no methodical
system for the physical collection of goods already sold. According to
U.S. Embassy officials in Beijing, draft regulations in China on
product recalls represent a positive step for improved product safety.
* Authority to inspect foreign manufacturing plants: China
unambiguously holds and maintains the authority to inspect foreign-
owned plants operating in China, and such inspections are conducted by
AQSIQ and the Ministry of Health. However, for any plant operating only
for the purpose of export manufacturing (i.e., no sales in China),
AQSIQ takes a less rigorous approach to regulation. Such plants are not
required to undergo the same assessments as plants manufacturing for
local consumption.
U.S. Embassy officials in Beijing stated that they are unaware of any
memorandum of understanding that AQSIQ may have to facilitate foreign
inspections. However, the CCC system requires factory inspection to be
conducted by a certification body that has been accredited by CNCA.
Only one non-Chinese certification and testing body, Underwriters
Laboratories, has been accredited to conduct follow-up factory
inspections in the United States for CCC approval. CNCA has similar
arrangements with other countries.
[End of section]
Appendix V: GAO Contact and Staff Acknowledgments:
GAO Contact:
Alicia Puente Cackley, (202) 512-8678, or cackleya@gao.gov.
Staff Acknowledgments:
In addition to the individual named above, Debra Johnson, Assistant
Director; Meghana Acharya; Philip Curtin; Elizabeth Guran; Ronald Ito;
Marc Molino; Omyra Ramsingh; Linda Rego; Jennifer Schwartz; Jay Smale;
and Kathryn Supinski made key contributions to this report. Important
contributions also were made by Loren Yager, Director, International
Affairs and Trade; Richard Stana, Director, Homeland Security and
Justice; and Christine Broderick, Assistant Director, International
Affairs and Trade.
[End of section]
Footnotes:
[1] Pub. L. No. 110-314, 122 Stat. 3016 (Aug. 14, 2008).
[2] See Consumer Product Safety Improvement Act of 2008 § 225, Pub. L.
No. 110-314, 122 Stat. at 3070.
[3] The EU is a customs territory, but we refer to it as a country in
this report for ease of reference.
[4] Pub. L. No. 92-573, 86 Stat. 1207 (Oct. 27, 1972) (classified, as
amended, at 15 U.S.C. §§ 2051 et seq.).
[5] See Consumer Product Safety Act § 30, Pub. L. No. 92-573, 86 Stat.
1207, 1231 (classified, as amended, at 15 U.S.C. § 2079).
[6] Act of June 30, 1953, ch. 164, 67 Stat. 111 (classified, as amended
at 15 U.S.C. §§ 1191 et seq.).
[7] Pub. L. No. 86-613, 74 Stat. 372 (July 12, 1960) (classified, as
amended, at 15 U.S.C. §§ 1261 et seq.). Under the act, CPSC is
authorized to declare a substance to be a hazardous, and to regulate
the labeling of substances which are declared to be hazardous. 15
U.S.C. § 1261(f)(1)(B) and § 1262.
[8] Pub. L. No. 91-601, 84 Stat. 1670 (Dec. 30, 1970) (classified, as
amended, at 15 U.S.C. §§ 1471 et seq.).
[9] Act of August 2, 1956, c. 890, 70 Stat. 953 (classified, as
amended, at 15 U.S.C. §§ 1211 et seq.). Under the act, it is unlawful
for any person to introduce or deliver for introduction into interstate
commerce any household refrigerator, unless it is equipped with a
device enabling the door to be opened from the inside and which
conforms with the standards prescribed by CPSC. 15 U.S.C. § 1214.
[10] Pub. L. No. 110-140, Title XIV, 121 Stat. 1492, 1794 (Dec. 19,
2007) (classified at 15 U.S.C. §§ 8001 et seq.).
[11] Pub. L. No. 110-278, 122 Stat. 2602 (July 17, 2008) (classified as
a note to 15 U.S.C. § 2056).
[12] CPSC has not been authorized to receive appropriations for more
than three commissioners since fiscal year 1993. See Pub. L. No. 102-
389, Title III, 106 Stat. 1571, 1596 (Oct. 6, 1992). Section 202(b) of
CPSIA repealed this provision, effective August 14, 2009. We have
previously found that CPSC could benefit by changing to a single
administrator because some of the basic assumptions about the need to
have commissioners had not been realized. See GAO, Consumer Product
Safety Commission: Administrative Structure Could Benefit from Change,
[hyperlink, http://www.gao.gov/products/GAO/HRD-87-47] (Washington,
D.C.: Apr. 9, 1987).
[13] Products subject to such mandatory standards are often referred to
as ’regulated products.“ Regulated products that do not comply with
mandatory standards are often referred to as ’violative products.“
[14] See 15 U.S.C. § 2057; 15 U.S.C. § 1262; 15 U.S.C. § 1193; and 15
U.S.C. § 1472. Banned products include unstable refuse bins, extremely
flammable contact adhesives, lead-containing paint, consumer patching
compounds containing asbestos, artificial emberizing materials
containing asbestos, and lawn darts. See 16 C.F.R. §§ 1301-1306.
[15] Although voluntary standards do not have the force of law, every
manufacturer of a consumer product must inform the commission if they
obtain information that reasonably supports the conclusion that the
product is defective such that it presents a substantial product
hazard, as defined below. 15 U.S.C. § 2064(b). Such a report may
include information the manufacturer obtained about a product outside
the United States if it is relevant to products sold or distributed in
the United States. 16 C.F.R. § 1115.12(f).
[16] 15 U.S.C. § 2056(b)(1).
[17] 16 C.F.R. § 1009.3(a). When it appears that application of this
policy is unduly burdening the free flow of goods, the commission
states that it may consider modifications that alleviate such burdens,
but not those that do not assure the consumer the same protection from
unsafe foreign goods as from unsafe domestic goods. 16 C.F.R. §
1009.3(i).
[18] 15 U.S.C. § 2066(h).
[19] Harmonized Tariff Schedule is an extension of the six-digit
Harmonized Commodity and Coding System, the internationally recognized
classification system for commodities. The Harmonized Tariff Schedule
is a statutory authority codified at 19 U.S.C. § 1202.
[20] A manifest is a document or compilation of documents required by
law for most conveyances arriving in United States territory. A
manifest provides information describing the cargo on board the
arriving conveyance. See 19 U.S.C. § 1431; 19 C.F.R. § 4.7; 19 C.F.R. §
122.48; and 19 C.F.R. § 123.4.
[21] An imminently hazardous consumer product is a consumer product
that presents imminent and unreasonable risk of death, serious illness,
or severe personal injury. 15 U.S.C § 2061(a). CPSC states that it has
not used its authority to refuse admission of an imminently hazardous
consumer product because it requires filing an action in U.S. District
Court, which is a resource-intensive process. Instead, CPSC states that
it works cooperatively with the manufacturer to remove the product from
the market, which can include seizure and detention of products at the
port by CBP, if necessary.
[22] A product may present a substantial product hazard if it fails to
comply with a mandatory standard or is otherwise found to have a
defect, and if the product creates a substantial risk of injury to the
public.
[23] CPSC officials told us that there is statutory authority under the
Tariff Act of 1930, revised, that places certain obligations and time
constraints on CBP for issuing detention notices and making decisions
regarding detained products, but that authority expressly exempts from
those requirements detentions made where the decision as to
admissibility resides with an agency other than CBP. See 19 U.S.C §
1499. Accordingly, CPSC officials stated, neither CBP nor CPSC is bound
by those procedural constraints when merchandise is detained under CPSC
authority.
[24] 15 U.S.C. § 2066(e). CBP has the authority to supervise the
exportation of refused consumer merchandise. See 19 C.F.R. § 158.45.
[25] Effective August 14, 2009, the civil penalty maximum amounts are
$100,000 for each individual violation and $15 million for a related
series of violations. 15 U.S.C. § 2069(a)(1). The criminal penalties
for a knowing and willful violation of the Acts that CPSC enforces
could result in up to 5 years in prison and fines of up to $250,000 for
individuals and $500,000 for corporations for each offense. 15 U.S.C. §
2070(a).
[26] For example, according to CBP‘s 2009-2013 Trade Strategy, on a
typical day CBP processes over 85,000 shipments of goods worth $5.2
billion. However, CBP indicated that after steady growth in imports the
past few years, the overall value of imports entering the United States
has decreased to $900 billion as of mid-fiscal year 2009, a decrease of
$200 billion from fiscal year 2008. CBP also projects that the value of
imports for fiscal year 2009 will decline to as low as $1.7 trillion,
which was the level in 2004-2005.
[27] 15 U.S.C. § 2063(a)(1). Section 14 of the Consumer Product Safety
Act (classified, as amended, at 15 U.S.C. § 2063) has always required
that manufacturers and private labelers of consumer products subject to
a product safety standard issue a certificate that certifies that such
product complies with the applicable mandatory standard. The
certificate must be based on a test of each product or upon a
reasonable testing program. However, CPSC told us that they did not
enforce the certification requirement at the ports of entry, but rather
focused on the compliance of the product with the underlying mandatory
standard. Furthermore, the previous certification requirement in the
Consumer Product Safety Act applied only to products subject to
mandatory standards promulgated under the act rather than each of the
laws administered by the CPSC.
[28] 15 U.S.C. § 2063(a)(2). A children‘s product is defined as a
product primarily intended for children age 12 and under. 15 U.S.C. §
2052(a)(2). CPSC is in the process of defining rules by which
accredited third party laboratories are eligible to conduct testing for
conformance with certain mandatory standards; that is, the laboratories
do not receive a blanket accreditation from CPSC. CPSC is required to
establish requirements for periodic audits of accredited third party
laboratories and may withdraw accreditation under certain
circumstances. 15 U.S.C. § 2063(d)(1) and (e).
[29] CPSC provided three reasons why surveillance is focused on these
products. First, the HTS may not be specific enough to accurately
identify specific products subject to CPSC mandatory standards.
Generally speaking, the HTS is used to describe all goods in trade.
Importers use a code from the HTS to identify goods in shipments. If
the code is not specific enough, then CPSC states that it has
difficulty targeting specific products. Second, CPSC states that the
mandatory standards for these consumer products are written in a manner
that allows for easy identification of violative products at the port.
Third, CPSC states that fireworks and lighters, as well as toys, are
among the most common consumer products imported into the United
States, so it conducts increased port surveillance to prevent unsafe
products from entering the market.
[30] CPSC may by rule determine that certain characteristics of a
product or class of products, by their absence or presence, shall be
deemed a substantial product hazard if (1) the characteristics are
readily observable and addressed by voluntary standards, (2) the
voluntary standards have been effective in reducing the risk of injury,
and (3) there is substantial compliance with such standards. 15 U.S.C.
§ 2064(j). Characteristics of products often used as examples for the
substantial product hazard list include the presence of drawstrings in
hooded sweatshirts intended for children and the absence of a ground
fault circuit interrupter in electric hairdryers.
[31] Pursuant to 15 U.S.C. § 2066(b), an importer may demand a full
administrative hearing to contest a refusal of admission made on the
basis of a CPSC staff-level substantial hazard determination. CPSC
states that this is a resource-intensive process. See 16 C.F.R. § 1025.
With the substantial product hazard list, CPSC states that if its
determination to refuse admission is challenged by the importer, the
only issue at the administrative hearing would be whether the product
is on the substantial product hazard list.
[32] Products subject to no standards cannot, by law, be included on
the list. CPSC staff told us that it is very difficult to judge whether
a product is defective when there is no standard with which to compare
the product. CPSC staff stated that this is particularly true at ports
of entry where there is pressure to move products quickly into
commerce. Moreover, manufacturing or design defects in products are not
always readily apparent and can take some time to surface, sometimes
only after consumers have used the product.
[33] See ’Notice of Stay of Enforcement of Testing and Certification,“
74 Fed. Reg. 6396 (Feb. 9, 2009).
[34] See Natural Resources Defense Council, Inc., and Public Citizen,
Inc., vs. U.S. Consumer Product Safety Commission, 597 F.Supp 2d. 370
(S.D.N.Y. 2009).
[35] For example, the Retail Industry Leaders Association, a U.S. trade
group, has recently partnered with the United Kingdom‘s retailers
association, the British Retail Consortium, to develop global
manufacturing standards and risk management practices. In addition, two
trade groups that specialize in children‘s products”the Toy Industry
Association and the Juvenile Products Manufacturers Association”have
developed their own certification programs. The American Fireworks
Standards Laboratory has, for several years, had a testing and
certification program for the fireworks industry in response to the
failure of over half of all imported fireworks to meet federal safety
standards and to CPSC‘s seizure of these products in the 1980s.
[36] Through this program, CPSC has worked with CBP and U.S.
Immigration and Customs Enforcement, a component of the U.S. Department
of Homeland Security that enforces U.S. customs and immigration laws,
to implement national programs targeting (1) lighters that do not
comply with CPSC‘s mandatory regulations, (2) holiday lights that pose
a fire or electrocution hazard, and (3) toys that do not comply with
CPSC requirements. According to CPSC, the agency‘s involvement in
Operation Guardian dates back to December 2007.
[37] So far, two consumer product companies have joined the program”
J.C. Penney and Hasbro”and, according to CBP and a trade group, both
have had positive experiences thus far.
[38] See Consumer Product Safety Improvement Act of 2008 § 222(a), Pub.
L. No. 110-314, 122 Stat. at 3066.
[39] Upon completion of its risk assessment methodology, CPSIA requires
CPSC to submit a report to Congress within 180 days regarding changes
made or necessary to be made to its MOU with CBP. See Consumer Product
Safety Improvement Act of 2008 § 222(d)(2), Pub. L. No. 110-314, 122
Stat. at 3068.
[40] The time frames for receiving manifest data for goods entering the
United States through other modes of transportation”air, train, or
truck”vary.
[41] Section 405 of the SAFE Port Act requires all federal agencies
with import regulatory responsibility, including CPSC, to participate
in the International Trade Data System. Pub. L. No. 109-347, 120 Stat
1884, 1929 (Oct. 13, 2006) (classified at 19 U.S.C. § 1411).
[42] According to CBP, the 2002 MOU will likely need to be updated to
reflect changes to the relationship between CPSC and CBP that have
resulted from enactment of CPSIA, and updating the 2002 MOU may also
help CPSC prepare the risk assessment methodology described above.
[43] See Consumer Product Safety Improvement Act of 2008 § 222(b) and
(c), Pub. L. No. 110-314, 122 Stat. at 3067.
[44] The National Targeting Center is a centralized coordination point
for all of CBP‘s antiterrorism knowledge.
[45] The Automated Targeting System is a system CBP uses to target
shipments for further screening and review at U.S. ports of entry. The
system contains manifest data on shipments of consumer products.
[46] See Consumer Product Safety Improvement Act of 2008 § 202(c)(1)
and (2), Pub. L. No. 110-314, 122 Stat. at 3040.
[47] Pub. L. No. 110-314, § 224(a), 122 Stat. at 3069-70 (to be
classified at 15 U.S.C. § 2088).
[48] See GAO, Feasibility of Requiring Financial Assurances for the
Recall and Destruction of Consumer Products, [hyperlink,
http://www.gao.gov/products/GAO-09-512R] (Washington D.C.: Apr. 22,
2009).
[49] See 15 U.S.C. §§ 2065(d) and 2066(g). CPSC has authority to enter
and inspect, at reasonable times and in a reasonable manner, a ’
factory, fire-walled conformity assessment body, warehouse, or
establishment where such products are manufactured, held, or
transported and which may relate to the safety of such products.“ 15
U.S.C. § 2065(a). Also, every manufacturer, private labeler, or
distributor of a consumer product is required to establish and maintain
records reasonably required by the commission to implement the Consumer
Product Safety Act. 15 U.S.C. § 2065(b).
[50] CPSC believes that certifications and tracking labels on consumer
products may help in this regard. When implemented, certifications must
identify the manufacturer issuing the certificate and the place of
manufacture. See 15 U.S.C. § 2063(g)(1). Also, the Consumer Product
Safety Act requires, as of August 14, 2009, that tracking labels be
placed on children‘s products identifying the specific source of the
product. See 15 U.S.C. § 2063(a)(5).
[51] See, for example, 15 U.S.C. § 2056-2057 (CPSC); 21 U.S.C. § 341
and § 360d(b) (FDA); 49 U.S.C. § 30111 (NHTSA); and 21 U.S.C. § 1035, §
1036, § 453, § 456, § 601, and § 608 (USDA).
[52] See 15 U.S.C. § 2066(b) and (h), and § 2066(a-b) (CPSC); 21 U.S.C.
§ 381(a), § 381(m) and (o) (FDA); 7 U.S.C. § 7712(a), § 7713(a), §
8303(a), and § 8307(b) (USDA”live plants and animals); 21 U.S.C. §
620(a) (USDA”meat); 21 U.S.C. § 466(a) (USDA”poultry); 21 U.S.C. §
1046(a) (USDA”egg products).
[53] FDA may deny an application to introduce a new drug into commerce
in the United States if the application does not include reports of
adequate testing by all methods reasonably applicable to show whether
or not the drug is safe for use. See 21 U.S.C. § 355(b) and (e).
Products under CPSC jurisdiction that are subject to a children‘s
product safety rule must be tested by a third party. See 15 U.S.C. §
2063(a)(2).
[54] 15 U.S.C. §§ 2065(a) and 2066(g).
[55] In general, imported egg products, poultry, and meat must be
manufactured or processed in a foreign country that has obtained
certification from FSIS indicating that it maintains a safety
compliance program equivalent to that of the United States. See 21
U.S.C. § 466(d) and 9 C.F.R. Part 381, Subpart T (poultry); 21 U.S.C. §
620(f) and 9 C.F.R. Part 327 (meat products); 21 U.S.C. § 1046(a)(2)
and 9 C.F.R. §§ 590.900”590.970 (egg products). Individual drugs and
certain medical devices must obtain preapproval from FDA before they
can be introduced, delivered, or marketed in U.S. commerce. See 21
U.S.C. § 355(a) and § 360(e).
[56] See 49 U.S.C. § 30164; 49 C.F.R. Part 551. As noted in appendix II
of this report, notice of an enforcement action is one of the necessary
elements for establishing jurisdiction in a U.S. court.
[57] In re Mattel, Inc., and Fisher-Price, Inc., CPSC Dk. No. 09-C0019
(reprinted in 74 Fed. Reg. 28030 (June 12, 2009)).
[58] In re First Learning Company, Ltd., CPSC Dk. No. 09-C0026 (Jul. 8,
2009).
[59] According to CPSC, formal action against a foreign corporation
must be served following the Convention on the Service Abroad of
Judicial and Extrajudicial Documents in Civil or Commercial Matters.
658 U.N.T.S. 163 (November 15, 1965).
[60] According to USDA officials, FSIS invested approximately $19
million in fiscal year 2009 to ensure the safety of imported products,
which included costs for determining the equivalence of foreign
inspection systems.
[61] Agreement on the Application of Sanitary and Phytosanitary
Measures, signed April 15, 1994, Final Act of the Uruguay Round of
Multilateral Trade Negotiations, Marrakesh, Morocco.
[62] See 21 U.S.C. § 355(a), § 360b(a), and § 360e.
[63] See 21 U.S.C. §§ 393(b)(3), 383(b), and 360(i)(3).
[64] FDA compliance programs are documents prepared by FDA centers that
provide guidance to field staff in carrying out investigations,
inspections, sample collections, sample analyses, and regulatory
activities in defined program areas, such as domestic seafood and
pesticides in domestic foods.
[65] As stated above, all federal agencies with import regulatory
responsibility are required to participate in the International Trade
Data System, which, according to CBP, is intended to link these
agencies to CBP‘s Automated Targeting System.
[66] FSIS is developing a new risk-based public health inspection
program it calls the Public Health Information System (PHIS) that will
phase out AIIS. We did not independently review AIIS or PHIS.
[67] We did not independently review OASIS. FDA is developing a new
screening tool to replace the admissibility screening portion of OASIS
it calls the Predictive Risk-Based Evaluation for Dynamic Import
Compliance Targeting (PREDICT). The PREDICT screening tool will be
different from the legacy OASIS screening module in that it is designed
to use multiple factors including automated data mining, pattern
discovery, open source intelligence, and database queries of other FDA
Center databases to calculate a risk score for import shipments.
[68] Import alerts indicate particular risks that are screened for at
U.S. borders and face potential refusal into the United States. FDA
officials told us the agency may issue an import alert based on
information from market surveillance, border inspections, or from
information they obtain directly from foreign countries.
[69] As of July 15, 2009, the Department of State has denied FDA‘s
request to open an office in the Middle East.
[70] As of June 18, 2009, at [hyperlink,
http://www.fda.gov/InternationalPrograms/Agreements/MemorandaofUnderstan
ding/default.htm].
[71] In 2008, OECD sent out a questionnaire to its member nations on
consumer product safety. The Analytical Report on Consumer Product
Safety, DSTI/CP(2008)18/FINAL, OECD, 2008, was prepared to facilitate
discussion of the questionnaire responses at the Roundtable on Consumer
Product Safety, sponsored by the OECD Committee on Consumer Policy on
Oct. 23, 2008.
[72] GPSD aims at ensuring that only safe consumer products are sold in
the EU. According to the EU, GPSD provides a broad definition of a safe
product, and products must comply with this definition. In addition to
the basic requirement to place only safe products on the market,
producers must inform consumers of the risks associated with the
products they supply. They must take appropriate measures to prevent
such risks and be able to trace dangerous products. Under GPSD, the
member states are obliged to enforce the requirements on producers and
distributors. In addition to the power to impose penalties, the
directive gives the surveillance authorities a wide range of monitoring
and intervention powers.
[73] According to the EU, half of all dangerous products seized by
European customs and product safety authorities in 2008 came from
China, and China is the EU‘s biggest supplier.
[74] The EU‘s RAPEX system was established by the GPSD and applies to
only nonfood consumer products. It is designed to ensure the swift
transfer of information on dangerous nonfood consumer products found in
one EU member state to the European Commission and to other member
states. The system is intended to promote effective cross-border market
surveillance. Once a dangerous product is found and stopped, the
national contact point notifies national market surveillance
authorities, customs authorities, and the European Commission. The
commission validates the notification and then transmits the
information to the other countries through the RAPEX system.
[75] Summaries of these reports are publicly available at [hyperlink,
http://ec.europa.eu/consumers/safety/int_coop/july2009_after_vi_report.p
df.]
[76] The roundtable recommended greater coordination and cooperation
within and among countries and multilateral organizations. In addition,
the roundtable also recommended that governments take a more proactive
approach to product safety failure, make greater efforts to harmonize
product safety standards internationally, and work to develop a rapid
international information exchange system. See OECD Roundtable on
Consumer Product Safety”Summary Report, DSTI/CP (2009)1/FINAL, OECD
(October 2008).
[77] The Interagency Working Group on Import Safety, composed of
representatives from 12 cabinet departments and agencies, including
CPSC, was formed by executive order in July 2007. The working group
issued its Action Plan for Import Safety on Nov. 6, 2007, which
contained several recommendations designed to improve the safety of
imported products. According to a CBP official, representatives from
import safety agencies, including CPSC, continue to meet to implement
certain recommendations of the action plan.
[78] See ’Consumer Product Safety Commission Agenda, Priorities, and
Strategic Plan: Request for Comments,“ 74 Fed. Reg. 109 (Jun. 9, 2009).
[79] We previously reported that when agencies have difficulty
establishing outcome-oriented performance measures, they can develop
intermediate measures that show how programs are contributing toward
end outcomes. See GAO, Rail Safety: The Federal Railroad Administration
Is Taking Steps to Better Target Its Oversight, but Assessment of
Results Is Needed to Determine Impact, [hyperlink,
http://www.gao.gov/products/GAO-07-149] (Washington, D.C.: Jan. 26,
2007): 39-47.
[80] South Korea is also a member of the International Consumer Product
Safety Caucus, but due to resource constraints, we omitted Korea from
our analysis. The EU is a customs territory, but we refer to it as a
country in this report for ease of reference.
[81] The most common means of establishing personal jurisdiction are
(1) service of process on a defendant that is physically located within
the territorial jurisdiction of the particular court; (2) service of
process on a defendant that is not physically located within the
court‘s territorial jurisdiction, but where such service is determined
to be fair because the defendant has sufficient ’contacts“ within the
jurisdiction; or (3) a defendant‘s consent to personal jurisdiction.
[82] For example, in June 2009, CPSC reached a $2.3 million settlement
with Mattel, Inc., regarding the importation of toys manufactured in
China that violated the Commission‘s Ban of Lead-Containing Paint and
Certain Consumer Products Bearing Lead-Containing Paint (Lead-Paint
Ban), 16 C.F.R. Part 1303. In re Mattel, Inc., and Fisher-Price, Inc.,
CPSC Dk. No. 09-C0019 (reprinted at 74 Fed. Reg. 28030 (Jun. 12, 2009).
[83] See 658 U.N.T.S. 163 (November 15, 1965).
[84] CPSC announced on August 4, 2009, that Techtronic Industries Co.
Ltd., which is a foreign entity, agreed to pay a civil penalty in the
settlement of litigation filed by the U.S. Department of Justice (on
CPSC‘s behalf) in U.S. district court. In re United States v. Wagner
Spray Tech Corp. and Techtronic Industries Co. Ltd., No. 08 Civ. 6478
(D. Minn. July 23, 2009). Also, in July 2009, CPSC reached a $50,000
settlement with First Learning Company, Ltd., a Hong Kong corporation
with offices in the U.S., regarding the importation of toys
manufactured in China that violated the Commission‘s Lead-Paint Ban. In
re First Learning Company Ltd., CPSC Dk. No. 09-C0026 (Jul. 8, 2009).
[85] This table is not a comprehensive representation of all statutory
or regulatory provisions applicable to a particular regulatory
activity. In the absence of a primary statutory provision that
expressly authorizes or prohibits a particular regulatory activity, we
did not undertake an independent analysis to determine whether an
agency is authorized to undertake such activity pursuant to a general
grant of authority under the relevant implementing statute or
otherwise.
[86] Established by the President on July 18, 2007, the Interagency
Working Group on Import Safety is composed of senior officials from
twelve federal departments and agencies and is organized to
continuously improve the safety of imported goods. To accomplish this,
the group‘s strategy is to shift focus from intervention”actions taken
when risks are identified”to prevention”actions to prevent harm in the
first place.
[87] In the EU, policy responsibilities lie with the EC” the executive
arm of the EU, responsible for implementing its policies and running
its programs.
[88] Commission Decision 2008/329/EC (OJ L 114, 26.4.2008, 90).
[89] COM (2008) 9.
[90] On July 9, 2008, a new legislative framework for the marketing of
products consisting of Regulation (EC) No. 765/2008 and Decision
768/2008/EC was adopted (OJ L 218, 13.8.2008, 30, 82).
[91] The report suggests scope to develop the framework and further
actions, outlining benefits which further coordinated market
surveillance between the Member States would bring, given the
increasingly global market. It also suggests that efficiency in
addressing product safety issues would be increased if the Commission
were enabled to act more quickly to create state-of-the-art standards
for specific risky products and if a permanent ban could be imposed
under the General Product Safety Directive on products or substances
when a risk is generally recognized, rather than having to do this
through further product specific Directives.
[92] Report from the Commission to the European Parliament and to the
Council on the Implementation of Directive 2001/95/EC of the European
Parliament and of the Council of 3 December 2001 on general product
safety, Brussels, 14.1.2009, COM(2008)905 final. [hyperlink,
http://ec.europa.eu/consumers/safety/prod_legis/docs/report_impl_gpsd_en
.pdf].
[93] The drafting of specific EU standards is handled by three European
standards organizations: the European Committee for Electrotechnical
Standardization (CENELEC), the European Telecommunications Standards
Institute (ETSI), and the European Committee for Standardization (CEN).
[94] CNCA‘s English-language Web site is hyperlink,
http://219.238.178.8/20040420/column/227.htm] (accessed 7/6/09). It
lists the types of products that require CCC tests.
[End of section]
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