New Product Safety Regulations That Affect ALL Manufacturers

UPDATE: Be sure to also see this newer article on CPSIA Regulations.

This is extremely urgent, a must read.

In the forum Marnie oh so casually mentioned that new regulations governing the labeling and certification of many classes of consumer goods (including apparel) sold in the United States will go into effect November 13. This applies to all manufacturers, importers and private labellers. When she posted it yesterday afternoon, we weren’t too concerned, that affects other guys right? Wrong. Unfortunately, some of these regulations are quite onerous and the penalties are stiff. Alex Russel (Marnie’s partner, who attended the seminar with her) says Marnie didn’t emphasize the severity and stringency of the rules as these changes have been “flying under the radar”. In this guest entry, Alex will tell us more about it. But first an introduction.

Alex Russel (and Marnie Sohn) are launching a line of lingerie for busty women in the new year called Chere Gruyere Inc. Handily for us, Alex -after 8 years of working in a bank, including writing procedure manuals- has the ability to understand and interpret confusing bureaucratese.

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Importers and Private Labels Take Effect November 13th
I’m going to tell you a secret. Starting next Wednesday, November 13th, if you are a manufacturer, importer or private labeler, and you sell ANY products in the United States, you will face some stringent new product safety regulations. Interestingly, no one seems to know anything about this So, what exactly am I talking about?

Well, on August 14th, 2008, Congress passed the Consumer Products Safety Improvement Act (pdf) into law. All through the legislative debate, the act appeared to significantly strengthen the safety regulations specifically for children’s products. Nothing was said regarding general consumer products targeted at adults. But when the act was passed, tucked away in section 102 was a regulatory certification requirement that applies to ANY manufacturer, importer or private labeler of ANY consumer product. The act specified that the new regulations take effect in 90 days. Since nobody mentioned this during the debates, it took a lot of people by surprise. And since the section of the act that contains the new regulations is misleadingly named, this has added to the confusion. The Consumer Product Safety Commission (hereafter CPSC) has been scrambling to create an operational framework amid the chaos that currently reigns.

Confused? Don’t worry, everyone else is too. But don’t panic, it’s not the end of the world. Fortunately, I was able to attend a workshop hosted by the Canadian Apparel Federation who got wind of this. But let me qualify my advice by saying this: it is what we know right now. This is all up in the air, the CPSC was still taking Requests for Comments on section 102 last week. They are scrambling to get it together. The good news is that they recognize the short time frame is not workable, and are not going to start strict enforcement on the 13th. That doesn’t mean you are absolved of the responsibility to do anything but if you take a reasonable and good-faith attempt to conform, they will cut you slack if you get caught. But if you take the ostrich approach and stick your head in the sand, eventually they will bite you.

So what is this new regulatory requirement?

Every manufacturer, importer or private labeler of a product that is subject to a product safety rule or similar rule, ban, standard, or regulation, must now furnish a General Conformity Certificate (FAQ and sample in pdf) to the downstream distributor or retailer of the product, included with each shipment. The General Conformity Certificate requires nine specific pieces of information:

  1. Identification of the product covered by the certificate
  2. Specification of each CPSC product safety regulation being certified
  3. Identification of the foreign or domestic manufacturer certifying compliance of the product.
  4. Identification of the U.S. Importer certifying compliance of the product (if any)
  5. Identification of private labeler certifying compliance of the product (if any)
  6. Contact information for the individual maintaining the test results
  7. Date and place where this product was manufactured
  8. Date and place where this product was tested for compliance with the regulations cited above.
  9. Identification of of any third-party laboratory on whose testing the certificate depends.

Yikes! Well, lets take a look at some of the issues around the General Conformity Certificate, safety regulations and required testing. First you should see the FAQ and sample certificate (pdf) if you haven’t already.

Do I have to include a certificate with every shipment?

Yes, you do. This can be a simple as a photocopy included with the other waypapers. In fact, it was recommended that you could add the certificate as a part of the waybill sheet itself. CPSC has also allowed for electronic versions to be used. You can provide a unique identifier and URL with each shipment that allows access to an electronic version of the document stored on a web server. The CPSC site has some basics, but I can provide further details (including info on password protecting the info) in discussion.

Hold on! The General Conformity Certificate has some proprietary information on it! I don’t want my downstream customers to see my upstream suppliers, what can I do?

This is a bit confusing, but there is a way around it. You are required to furnish the certificate to not only to the downstream receiver included with the shipment, but also to the CPSC on request. So, the advice I received was to alter the copy provided to the downstream receiver, redacting (legalese for removing) the proprietary information and placing a note in its place indicating what you have done. Keep a complete non redacted version of the certificate on file so that it can be furnished to the CPSC on request. The information provided to the CPSC is considered confidential under the act.

What about item 2 on the certificate. What are these regulations? Are they new?

No, these are the same regulations that have always existed for consumer products. The only change is, now you have to issue the certificate to attest that your product conforms. Notwithstanding the major changes specifically for children’s products (below), there are no big changes to the existing rules and regulations for general products. For apparel, this is mainly the Fabric Flammability Act, but don’t forget that the Federal Hazardous Substances Act may cover adhesives, resins, chemical dyes, lead content and others. If your product conforms to today’s product safety regulations, you should be fine on November 13th, you’ll just need a certificate to prove it. See the full list of acts, rules, bans, standards and regulations.

What about testing? Do I need to get expensive third-party lab tests?

Well, unless you manufacture children’s products, you are not specifically required to have third-party laboratory testing done. But hang on… The General Conformity Certification needs to be based on “a test of each product or upon a reasonable testing program” that provides a reasonable assurance that the product meets the standards, and is stringent enough to detect variations that would cause the product to fail. And lets face it, a piece of fabric and a Bic lighter do not make a “reasonable” flammability test. That leads to our next question.

My supplier has already tested the product, can I use their results?

Yes, sort of, but…not a promising start to this answer, sorry. If you are an importer or private labeler dealing with a completed product, then yes, you can (don’t forget the “but”). If you are a manufacturer dealing with a raw material, then this probably applies too, but that’s not as clear. The CPSC says that an importer can certify based on the tests conducted by the foreign manufacturer, provided:

  • a copy of the test records is in English
  • the copy of the test records is in the United States
  • the importer is a resident of the US or has a resident agent

These records are required to be kept for three years. That’s pretty straightforward but there is a catch. You are absolutely responsible for the contents of your General Conformity Certificate. If your supplier provides incorrect or false test data, and your product does not conform to the regulations, you are not protected. Penalties include imprisonment for up to 5 years and fines up to $15,000,000. I don’t mean to scare you, but you need to be sure you know who you are dealing with. It comes down to trust with your suppliers. But hey, if you are suspicious, send a few random samples to a local lab to check up on them. It will be cheaper than comprehensive regular lab testing but you’ll have peace of mind. The key here is the word “reasonable”. As long as you make a reasonable attempt to ensure the product conforms, you should be OK.

I talked to my supplier/friend/manufacturer and they told me these regulations don’t apply to me/them. What’s up?

They’re probably victims of the chaos and confusion that swirls around this issue. Here’s the deal: If you make any sort of end-product, destined for consumption by regular people, this applies to you.

There are other significant changes to product safety regulations for children’s products, what about those?

I know a lot of FI readers deal with children’s products, and I must apologize to you. As I do not, I don’t have much detail about those new regulations beyond the General Conformity Certificate which applies equally to children’s products. I can tell you there are big changes, particularly with lead content, phthalates, third-party testing requirements, and mandatory tracking labels. These are all major issues, and I urge you not to ignore them. We are currently discussing these here in the forum.

Are these politicians crazy?

Yes, but you knew that already.

There are lots of details to these new regulations and I’m sure there are lots of questions. Marnie and I have just attended the workshop and we’ll do our best to answer any questions in the forums.

Just remember those important words from the Hitchhikers Guide to the Galaxy: DON’T PANIC! :)

Amended:
I noticed your (KF’s) comments regarding the budgetary/enforcement side of the issue, and this was addressed in the workshop we attended. According the the speakers, the CPSC has received significant budgetary increases. One of them indicated that the number of inspectors was going to rise. There are currently 30 CSPC enforcement officers, up from 8 last year. Who knows how many there will be next year. The research I did after the seminar shows that they were anticipating an approximate 30% increase in the budget from now until 2013. This is all a knee jerk reaction to the rash of product recalls in 2007, and I think they intend to follow through on this one. Regardless of likelihood of future increases, they got an approx $10 million increase in 2008 over 2007.

AMENDED 11/13/08: Also be sure to see this newer article on CPSIA Regulations and read the comments since many are asking questions that may be answered over there. Thanks.

Related in the forum:
The War Room: CPSIA & Consumer Safety. This is a very active section with nearly 60 different threads and over 1,000 postings. Open to the public.

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