Practice Tip: Congress Expected to Strengthen Consumer Product Safety

With more than $2 trillion of imported products entering the United States every year, consumer product safety is receiving more attention than ever from the government, consumer protection groups, safety advocates, and the media. In the past year alone, tires, dog food, and toothpaste from China have all been recalled. Most troubling were recent toy recalls, including one that involved millions of dangerous toys distributed by Mattel. The challenges of ensuring the safety of consumer products, regardless of whether they are produced domestically or abroad, include the ever-present demand for new products, faster inventory turnover, and greater consumer consumption.

The integrity and safety of products, especially imports, is under scrutiny, and consumers are questioning their confidence in goods. The current Congress will almost certainly approve legislation that will significantly impact the recall process and method for ensuring product safety. In an effort to prepare for this, President Bush established the Interagency Working Group on Import Safety (“IWGIS”) by Executive Order on July 18, 2007. The group is chaired by Health and Human Services Secretary Michael Leavitt, and includes officials from many other agencies such as the Department of Agriculture and the Consumer Product Safety Commission (“CPSC”). IWGIS is commissioned to review and assess current procedures directed at ensuring the safety of products exported to the United States; identify the methods by which U.S. importers may enhance the safety of imported products; and survey practices of federal, state, and local governmental agencies concerning import safety to highlight best practices and improve coordination among agencies.

IWGIS Recommendations

In September 2007, IWGIS submitted its initial report to President Bush, “Protecting American Consumers Every Step of the Way: A strategic framework for continual improvement in import safety.” The report outlines an approach that can build upon existing efforts to improve the safety of imported products while facilitating trade. On Nov. 6, 2007, IWGIS released an Action Plan for Import Safety that provides specific short- and long-term recommendations to better protect consumers and enhance the safety of the increasing volume of imports entering the United States. The Action Plan promotes a program of improvements in product safety that is largely government “hands off” and business driven. For example, to encourage good importer practices, IWGIS proposes creating a public list of certified foreign firms and businesses and giving products made by those firms expedited processing at U.S. ports of entry. IWGIS also suggests increasing civil penalties for non-compliance up to $10 million.

Congressional Efforts

The administrative initiative contemplates some legislative changes, but Congress is working to create a product safety bill to send to the President by the end of the year that is likely to be far more expansive, with more mandatory testing standards, particularly for products intended for children. Among the import safety-related measures moving through Congress are bills that would create a single agency to oversee food safety; increase the number of inspections and create a fee to defray food inspection costs; name an import “czar” to coordinate and oversee import safety; and to simplify the Food and Drug Administration's and CPSC's recall process.

In anticipation of future legislation, U.S. importers, distributors, and retailers should look to adopt proactive and pre-emptive approaches to manage the impact these potential legislative and regulatory changes could have on their business. Businesses will need to put in place systems to ensure compliance with heightened standards and expectations.

Conclusion

It is clear that the government is trying to take a more active role in regulating the quality and safety of products being sold to the U.S. consumer. Therefore, adequate quality controls will be a key step for manufacturers seeking to avoid liability for product-related lawsuits or government sanctions. Given the multilayered manufacturing system involving multiple levels of distribution, suppliers, distributors and retailers should also work together to ensure product safety at every phase from the factory to the store shelf and finally into the consumer's home. Finally, suppliers, manufacturers, distributors, and retailers must also work with the pertinent divisions of the appropriate government oversight agency to achieve the best practices and procedures that will provide the greatest product safety.

Ali. A. Beydoun is a business law attorney with Carr Maloney P.C., in Washington, DC.

With more than $2 trillion of imported products entering the United States every year, consumer product safety is receiving more attention than ever from the government, consumer protection groups, safety advocates, and the media. In the past year alone, tires, dog food, and toothpaste from China have all been recalled. Most troubling were recent toy recalls, including one that involved millions of dangerous toys distributed by Mattel. The challenges of ensuring the safety of consumer products, regardless of whether they are produced domestically or abroad, include the ever-present demand for new products, faster inventory turnover, and greater consumer consumption.

The integrity and safety of products, especially imports, is under scrutiny, and consumers are questioning their confidence in goods. The current Congress will almost certainly approve legislation that will significantly impact the recall process and method for ensuring product safety. In an effort to prepare for this, President Bush established the Interagency Working Group on Import Safety (“IWGIS”) by Executive Order on July 18, 2007. The group is chaired by Health and Human Services Secretary Michael Leavitt, and includes officials from many other agencies such as the Department of Agriculture and the Consumer Product Safety Commission (“CPSC”). IWGIS is commissioned to review and assess current procedures directed at ensuring the safety of products exported to the United States; identify the methods by which U.S. importers may enhance the safety of imported products; and survey practices of federal, state, and local governmental agencies concerning import safety to highlight best practices and improve coordination among agencies.

IWGIS Recommendations

In September 2007, IWGIS submitted its initial report to President Bush, “Protecting American Consumers Every Step of the Way: A strategic framework for continual improvement in import safety.” The report outlines an approach that can build upon existing efforts to improve the safety of imported products while facilitating trade. On Nov. 6, 2007, IWGIS released an Action Plan for Import Safety that provides specific short- and long-term recommendations to better protect consumers and enhance the safety of the increasing volume of imports entering the United States. The Action Plan promotes a program of improvements in product safety that is largely government “hands off” and business driven. For example, to encourage good importer practices, IWGIS proposes creating a public list of certified foreign firms and businesses and giving products made by those firms expedited processing at U.S. ports of entry. IWGIS also suggests increasing civil penalties for non-compliance up to $10 million.

Congressional Efforts

The administrative initiative contemplates some legislative changes, but Congress is working to create a product safety bill to send to the President by the end of the year that is likely to be far more expansive, with more mandatory testing standards, particularly for products intended for children. Among the import safety-related measures moving through Congress are bills that would create a single agency to oversee food safety; increase the number of inspections and create a fee to defray food inspection costs; name an import “czar” to coordinate and oversee import safety; and to simplify the Food and Drug Administration's and CPSC's recall process.

In anticipation of future legislation, U.S. importers, distributors, and retailers should look to adopt proactive and pre-emptive approaches to manage the impact these potential legislative and regulatory changes could have on their business. Businesses will need to put in place systems to ensure compliance with heightened standards and expectations.

Conclusion

It is clear that the government is trying to take a more active role in regulating the quality and safety of products being sold to the U.S. consumer. Therefore, adequate quality controls will be a key step for manufacturers seeking to avoid liability for product-related lawsuits or government sanctions. Given the multilayered manufacturing system involving multiple levels of distribution, suppliers, distributors and retailers should also work together to ensure product safety at every phase from the factory to the store shelf and finally into the consumer's home. Finally, suppliers, manufacturers, distributors, and retailers must also work with the pertinent divisions of the appropriate government oversight agency to achieve the best practices and procedures that will provide the greatest product safety.

Ali. A. Beydoun is a business law attorney with Carr Maloney P.C., in Washington, DC.