1. U.S. Consumer Product SafetyCommission1CPSC Staff Workshop on Electronic Filing ofCertificates as Included in Proposed Rule onCertificates of ComplianceSeptember 18, 2014This presentation was prepared by CPSC staff, has not been reviewed or approved by,and may not reflect the views of, the Commission.

2. For those of you in the room, please mute electronics and phones.For those of you watching on the web, you can email questions for the speakers to:efiling@cpsc.gov.The transcript for todays workshop will be added to the docket at:www.regulations.gov Docket number: CPSC20130017The PowerPoint presentations will also be available at:http://www.slideshare.net/USCPSC 3. U.S. Consumer Product SafetyCommission3Certificates of ComplianceSection 14 of the CPSA & 16 C.F.R. Part 1110Jacqueline Campbell, CPSC EXHRThis presentation was prepared by CPSC staff, has not been reviewed orapproved by, and may not reflect the views of, the Commission. 4. Presentation Overview Statutory Requirements What is a Certificate, When is It Needed, and WhoIssues It? Content, Form, Availability, and Filing Requirementsfor Certificates Regulatory Requirements Existing 16 C.F.R. part 1110 Rule Proposed Amendments to 16 C.F.R. part 1110 Electronic Filing of Certificates for Imported Products4 5. Statutory Requirements forCertificates5 6. Section 14(a) of the CPSA Consumer products must be tested and certified ascompliant with any applicable consumer product safety ruleunder the CPSA or similar rule, ban, standard, or regulationunder any other law enforced by the Commission.6 7. Statutory Authority Section 14(a)(1) of the CPSA Certification of non-childrens products based on a test ofeach product or a reasonable testing program. Section 14(a)(2) of the CPSA Certification of childrens products based on testingconducted by a CPSC-accepted third party laboratory. Sections 14(a) & (g) of the CPSA Provides certificate content and availability requirements. Section 3 of the CPSIA Authority to implement the CPSIA and the amendmentsmade by the CPSIA.7 8. What Is a Certificate, When Is ItNeeded, and Who Issues It?8 9. What Is a Certificate? A certification that a consumer product or other substanceregulated by the Commission:9 has been tested, and Non-childrens products a test of each product or a reasonabletesting program Childrens products testing conducted by a third party conformityassessment body (laboratory) complies with all applicable safety rules, bans, standards, andregulations. 10. All Certificate Types10 General Conformity Certificate (GCC) Childrens Product Certificate (CPC) 16 C.F.R. part 1107 Component Part Certificate 16 C.F.R. part 1109 11. Required Certificate Types11 General Conformity Certificate (GCC) Non-childrens products only Based on a test of each product or a reasonable testing program (14(a)(1) ofthe CPSA) Must comply with 16 C.F.R. part 1110 Childrens Product Certificate (CPC) Products intended primarily for children 12 years of age and younger Based on testing conducted by a CPSC-accepted third party laboratory(14(a)(2) of the CPSA) Requires periodic and material change testing Must comply with 16 C.F.R. part 1110 12. What Products Require Certificates?12 Regulated consumer products. A product subject to a consumer product safety rule underthe CPSA or similar rule, ban, standard, or regulation underany other law enforced by the Commission. Imported for consumption or warehousing, or distributedin commerce. CPSA defines distribute in commerce to mean to sell incommerce, to introduce or deliver for introduction intocommerce, or to hold for sale or distribution afterintroduction into commerce. 13. When Is a Certificate Not Required?13 No product safety rule, standard, or ban applies Products subject to a rule under section 15(j) of the CPSA Drawstrings on childrens upper outerwear Immersion protection on hand held hairdryers Products not imported for consumption or warehousing or notdistributed in commerce Foreign Trade Zone Samples Trade Show Exhibit Component parts not for individual sale. 14. Who Issues a Certificate and When?14WHO?Manufacturers (including importers) and privatelabelers.WHEN? Before importing products for consumption orwarehousing or distributing products in commerce. 15. Statutory Certificate Requirements15Content 14(a) and (g)(1) of the CPSA English Language 14(g)(2) of the CPSAAvailability 14(g)(3) of the CPSA Electronic Filing of Certificates for ImportedProducts 14(g)(4) of the CPSA 16. Certificate Requirements: Content16 Identification of the product(s); List each applicable consumer product safety regulation; Identify; The manufacturer (including importer) or private labeler issuing thecertificate. The third party conformity assessment body on whose testing thecertificate depends, if applicable. Date(s) and place(s); Where the product was manufactured. Where the product was tested for compliance with each safety rule. Each partys name, full mailing address, telephone number; and Contact information for the individual maintaining records oftest results. 17. Certificate Requirements: Language17 Legible All required content in EnglishMay contain the same content in anotherlanguage 18. Certificate Requirements: Availability18Required certificates must: accompany the product or shipment of productscovered by the certificate; be furnished to each distributor or retailer of theproduct; and be furnished by the issuer to the Commission, uponrequest. 19. Electronic Filing Requirements In consultation with CBP, the CPSC, by rule, mayprovide for the electronic filing of certificates upto 24 hours before arrival of an importedproduct.19 Issuer must furnish certificates to CBP and toCPSC, upon request. 20. Regulatory Requirementsfor Certificates20 21. Existing 16 C.F.R. Part 1110 Rule21 22. Background on Part 1110 Consumer Product Safety Improvement Act of 2008 (CPSIA) wasenacted on August 14, 2008. The Commission issued a rule on certificates of compliance, 16C.F.R. part 1110, on November 18, 2008 (73 FR 68328). Existing part 1110 rule sets forth certificate requirements, such as: limiting the parties who must issue a certificate; allowing certificates to be in hard copy or electronic form; clarifying requirements for an electronic form of certificate;and providing certificate content requirements that follow thestatute.22 23. Product Testing & Certification Rules 16 C.F.R. part 1107 Testing and Labeling Pertaining to ProductCertification 16 C.F.R. part 1109 Component Part Rule 16 C.F.R. part 1110 Certificates of Compliance23 24. Product Testing & Certification Rules 16 C.F.R. part 1107: Testing and Labeling Pertainingto Product Certification Sets forth requirements for certification,material change, and periodic testing ofregulated childrens products.24 25. Product Testing & Certification Rules 16 C.F.R. part 1109: Component Part Rule Provides for component part testing and reliance onanother partys testing or certification. Component Part Certificate voluntary (never required) can be used to support a GCC or a CPC can be issued by any party as long as it complies with 16C.F.R. part 1109 NPR proposes certificate must meet the form, content,and availability requirements described in 16 C.F.R. part111025 26. Proposed Amendments to16 C.F.R. part 111026 27. 2013 NPR to Amend Part 111027 On May 13, 2013, the Commission issued a NPR to amend theexisting 1110 rule (78 FR 28080). The NPR proposed to: Clarify certificate requirements in light of the testing and componentpart rules, and Define and use new terms Describe how certificates must be integrated and consistent with these new rules Implement electronic filing of certificates. Section 14(g)(4) of the CPSA allows the Commission, in consultation with theCommissioner of Customs, to require that certificates for imported products befiled electronically with CBP up to 24 hours before arrival of an importedproduct. 28. Who Must Certify ProductsManufactured Outside of the U.S.? CPSA requires that certificates be issued by amanufacturer, importer, or private labeler (as definedby the CPSA). Existing 1110 rule requires certificates for importedproducts to be issued by the importer. NPR would continue to require certificates for importedproducts to be issued by the importer.28 Except for products delivered directly to a consumer. 29. Proposed Amendments:Certificate Availability Proposed rule implements accompany requirements for importedproducts: Importers must file certificates electronically with CBP at the time of filing theCBP entry or the time of filing the entry and entry summary, if both are filedtogether. For all other purposes of providing a certificate, NPR maintains thatcertificates may be paper or electronic (i.e., URL) for:29 Request by CPSC or CBP; or Furnishing to Retailers or Distributors. Proposed rule also sought comment on allowing filing of certificates ata time earlier than entry (at manifest). 30. Electronic Filing ofCertificates for ImportedConsumer ProductsProposed 16 C.F.R. 1110.13(a)(1)30 31. Why Electronic Filing? CPSC proposes to receive data elements from certificates into ourRAM system, which can be used to:31 Expedite clearance; Identify high risk cargo for inspection; Conduct post-importation enforcement; Generate reports to assist with: Risk assessment; and Setting agency priorities and goals; Meet objectives of EO 13659, Streamlining the Export/Import Processfor Americas Businesses. 32. Proposed Electronic Filing:Technology32 The NPR mentions two data types: PDF file Data elements The NPR stated that the Commission prefers dataelements so that the information can be uploaded andsearchable in a database. 33. Proposed Electronic Filing:TechnologyNPR recognized electronic filing of certificateswould require:33 Implementation in phases Software upgrades CBPs technology requires CBPs assistance andcooperation to implement 34. Conclusions The statute imposes basic certificate requirements. The NPR proposes several amendments to the current1110 rule, including filing electronic certificates withCBP at entry. The Commission is considering the process andrequirements for electronic filing.34 35. CPSC Electronic Filing of CertificatesWorkshopNancy MacPherson, Director External Relations 36. Key Concerns1. The proposed requirement uses assumptions on the number of importtransactions that significantly underestimate the impact of having to uploadeach certificate 24 hours in advance of import.2. The proposed rule does not address import processes that utilize a ForeignTrade Zone (FTZ).3. The apparent lack of process flexibility in the proposed rule discounts currentprocesses and IT systems that already permit the CBP and CPSC immediateaccess to the certificate data 24 hours in advance of import.4. Changes do not streamline the Export/Import process for Americasbusinesses as per Executive Order 13659 which is intended to reduce supplychain barriers and to modernize and simplify the way agencies interact withtraders. They might simply create a bigger data haystack in which to find theviolative needle. 37. LEGO US Import OverviewDallas DC is a Foreign Trade Zone (FTZ)2013 Activity1,500,000 Avg. # sets packed in the LEGO factory inMonterrey, Mexico and shipped to the DC near Dallas80-160 Trucks per week between factory and DC100-150 Trucks per week leaving DC with customer shipments(The point of import from the FTZ)1150 Avg. # unique SKUs shipped per week to customers1500 Peak # unique SKUs shipped per week in high season 38. As compared to..CBP estimated that in 2005, more than 70 to 85 percent of all importersimported fewer than 12 shipments. Additionally, This (referencing cost)estimate is based on the assumption that one certificate of conformancewould be required per shipment.NPR CPSC-2013-0017 SEC VI, B (Reporting and Recordkeeping) LEGO A/S usually processes one import transaction per week in accordancewith FTZ regulations Each entry could include up to 1500 different certificates given 1 per SKU andup to 15000 data elements.each week. 39. Import Flow of Goods and Entry Documents 40. The current LEGO Certification processensures certificates accompany theproduct, are immediately available toCBP and can also be accessed 24 hoursahead of import without anyduplicative uploading of data. 41. www.LEGO.com/Compliance 42. Recommendations1. Provide flexibility to accommodate various supply chainmodels. The proposed rule describes one option, but thatshould not be the only option. If there are alternative meansfor providing CBP access to the certificates they should beallowed.From PR: CPSC is considering allowing, but not requiring certificates to be filed inadvance2. Ensure that FTZ processes, including when an item isimported, are recognized and integrated into any rulechanges. 43. Thank you 44. Proposed Joint Presentation of the Retail IndustryLeaders Assoc. & the National Retail FederationBefore the U.S. Consumer Product Safety CommissionWorkshop on Proposed 16 CFR Part 1110 Electronic Filing ofCertificates of ComplianceSeptember 18, 2014Kathleen McGuigan, Senior Vice President, Legal &Regulatory Affairs, RILA: kathleen.mcguigan@rila.orgJon Gold, Vice President, Supply Chain and CustomsPolicy, NRF: goldj@nrf.org 45. CPSC Workshop onElectronic Filing ofCertificates of ComplianceSean T. Murray, Esq.Representing the NAFTZSeptember 18, 2014 46. National Association of Foreign-TradeZones Represents the interests of U.S. Foreign-Trade Zone(FTZ) grantees, operators, and users Composed of public and private member representativesacross the United States FTZs handle a significant volume of U.S. internationaltrade Approximately 12.4% of all imports move through FTZs Calendar Year 2013 data: Shipments into FTZs totaled $835 billion (including $290.3 bnforeign and $545.5 bn domestic status merchandise) Warehouse/distribution operations received over $264 billion inmerchandise FTZ production operations received over $571 billion inmerchandise Over $79 billion in exports from FTZs 3,050 firms employing 390,000 persons used FTZs 47. Response to CPSC Certificates ofCompliance Proposed Rule FTZs have unique trade function; also unique procedures Used to store/stage merchandise that never enters the U.S.Customs Territory With specific U.S. FTZ Board approval, used by manufacturersto produce goods in the U.S. using foreign components Used as safety valve for addressing damaged, scrap,unknown products FTZ users need procedures that do not impose unnecessaryburden on the FTZ unique operations 48. Response to CPSC Certificates ofCompliance Proposed Rule We request that FTZs be specially recognized so that theCPSC rules Do not apply to merchandise admitted into and held in an FTZ Do not apply to component parts of finished products that areproduced in an FTZ That the CBP-recognized FTZ inventory control systems beaccepted for CPSC purposes That CPSC documentation only be required to be filed with theCBP Form 7501 Entry Summary for merchandise entered forconsumption from an FTZ That CPSC documentation not be filed for exports from FTZs 49. Unique FTZs Operations WeeklyEntry 19 U.S.C. 1484(i) authorizes FTZ operators/ users tofile weekly estimated Customs entries for a businessweeks shipments into the U.S. Customs territory insteadof one Customs entry per shipment FTZs establish a 7-day zone shipping week and obtain CBPapproval to file an estimated CBP Form 3461 NAFTZ believes that the large majority of activated FTZoperators and users utilize weekly entry procedures Submitting CPSC certificates of compliance at the time ofentry or at the time of entry summary is problematicunder Weekly Entry The CBP Form 3461 for Weekly Entry is just an estimate usedfor purposes of securing a CBP release to enter merchandiseover the upcoming 7-day zone week; it is not related to actualshipments or merchandise from the FTZ 50. Unique FTZs Operations InventoryControl and Recordkeeping FTZ companies can choose to manage theirinventory for purposes of reporting to CBP usingeither a specific identity (lot) methodology or aunique identifier number (UIN) (record identity)methodology Many FTZ companies ship commerciallyinterchangeable merchandise that is managed by aUIN methodology and reported on a FIFO basis, not onthe actual country of manufacture of the physicalmerchandise in the particular shipment Track using inventory control and recordkeepingsystem (ICRS) Use of inventory control methodology and WeeklyEntry poses challenge to tying CPSC certificates ofcompliance to physical shipments 51. Unique FTZs Operations Scrap,Waste, Repair, Reconditioning CPSC should continue to recognize FTZs as a placeto bring merchandise into compliance beforeCustoms entry 52. General Comments Filing CPSC Certificates of Compliance at entry willplace a burden on industry Uploading process would be a significant burden to manyimporters Estimated cost burden for importers required to filecertificates of compliance is significantly undervalued Need to keep business-proprietary information privatePLF/PP/113243 53. CPSCSeptember 18, 2014 54. Role of the Customs Broker56 Trade Facilitator No financial interest in the imported goods Definition of Importer (party whose actions caused thegoods to be imported) versus Importer of Record Identification of shipments requiring CPSC Reporting(HTS# flags)Prioritize HTS # requirements, e.g. High Priority assignedto child safety seats and data required at entry releaseLow(er) Priority goods fewer data elements and possiblepost entry reporting 55. Reporting Challenges57 Amount of and availability of data to be reported Cost to Broker, Carrier and Importers including small &medium sized enterprises and individuals: Cargo Holds significant increase Demurrage, CES warehouse costs Cargo Abandonment product destruction costs Cost to report additional data 56. Reporting Challenges58 Cost estimate for UPS Express shipments for 1 year significant impact to the importing community Held shipments would overwhelm existing storage capacity(estimated impact 75% of current shipments) Large staffing increases to handle held package volume Additional document requirements - brokerage US Consumer is impacted through added costs to shipand shipping delays 57. Opportunities59 Transaction by Transaction Based ProgramImplement a de minimis rule for products subject tocompliance certificatesProvide relief in reporting requirements for low prioritymerchandise, personal shipments (not entering thecommerce of the USA)Opportunity to develop a Trusted or Known Importer ProgramBlanket Certificates of Compliance (COC)Certificates of Compliance issued by foreign manufacturer 58. CPSC Certificates of Compliance Section 1110 RuleWorkshopPresented by:Alan P. KaufmanSenior Vice-President, Technical AffairsSeptember 18, 2014 | Bethesda, Maryland 59. Toy Industry Association (TIA) Trade association for North American-based manufacturers, importers,licensors and toy retailers (regular members) Associate members include inventors, designers, testing labsCPSC Certificates of Compliance Workshop| September 18, 2014 61 Formed in 1916 Long History of Dedication to Child Safety Over 750 members Members represent approx 85% of the U.S. market 60. Toy Industry AssociationToy Companies, Licensors, Inventors and Designers, Manufacturers Reps, RetailersCPSC Certificates of Compliance Workshop| September 18, 2014 62 61. A Snapshot of the U.S. Toy IndustryAverage price of a toy is less than US$9.00An estimated 3 Billion+ units sold each yearUS$22+ Billion in direct toy sales (2013)Estimated 512,775 FTE toy industry jobs in the United StatesTotal annual economic impact of US$69 BillionCPSC Certificates of Compliance Workshop| September 18, 2014 63 62. Stakeholders Current Certificate and ImportProcedures Current 1110 Rule/Toy Importer practices Original 1110 rule allowed flexibility in requirements forcertificates of conformity Each importer developed system best suited to their operationsand supply chains No issues have been raised by CPSC to date with currentsystems companies have in place Current systems adequately meet needs of CPSC and importers;importers have adapted to current level of administrativeburdenCPSC Certificates of Compliance Workshop| September 18, 2014 64 63. Stakeholders Current Certificate and ImportProcedures (cont.) Issues with proposed changes to the 1110 rule: No evidence that proposed changes would improve safety Would add significant costs for industry Current CPSC targeting methodology adequately identifies higher-riskCPSC Certificates of Compliance Workshop| September 18, 2014 65imports Port staffing and expertise is current limiting factor, not inability totarget No evidence that electronic submission of CoCs would improvetargeting efficiency or safety of imported product 64. Stakeholders Current Certificate and ImportProcedures (cont.) Benefits of current 1110 Rule On Demand Certificate System Allows for certificates to be produced on request to either CPSC orCBP no later than 24 hours after request This meets needs of CPSC and CBP while minimizing importerburden Due to varying supply chain management systems, requiring aone-size-fits-all system of filing at entry is not workable for theindustry at largeCPSC Certificates of Compliance Workshop| September 18, 2014 66 65. Stakeholders Anticipated Challenges in Meetingan Electronic Filing Requirement Costly Changes to Current Requirements-Underestimated by CPSC Requiring certificates to be filed at entry will be extremely costlyfor the toy industry Linking certificates to cargo containers will require costlydatabase reconfigurations for companies Consolidated freight will present special challenges-possibilityof multiple importers for same container Systems that have worked well since 2008 will need to betotally revamped under the proposed rule, with no anticipatedadvancement in safetyCPSC Certificates of Compliance Workshop| September 18, 2014 67 66. Stakeholders Anticipated Challenges in Meetingan Electronic Filing Requirement (cont.) CPSCs Regulatory Flexibility Act (RFA) analysis contemplates typicalshipping systems which are anything but typical Dramatically underestimates the number of shipments andcertificates companies are responsible for maintaining Ignores the extreme seasonality of toy and consumer productimports, with a majority occurring in the last calendar quarter ofthe year RFA estimate is that importers ship fewer than 12 shipmentsannually, but this low figure is applicable to only the smallest toyimporters; several TIA members import more than 12 shipmentsper day.CPSC Certificates of Compliance Workshop| September 18, 2014 68 67. Stakeholders Anticipated Challenges in Meetingan Electronic Filing Requirement (cont.) Consolidated cargo co-loads product from multiple importers; thiswill further complicate certificate submission, as release of allcargo is dependent upon all importers timely submittingcertificates Regardless of the number of shipments, each container maycontain many different products requiring potentially hundreds (considering component part certificates) of different certificates besubmitted at entry This means that the RFA estimate will need to be revisedexponentially upward, and thus the costs associated with filingentries will likewise increase many-foldCPSC Certificates of Compliance Workshop| September 18, 2014 69 68. Stakeholders Anticipated Challenges in Meetingan Electronic Filing Requirement (cont.) Methods of Importation Vary The proposed rule does not contemplate costs and challengesassociated with imports coming across our borders by truck or rail,rather than on cargo ships Trailers may be filled with manydifferent product lines at a factory and placed on trucks that leavefor import when full Trailers could contain any different number of products andeach would require a certificate (or multiple certificates) to befiled Multiple trucks with multiple products are shipped every dayusing this method; this will potentially cause a logisticalnightmare entering certificates of specific products in eachtruck into CBPs systemCPSC Certificates of Compliance Workshop| September 18, 2014 70 69. Stakeholders Anticipated Challenges in Meetingan Electronic Filing Requirement (cont.) CBP is Not Yet Able to Handle the Influx of Data Proposed in Rule As stated in the proposed rule, CBPs systems do not yet have thecapability to handle all CPCs to be filed at entry It is premature for CPSC to require such a mandate when theagency charged with controlling the data portal is not ready forsuch information to be filed, and may not be for some time (if ever) TIA urges CPSC to develop a multi-stakeholder group that includesindustry, CBP, CPSC, import specialists and other interested partiesto guide the agency on this regulation and othersCPSC Certificates of Compliance Workshop| September 18, 2014 71 70. Issues to be resolved from CBPs DIS and PGAMessage Set Tests in ACE Does CBP have the bandwidth to handle the volume of data that willbe generated by supplying CPCs and GCCs at entry, especially ifimporters only have the capability to submit PDF files which often canbe large? When will CBPs ACE system be ready to handle such data? What is the timeline for implementation of the single-windowsystem contemplated in EO 13659?CPSC Certificates of Compliance Workshop| September 18, 2014 72 71. CPSCs RAM Pilot TIA is supportive of the RAM program and urges the CPSC to expandthe program beyond the pilot program What criteria are CPSC using to target shipments for inspection? The toy industry is happy to provide any information to the agencythat will lead to more targeted inspection Industry is concerned about sharing confidential businessinformation with CPSC in a manner (e.g. unsecured website)that could jeopardize relationships of importers with theirsupply chains, especially if safety benefit is marginalCPSC Certificates of Compliance Workshop| September 18, 2014 73 72. Thank You! Questions?Al Kaufman(646) 520-4868akaufman@toyassociation.orgCPSC Certificates of Compliance Workshop| September 18, 2014 74 73. www.anderinger.com 2013 A.N. Deringer, Inc.CPSC - ITDSHeritage of Trust Since 1919 Who should be responsible for filing the certificate? Definition of Importer Exclusion of Customs Brokers How and when must certificates be made available? Time of submission and format ITDS/PGA message set/DIS HTS# Flags Supply Chain Northern Border vs. AV shipments Wait times 74. Electronic Filing of Certificates ofCompliancePresentation of the Bicycle Product Suppliers AssociationAt the CPSC WorkshopErika Z. Jonesejones@mayerbrown.comSeptember 18, 2014CPSC Docket 2013-0017Mayer Brown is a global legal services provider comprising legal practices that are separate entities (the "Mayer Brown Practices"). The Mayer Brown Practices are: Mayer Brown LLP and Mayer Brown Europe-Brussels LLP, both limited liability partnerships established in Illinois USA;Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales (authorized and regulated by the Solicitors Regulation Authority and registered in England and Wales number OC 303359); Mayer Brown, a SELAS established in France; Mayer BrownJSM, a Hong Kong partnership and its associated legal practices in Asia; and Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. Mayer Brown Consulting (Singapore) Pte. Ltd and its subsidiary, which are affiliated with Mayer Brown, providecustoms and trade advisory and consultancy services, not legal services. "Mayer Brown" and the Mayer Brown logo are the trademarks of the Mayer Brown Practices in their respective jurisdictions. 75. Bicycle Product Suppliers Association BPSA is an association of over 70 manufacturers,importers and suppliers of bicycles, parts, accessories andservices who serve the specialty bicycle retailer. BPSA members are interested in this proposed rulebecause they manufacture, import and sell threecategories of regulated products required to have COCs: Bicycles Bicycle Helmets Clothing In addition, BPSA is interested because the proposalsuggested possible expansion to replacement parts. 76. Summary of BPSA Position on the Proposal to RequireElectronic Filing of COCs The CPSC has underestimated the costs of compliancewith the proposal. The proposed tracking requirements would be difficult tomanage. Mandatory electronic filing is premature. Current CBP capabilities require manual uploading of PDFs ofeach certificate into the automated system. This is labor-intensive and introduces potential for error. And, it is unclear if CBPs system will accept PDFs of CPSC GCCs. Practicability problems increase significantly ifreplacement parts are included. 77. Costs of Compliance Have Been SignificantlyUnderestimated CPSC estimated 1,900 bicycle models sold annually, basedon an extrapolation of its estimate of childrens bikemodels. However, BPSA estimates 7,170 bicycle models are beingsold in 2014 through the independent distributor (IBD)channel (this has increased since 2013). Many more models are sold through mass market channels. If a COC is issued only once a year for these models, usingCPSCs time and labor estimates, the annual incrementalcost for IBD bicycles alone exceeds $450,000 and farmore when mass market bicycles, helmets and clothingare included. 78. Cost of Compliance, Continued And, BPSA respectfully submits that CPSCs time and laborestimates are too low. Many bicycle models receive new COCs more than onceannually due to changes in components or other reasons. The CPSCs estimate does not take into account thesubstantially increased manual labor required to uploadthe certificates to CBPs website under the current systemdesign. 79. The Proposed Tracking Requirements Would BeDifficult to Manage CPSC proposed to require (among other things) that theGCC identify the scope of finished products for which theGCC applies, such as by start date, start and end date, lotnumber, starting serial number or serial number range orother means. This appears to go far beyond the existing requirement toidentify the month and year of manufacture. This proposal is complicated further if extended to thehundreds of thousands of models of components andaftermarket parts, which are rarely serialized or datecoded now. The bicycle industry supply chain is not equipped for this. 80. Mandatory Electronic Filing is Premature It is BPSAs understanding that CBPs ACE system is notequipped to accept the data elements from CPSCs 1110rule at this time. Thus, the only process for filing electronic certificateswould apparently be a labor-intensive, manual upload ofPDFs of each certificate. It is not clear that CBP will even accept PDF attachments. This imposes great costs and introduces potential forhuman error, with no commensurate improvement inconsumer product safety. 81. Conclusion CPSC should not require electronic filing of GCCs with CBP. To BPSAs knowledge, CBPs system is not yet ready toaccept true electronic filings of GCCs, and would insteadrequire labor-intensive manual uploads. The current system of making GCCs available on requestis working well. The additional costs of mandatory electronic filing havenot been justified, nor is there any evidence that such arequirement will improve safety. 82. CPSC WORKSHOP ONRULE 1110SEPTEMBER 18, 2014 83. MEMBERSEXPRESS ASSOCIATION OF AMERICA 84. RESOURCES Over 1.2 Million Employees $200 Billion in Revenues Annually 30 Million Shipments Delivered Daily Over 220 Countries and TerritoriesServedEXPRESS ASSOCIATION OF AMERICA 85. INTEGRATED END-TO-END PROCESSImage Capture atOrigin (Shipperdocuments)Manifest CreationAdvancedManifest ReviewDownloads to:AMS/ATSClearance SiteBrokerShipment creation( AWB /Automation)Entry Prep &SubmissionSelectedHeldACASReleasedDomesticNetworkCaged- Indicates Physical Package ScanCustomerLocationOriginStationExport Import DomesticStationOperationsPODScanning at ArrivalVery tight cycle with demanding deadlines entire process complete in 24 hours 86. RULE 1110 KEY ISSUES Trade Act 2002 party with the bestinformation on the shipment should beresponsible for providing it For product safety issues, party with bestinformation is the importer, owner of goods Importer of record is a nominal consignee, aconvenience for completing the financialaspects of the transaction For products sold online, seller is responsibleparty Brokers cannot certify if product is incompliance EXPRESS ASSOCIATION OF AMERICAImporters do not want carriers representing 87. OPTIMUMSOLUTION CPSC provide list of products requiring certificate Submit certificates electronically When importer obtains certificate, load it intoDocument Imaging System (ITDS) Provide certificate post-release for otherwisecompliant shipments Continue to provide certificate on demand, notwith every shipment If IOR has to hold goods pending receipt ofcertificate, costs and time delays increase potentially hundreds of itemsEXPRESS ASSOCIATION OF AMERICA 88. LONGER TERM CPSIA = CPSC has trade facilitation mission Private sector cannot carry out enforcement actions Establish ongoing dialogue with trade to addressissues and find best solutions Leverage relationship with CBP to createWorking Group under COAC auspices Identify information CPSC really needs improverisk targeting Executive Order on ITDS Government needscommon approach to risk management Identify trusted traders and provide meaningfulbenefitsEXPRESS ASSOCIATION OF AMERICA 89. QUESTIONS?Michael C. MullenExecutive DirectorTel: 703 759-0369Michael.mullen@expressamerica.orgEXPRESS ASSOCIATION OF AMERICA