The National Association of Manufacturers

1331 Pennsylvania Avenue, Suite 600

Washington, DC 20004-1790

(202) 637-3000

www.nam.org

Consumer Product Safety Regulation – GHTA

The NAM‘s mission is to advocate on behalf of its members to enhance the

competitiveness of manufacturers by shaping a legislative and regulatory

environment conducive to U.S. economic growth and to increase

understanding among policymakers, the media and the general public about

the vital role of manufacturing in America‘s economic and national security for

today and in

the future.

• The NAM is the leading advocate of a pro-growth, pro-manufacturing

agenda.

• The NAM is a partner in reinforcing the legislative and regulatory activities

of its member firms.

• The NAM is a primary source for information on manufacturers‘

contributions to innovation and productivity.

The NAM Mission

• The NAM is the largest multi-industrial trade association, with 11,000

companies of all sizes as members;

• The NAM represents 12 million manufacturing employees;

• The NAM includes 350 trade associations in its membership;

• Member companies of the NAM are responsible for 85 percent of

U.S. manufacturing output;

• The NAM represents every industrial sector;

• The NAM is composed of members from all 50 states; and

• The NAM hosts the CPSC Coalition – the leading coalition of

manufacturers, distributors, and retailers committed to ensuring safe

consumer products and reasonable regulation

What Is the NAM?

Size Breakdown of NAM-Member Companies

Challenges

Regulatory Compliance Costs

• Since 2000, costs related to compliance with government regulations have

increased 10.2 percent annually.

• Compliance with environmental, economic, workplace and tax rule and

regulations cost American manufacturers $162 billion annually.

• The average annual regulatory compliance cost per manufacturing

employee is currently $10,175. This is considerably higher compared to

firms in other sectors of the economy, which average $5,633 per employee.

• The cost per employee for small firms (meaning fewer than 20 employees)

was $21,919 or 118 percent higher than the cost per employee for medium-

sized firms (defined as 20–499 employees). And it was 150 percent higher

than the $8,748 cost per employee for large firms (defined as 500 or more

employees). The federal government also imposes over 9.3 billion hours of

paperwork on the public each year.

Product Safety

Product Safety

Why should you care about the CPSIA?

• Higher Fines and Penalties

• New testing requirements for children‘s products

• New certification requirements for all consumer

products subject to CPSC rules, bans or

standards

• Product tracking label requirements

• Product Safety Database

• State Attorneys General Enforcement

• 2/10/2010 – End of stays of enforcement

Tougher Penalties

• Civil penalties increased from a maximum of $5,000 per incident to $100,00

per incident

• Total civil penalty maximum increases from $1.25 million to $15 million

• Criminal penalties of up to 5 years in prison for a knowing and willful

violation

• Enhanced liability for directors, officers and agents (previously required

notice of noncompliance before liability existed)

• Penalties include forfeiture of assets associated with the violation

What is a children‘s product?

CHILDREN‘S PRODUCT.—The term ‗children‘s product‘ means a consumer

product designed or intended primarily for children 12 years of age or

younger.

Relevant Factors:

• A statement by a manufacturer about the intended use of such product,

including a label on such product if such statement is reasonable.

• Whether the product is represented in its packaging, display, promotion, or

advertising as appropriate for use by children 12 or younger.

• Whether the product is commonly recognized by consumers as being

intended for use by a child 12 years of age or younger.

• The Age Determination Guidelines issued by the CPSC

What is a children‘s product? (cont‘d)

• Items that are as likely to be used by adults as by children are general

purpose not children's items.

• Price point and marketing of an item can suggest that it is intended for both

adults and children, meaning it is not a child's item.

• Colors, decorations and embellishments do not necessarily make the item a

child's product.

• Application of a school's name does not necessarily make it a child's

product.

• Application of a cartoon character does not necessarily make it a child's

product.

• Occasionally marketing an item for school use does not convert a general

purpose item into a children's product.

Lead Ban and Third-Party Testing

Children‘s products are treated as a banned hazardous substance if they

contain more than 300ppm lead.

Third-party testing required for children‘s products for compliance with new

lead content limits, lead paint limits, crib standards, small parts rules,

children‘s metal jewelry rules, baby bouncers, walkers, and jumpers, and all

other children‘s product safety rules once labs are accredited to test to the

new standards.

Exceptions for ―inaccessible parts,‖ certain electronic devices, materials

determined by the Commission not to contain lead or products or materials

determined not to result in the absorption of any lead or any other adverse

impact on public health or safety

Exclusion Process

Commission has reviewed several requests for exclusion and has denied

exclusions for:

• Crystal, Glass Beads, CZ and Rhinestones

• Brass

• Youth model ATV‘s

• Children‘s Bicycles

• Pens

DENIED!

Product Safety Certification

‗(1) GENERAL CONFORMITY CERTIFICATION- Except as provided in paragraphs (2) and (3), every

manufacturer of a product which is subject to a consumer product safety rule under this Act or similar

rule, ban, standard, or regulation under any other Act enforced by the Commission and which is

imported for consumption or warehousing or distributed in commerce (and the private labeler of such

product if such product bears a private label) shall issue a certificate which—

‗(A) shall certify, based on a test of each product or upon a reasonable testing program, that such

product complies with all rules, bans, standards, or regulations applicable to the product under this

Act or any other Act enforced by the Commission; and

‗(B) shall specify each such rule, ban, standard, or regulation applicable to the product.‘.

.

Product Safety Certification

3) AVAILABILITY OF CERTIFICATES- Every certificate required under this

section shall accompany the applicable product or shipment of products

covered by the same certificate and a copy of the certificate shall be

furnished to each distributor or retailer of the product. Upon request, the

manufacturer or private labeler issuing the certificate shall furnish a copy of

the certificate to the Commission.

Reasonable Testing Program

1. Product specs which describe the product and

rules/bans/standards that it must comply with;

2. Certification tests which prove the product can meet those

standards;

3. A production testing plan that includes reasonable intervals for

testing;

4. Remedial action plans for when a sample product fails a test, and

5. Documentation of the reasonable testing program and how it was

implemented

Product Tracking Labels

The manufacturer of a children‘s product shall place permanent, distinguishing

marks on the product and its packaging, to the extent practicable, that will

enable—

(A) the manufacturer to ascertain the location and date of production of the

product, cohort information (including the batch, run number, or other

identifying characteristic), and any other information determined by the

manufacturer to facilitate ascertaining the specific source of the product by

reference to those marks; and

(B) the ultimate purchaser to ascertain the manufacturer or private labeler,

location and date of production of the product, and cohort information

(including the batch, run number, or other identifying characteristic).

Database

In the next twelve to fifteen months the CPSC must deploy an online

searchable database of reports of harm relating to consumer products

regulated by the Commission from consumers, state and local government,

health care professionals, child service providers, and public safety entities

Manufacturers will be given an opportunity to see complaints and respond

within a 5 day window before the complaint is made publicly available

No system or verification protocol has been designed to ensure the accuracy

of information submitted to the database

End of Stays of Enforcement

2/10/2010 – Stay of Enforcement on testing and certification of products

subject to lead limits.

Still illegal to manufacture, sell or distribute in commerce products that do not

meet the standards.

Exceptions to the stay included painted children‘s products which must meet

the 90ppm standard and children‘s metal jewelry.

State Attorneys General not subject to CPSC enforcement discretion.

Component Testing

Awaiting a final rule on the ability of manufacturers or assemblers or finished

product distributors or private labelers to rely on certifications of compliant

components coupled with exempted materials to be relieved of obligations

to test under the law

Requirements do not automatically move up the supply chain.

Still unanswered questions about liability. How comfortable should you be

about supplier certifications?

Manufacturer definition is ―domestic manufacturer or importer.‖