CPSC Discusses Age Group Tariff Breakouts, ISA-PS Pilot, Detention Notices, Etc.

Highlights of these webinars include the following:

Age Group Tariff Breakouts for Toys, Etc. Expected by Dec 2010

CPSC expects that by December 2010, its requested statistical breakouts for certain Harmonized Tariff Schedule numbers (such as age groups for toys, etc.) will be approved by the International Trade Commission’s 484f Committee.¹ CPSC had asked the Committee to approve these additional breakouts to help the agency in its targeting efforts. However, CPSC states that it would never just use HTS numbers to target products, and many factors go into their risk assessment.

Wants to Extend ISA Product Safety Pilot, Considering More Benefits

CPSC discussed the joint CPSC-U.S. Customs and Border Protection (CBP) Importer Self Assessment Product Safety Pilot (ISA-PS), which was developed to encourage product safety compliance by providing certain benefits for companies qualifying as low-risk. CPSC states that there appears to be growing interest in the program and it hopes to extend it. It is also considering additional benefits such as automatic conditional release of goods.

The pilot’s evaluation period ends in December 2010, after which, a recommendation must be made on whether or not to continue the program. (See ITT’s Online Archives or 10/29/08 news, 08102900, for BP summary announcing the ISA-PS pilot.)

Staffing at Ports Growing Every Day

According to CPSC, it is adding staff at ports of entry every day and will report to Congress in February on staffing needs for future fiscal years. So far, there are dedicated CPSC inspectors in Los Angeles, San Francisco, Seattle, Houston, Laredo, Fort Everglades, Miami, Savannah, Norfolk, Newark, JFK, Buffalo, Chicago, and Detroit. CPSC adds that there is cross-training and reliance on CBP staff in locations where CPSC inspectors are not physically present.

Brokers Need to be Aware of CPSC Rules, Importers Ultimately Responsible

In response to a question on whether customs brokers and importers are co-responsible for CPSC requirements, CPSC officials stated that brokers have certain responsibilities under CBP statutes, including responsible supervision and control over the customs business they conduct. To this end, they need to be aware of CPSC requirements in order to advise their clients appropriately.

If broker knows there’s a violation and facilitates it, there would be a problem. However, in general, importers are ultimately responsible for CPSC compliance.

Update on CPSC-Issued Detention Notices

CPSC stated it is steadily progressing in its roll-out of CPSC-issued detention notices, which began in June 2010. Though most of the information repeated previous CPSC presentations (e.g. that the agency’s detention notices will generally be in lieu of CBP-issued notices, that they will contain a CPSC contact and information on the potential violation, that the trade will have 5 business days to respond, that conditional release of the merchandise may be allowed while CPSC resolves the detention, etc.), the agency added certain additional details on the following:

• Redelivery of Merchandise. Redelivery notices will continue to be issued by CBP within 30 days at the end of any conditional release period. Redelivery could lead to seizure, destruction or exportation. Failure to redeliver results in assessment of liquidated damages against importer (bond principal) and surety. Liquidated damages are three times the entered value of the shipment, but cannot exceed the amount of the bond.

• Exportation, destruction. At any time during the detention, the importer may ask CPSC to allow export or destruction of the merchandise being detained. This would be at the importer’s expense and under government supervision. CPSC states that importers may want to give serious consideration to this option, as exportation after seizure is significantly more complicated.

• Seizure. CPSC can ask CBP to seize a product under Tariff Act authority. If seized, CBP then takes over the process and CBP’s Fines, Penalties and Forfeitures Office issues notices. CBP has the authority to remit the forfeiture upon terms and conditions deemed appropriate. CPSC adds that it can suggest a disposition but cannot compel it.

• Effect of detention on importer. CPSC states that mere detention alone, even several detentions, is not necessarily a problem that would lead to debarment. After all, detention is only an assessment of a potential violation. However, an importer with numerous actual violations could lead CPSC to seek injunctive relief, which means prohibiting them from importing.

• If product detained, future scrutiny likely. If a product is detained, CPSC said that it would likely look more closely at subsequent shipments of the same product by a company.

(See ITT’s Online Archives or 07/13/10, 06/16/10 and 06/04/10 news, 10071321, 10061666 and 10060423, for BP summaries of CSPC FAQs, statements, and webinars on CPSC detention notices.)

Suggestions to Speed Entry of Consumer Products

CPSC suggested the following actions to help speed entry of consumer products:

• Correct, readily available certificates - have CPSC conformity certificates readily available (e.g., send them in electronically at entry; provide them to your customs broker; and/or put a paper version in the box) and ensure that all of the citations to CPSC regulations that you are certifying are correct.
• Correct classification. Ensure the products are classified properly.
• Product detail. Include sufficient product detail on the invoice to help with admissibility.
• Accredited 3rd party labs. Make sure any third-party labs used to test children’s products are actually accredited by CPSC.
• Sign up for ISA. Consider signing up for ISA since its participants have expedited processing.
• Avoid drawstrings. Simply avoid importing children’s upper outerwear with drawstrings.

Destruction is Now Norm Under CPSIA for Refused Products

CPSC stated that with passage of the CPSIA, products refused admission are now generally destroyed unless, upon application by the importer, the Secretary of the Treasury permits the export in lieu of destruction.

CPSIA Prohibits Imports of Recalled Products, Products w/out Certificate, Etc.

In addition, CPSC reminded the trade that the CPSIA introduced the following prohibited acts, violations of which are subject to civil penalties:

• Importation of any product not in conformity with a CPSC rule, standard or ban;
• Importation of any product subject to a voluntary corrective action taken by manufacturer (i.e. recall);
• Failure to furnish certificate or present false certificate of conformity;
• Unauthorized use of a safety mark.

Penalty & Enforcement Authority Increased Significantly Under CPSIA

Under the CPSIA, CPSC can impose civil penalties of up to $100,000 per violation (from $8,000) with a maximum of $15 million (from $1.8 million) for any related series of violations. CPSC can also now obtain injunctive relief or stop a firm from importing, and CPSC has used this authority once against the importer Daiso. (See ITT’s Online Archives or 03/04/10 news, 10030405, for BP summary of the Daiso case.)

¹Statistical breakouts at the ninth and tenth digit level do not result in duty changes. They simply add more specificity and facilitate the tracking of imports.